Who owns the brains?
Around the time of the Agricultural Revolution, wealth was based on ownership of land and natural resources.
After the Industrial Revolution, you could become wealthy by owning factories, capital, and other means of production.
Now, as our means of production become more mental than physical, wealth will be created by ownership of “brains.”
Physical work vs mental work
We can manipulate the physical world with our minds.
Look around you … anything man-made started as a thought.
A paper airplane, for example.
First, you imagine a paper airplane in your mind.
Then you take action in the physical world to create it: find a piece of paper and make the folds.
Mental work alone isn’t enough.
The physical work will still need to be done.
We’re physical creatures living in a physical world. We need food, water, and shelter. We need to build houses and farm the land.
But do we need to do the physical work with our bodies?
Hardware does the physical work, software does the mental work
Almost everything we do with our bodies can be done by a machine.
But how will the machines operate?
A tractor with a steering wheel needs a human to turn the steering wheel, right?
Not anymore.
John Deere is working on an autonomous tractor.
Almost everything a human body can do, a machine can do.
Almost everything a human brain can do, a computer can do.
Robot taxis. Robot chefs. Robot retail.
As increasingly intelligent computers are being put into increasingly dexterous machines, work previously done by humans will be automated.
Who owns the brains?
It’s no longer just about who owns the machines.
Now it’s about who owns the brains that operate the machines autonomously.
A tractor, for example.
There are more than a hundred companies that manufacture tractors.
But how many companies own the software that tells the tractor how to operate without a human in the driver’s seat?
A computer is a machine that can store, retrieve, and process data. It can be programmed to automatically perform a set of operations.
Many of the machines we use in modern life have computers built into them: smartphones, home appliances, vehicles, electronic toys, etc.
There are computers in everything now. If you can write the software for the computer that operates a machine, you can create a “brain” for the machine.
The value of a brain
For any company that uses machines to perform its operations, software is valuable (i.e., worth paying for) for at least two reasons:
Lower labor costs: software can automate the mental operations of wage-earning human brains
Better operation: software might be smarter, more efficient, safer, can work 24/7
This value can be realized by every company that uses machines (which is almost every company, including tech companies … computers are machines too).
B2C software
The value of software can also be realized by individuals.
The obvious use case is using software to automate your household chores, e.g., robot vacuum.
But what if you could also use software to automate your job?
This mostly applies to “knowledge workers,” especially if you work remotely.
I know salespeople who use ChatGPT to write their emails.
Consultants can use AI to create pitch decks.
Who will adopt software/AI faster: businesses or individuals?
Businesses, especially big ones, have to move slowly and be careful when implementing any kind of automation.
Individuals are more nimble.
Many of the top, cutting-edge SaaS and AI products are available to the public and relatively affordable.
This is a tailwind for the gig economy, freelancers, coaches, course creators, solopreneurs, digital nomads, fractional work, micro-entrepreneurship, micro-SaaS, etc.
There may be headcount attrition at larger corporations (especially in tech) if individuals realize they can make more money as entrepreneurs by adopting these SaaS/AI products as engines for small, sustainable businesses.
Human brains vs software brains
Human brains are still superior to AI/software brains for many tasks.
You can’t “own” a human brain (other than yours), but you can employ a human brain.
There are over 100 million knowledge workers in the U.S. and over 1 billion globally.
There’s a reason tech companies pay high salaries to so many software engineers.
But as AI/software advances, more tasks that were previously done by human brains will be automated by AI/software, including software engineering.
Here’s where it gets really trippy: AI/software brains improving themselves and creating other AI/software brains.
Dynamic thinking vs static knowledge
Static knowledge doesn’t change or get better.
It’s a formula, a process, lines of code. But it’s set in stone, not getting better over time.
Dynamic thinking is more valuable than static knowledge.
Dynamic thinking improves over time. It learns data, stores it, forms hypotheses, runs tests, learns more data, stores more data, and theoretically should get smarter over time.
Static knowledge still requires dynamic thinking (usually done by human brains) to connect the dots, move the ball forward, react to unexpected changes.
But dynamic thinking can do it all. You could give a dynamic thinking brain a very simple command (”generate $1000 of online income”) and it will learn everything to get it done.
How to navigate the “knowledge age”
Before, you wanted to own the land and resources. You fought for it. Traveled to find it. Settled it.
Then you wanted to own industrial equipment. Be able to produce.
Now you want to be smart. Be able to write software. Be able to build brains that get work done automatically by telling machines what to do.