While I would agree that there are a lot of routine, repeatable steps in investment banking, I would want to know more about ML’s applications in an M&A setting. In contrast to equity trading and other capital markets transactions, I would argue that M&A is too bespoke to effectively teach a machine. Every M&A situation is very unique to the company, and I’m not sure that there are a definable mix of variables that one can insert to get an answer as to how one should act in a deal situation. There are so many stakeholders involved with a transaction that it may be impossible to have a tool that optimizes outcomes for all involved. And per your earlier point, I don’t believe companies will be willing to open up that information to being shareable with respect to any ML tool so that it can ‘learn’. In summary, by my read ML will be most useful in investment banking contexts when it is deployed to make a routine workstream more efficient, but its ability to be a strategic advisor in sophisticated corporate transactions remains up for debate.
Sam – Thanks for sharing these insights. I feel like an analogy can be drawn between the music industry pre-streaming and the education publishing industry. It is owned by a few large incumbents with massive market share due to the structure of the market. The incumbents are well-entrenched, have massive marketing budgets, and its questionable the degree to which they are interested in serving customers vs. the bottom line. Although music streaming is not “open innovation”, it is largely democratic and gives consumers choice, while still remaining a profitable enterprise. The more we can build technologies that disintermediate the slow-moving incumbents in this industry, the better! This move may be slow, and it will require the support of teachers, parents, and politicians.
Thanks for these insights, beaverpaw2020! I think the open innovation model is very congruent with LEGO’s key tenant of creativity. I can recall being in elementary school receiving a box of LEGO’s not too dissimilar with the one linked below: simply a box of bricks with which to let your imagination run free. Some of my best LEGO memories are making houses, cars, and trains completely without a script. Not dissimilar for what was described above, it would be cool if there was a centralized forum, similar to a subreddit, where you could post your innovations, and LEGO would publish the guides or put together sets. I think this would be good in engaging adolescents. I think this public approach would also serve as a great marketing tool for LEGO.
Thanks for your thoughts, “NotMark”! I am fascinated by the implications of AM going forward, but in the case of Lockheed Martin, it also made me ponder some of the security concerns that AM may bring to the forefront. For instance, can AM systems be hacked in ways that traditional manufacturing processes cannot? With an automatic “set-up” time, which can be designed remotely, can bad actors access an AM blueprint and cause damage to something as sensitive as Lockheed’s defense system designs? While I’m confident that Lockheed invests in best-in-class secure systems, one not need look to far for examples of how even the most secure organizations and agencies can be breached by hackers. Some of these concerns are raised in an interesting piece from RAND corporation that I reference below.
“Four Ways 3D Printing May Threaten Security”, RAND Corporation, May 8, 2018, https://www.rand.org/blog/articles/2018/05/four-ways-3d-printing-may-threaten-security.html, accessed November 2018.
Great insights, Petra! I wrote my blog about Allstate’s use of ML for lines of personal insurance, and raised many of the same questions you have. I think while Lemonade certainly appears disruptive in the near term, I question its long term competitive advantage as large incumbents such as Progressive and Allstate embrace ML technologies with much larger data sets and overall scale. I also didn’t know that more than half of Lemonade’s claims are still being handled by humans, which makes me question how advanced Lemonade’s business model truly is. While the speed and social good elements of Lemonade are differentiated, I will be interested to see how Lemonade competes in the future. Perhaps Lemonade would function best a broker that helps connect large, regulated insurance companies with millennials that like the tech-enabled approach of Lemonade, an idea raised by analysts.
 William Wilt et al., “Peer-to-Peer Insurance: Proprietary Review of Global Landscape post launch of Lemonade”, Gordon Haskett Research Advisors, December 7, 2016, https://amr.thomsonone.com/, accessed November 2018.
Thanks for your insights! I always think it’s great when blue chip companies, such as Boeing, start embracing these technologies, as that would signal to me that the technology is gaining mainstream acceptance. Reading more about Boeing, it appears that the R&D for additive manufacturing and other novel technologies are carried out through its venture arm, HorizonX.  From an organizational perspective, it makes a lot of sense to me that these teams are built out separate from the large commercial parts of the business, which are focused on, quite literally, delivering the “nuts & bolts”. Thinking back to the market perception map from the Product Development Fundamentals note, it makes a lot of sense that there would be a small dedicated group working on these breakthrough technologies. I’d be interested to know at what point an initiative like additive manufacturing moves past the “tiger team” or “skunkworks” approach and becomes a technology integrated into the larger business.
 Rajiv Lalwani, et al. “What Did Dennis Say at Laguna?”, Morgan Stanley, September 13, 2018, https://amr.thomsonone.com/, accessed November 2018.