🔥 Superstars and the AI Divide — As AI amplifies talent, top performers are pulling even further ahead. The “Hollywood Effect” is spreading and one person billion-dollar companies may soon be reality.

🧠 Prompt of the Week: The Second Brain Audit — Use AI to organize and optimize your digital mind. A structured prompt to make your notes, docs, and ideas work together like a real cognitive system.

🎯 AI ROI Is Real — New research shows generative AI adds measurable value per customer and boosts conversion, proving it’s more than just a productivity toy.

There was a great article in the Wall Street Journal titled Why AI Will Widen the Gap Between Superstars and Everybody Else. It's not surprising, and AI just amplifies what is going on in the rest of society.

There is the Hollywood Effect, where a small subset of actors make the multi-million dollar paydays, while most actors earn under $70,000 annually. You see a similar dynamic at a lesser scale with top salespeople as well. This type of distribution is coming to an industry to you sooner than expected.

Clearly it's no different in some ways that other technology. The skillsets that differentiate high performers (proactiveness, curiosity, iteration, etc) are supercharged when discovering and utilizing AI capabilities.

The authors recommendations on how to remediate this gap are helpful to a certain extent. In particular, ensuring everyone in an organization has access to the same AI tools does level the playing field. You can't expect an employee that doesn't have AI to outperform one that does.

But I think people are in for a rude awakening. You're already seeing billion dollar companies that only have a few dozen employees. It is my belief in the next few years that we will see a billion dollar company with a solo employee. It is the natural trajectory of the AI capabilities that are evolving. This will cause continued disruption in the labor market, as companies will not need to add as many people. I would argue you're already seeing the start of these effects.

In the future you'll have small organizational structures that fully utilize AI capabilities and only add people when absolutely necessary. There will also be higher expectations on productivity and outputs because most things will be AI augmented. It will also create more opportunity for enterprising individuals to start their own companies and scale faster, due to AI continuing to innovate at a rapid pace.

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AI Workslop Takes Over — From fake news sites to corporate reports, low-quality AI-generated content is flooding the web. CNN calls it “AI workslop”, an avalanche of mediocre, machine-made material that’s cheap to make but costly to clean up. The next big opportunity? Tools that filter the signal from the slop. Read more →

Claude Learns New Skills — Anthropic unveiled Skills, a way to teach its AI assistant Claude custom behaviors, workflows, and company knowledge, no coding required. It’s like giving your AI a memory and a job description. The race to personalize LLMs just went enterprise. Read more →

Any LLM can help you become more productive, but you can really supercharge this effort with the right prompt. The more context the LLM has, the better guidance it can give you. If you think about it, with all the notes, documents, emails, etc that you have, you've created a digital second brain. The problem is that it probably isn't organized as well as you would like it to be. You can use this prompt below to help you consolidate all this information and think more clearly:

You are my systems-thinking coach. Audit my digital second brain and identify how I can better use AI to organize, recall, and apply what I already know.

Ask me 5 questions to understand my current setup (tools, habits, workflows).

Then:

There is still this unhelpful myth that generative AI really only boosts productivity but doesn't do much when it comes to return on investment or improved revenue. In a paper titled Generative AI and Firm Productivity: Field Experiments In Online Retail, the authors ran seven different experiments on an e-commerce platform to test this out.

What they found was that using generative AI, they found that the company was able to add $5 in incremental value per customer. Equally interesting is that the value isn't evenly distributed. First, there were some generative AI deployments where they saw no positive effects. Second, the gain from gen AI depended on the maturity of the existing process. So if a process was very mature and standardized, gen AI had a smaller impact overall.

In this case, focusing on reducing consumer friction and improving user experience boosted conversion rates, which then increased revenues. These lessons could be applied to other industries when it comes to the customer experience, and also in how gen AI is applied.

AI predictions alternate continually between utopia and dystopia, sometimes daily. The chart below reflects the current angst of the Federal Reserve Bank of Dallas:

It is also fundamentally unhelpful for most reasons. No one can predict the future. Coming up with crazy divergent predictions also doesn't help, and crowds out all the helpful things that AI can do. Both singularity scenarios (benign and extinction) basically just show a near infinite increase or decrease in GDP. Once again, meaningless. If you strip out both of those scenarios, you see the remaining three trend lines which are so close it once again isn't showing much.

The big takeaway in all of this is the boost that AI will grow GDP at. I try to reiterate as much as possible that AI is a fundamentally deflationary force. This means that it will become a lot more efficient and less costly, which will reduce the input costs of a business. If that compounds over time, those additional resources can then be put to more productive uses. It is a virtuous cycle over time which increases both nominal and real GDP.

This eventually will create a world of near infinite abundance. And it is this effect of AI that is so difficult to wrap your head around. We're conditioned with thinking about finite resources, but the truth is that these finite resources are a lot more abundant than our minds could ever imagine. Take oil for instance. For the past few decades, there was talk of peak oil and how the world would run out of it. What actually happened though was as the oil price increased, it made more expensive oil extraction technologies feasible. If a certain extraction technique costs $50 but the price of oil is $45, it doesn't make sense. Yet if oil is $120, suddenly the economics work.

This is exactly what will occur with AI, and in any industry that continues to utilize AI capabilities. There will be that continued deflation, leading to more abundance and also fundamentally changing how we organize our society. To some people, this will be utopia, and to others, dystopia. The fundamental skill will be adapting to this continual change and finding ways to apply this new found abundance.

-Ylan