Proprietary Technology, when effectively utilized, can significantly bolster competitive differentiation. For example:

• Steve Jobs’ Pixar serves as a classic example, revolutionizing the animation industry by producing movies at a fraction of conventional costs.
• OpenAI’s GPT technology is game-changing for content creation.

In contrast: Many tend to invest capital in technology that doesn’t generate meaningful competitive differentiation. For example, are you investing in custom-building and maintaining a page-based content management systems (CMS)?

• Such investments tend to become cost-centers because they operate on the same indifference curve as WordPress.
• Eventually, investment drops and the it reflects in the quality of the product or they are completely abandoned.

For example:

• Vox Media invested millions in building a custom-built CMS and eventually migrated to WordPress.
• Here’s a great post by Frederic Filloux on Medium detailing how the vast majority of news companies have horrible products.

What’s worse:

• Companies that are not technology-first, for example media, struggle to build technology.
• With the advent of AI, companies will be forced to decide between becoming compute-heavy or remaining compute-light.