Will the new “big idea” go haywire?
Artificial intelligence is the new “big idea.”
Every generation has one — the transformational concept that promises to change everything. Ours is AI. The promise is intoxicating: automate thought, create at scale, eliminate inefficiency, augment and/or even replace humans, and unlock new levels of intelligence.
The scale of the rush is staggering. Trillions of dollars are flowing into AI — not only into software startups but also into chip manufacturers, hyperscale data centers, and the immense energy infrastructure needed to power them. Nvidia, whose processors drive most of the world’s AI models, now hovers near a $4 trillion valuation, briefly surpassing both Apple and Microsoft as the world’s most valuable company. OpenAI, valued around $500 billion, is the most valuable private company in history. The tech giants — Microsoft, Alphabet, Amazon, and Meta — are each pouring tens of billions annually into AI research, infrastructure, and integration. The stock market is riding this wave of enthusiasm; entire national economies are now tethered to expectations that AI will deliver exponential returns.
If you listen to the music, it’s all promise and acceleration.
But wait — stop the music. Haven’t we heard this before?
When the Big Idea Takes Hold
In this blog and in my book, AHEAD: Strategy Is the Way to a Better Future, I’ve previously written about the lure and the dangers of chasing a “big idea” when forming or pivoting a business. Before I say more on this critical topic, let’s review what I wrote…
Often an organization's strategic vision is based on "the big idea." The strategies being pursued by the organization sum up to a headlong rush to implement the idea.
Being single minded about a big idea has generated some of the most successful organizations in the land. Think of FedEx, Apple and Southwest Airlines, for example, as organizations whose founders had "the big idea" that brought them and continues to bring them great success. Next-day delivery, the best personal technology, and offering travelers low-cost flights are big ideas that wound up winners for the organizations that gave it their all to implement them.
However, just as easily the head-long rush to implement "the big idea" can lead to disaster. It's a question of being clear eyed about risks and rewards and of continuing to assess the marketplace as the plan is crafted and implemented. If the premise is wrong or the assumptions are wrong and are not continually tested, "the big idea" can wind up being the rocks upon which the organization crashes and sinks.
Here are two examples of “big idea” companies that subsequently hit the rocks:
Pets.com was founded on a big idea but soon sank. Launched in the 1999 dot.com stock market boom, it was one of four start-ups vying to lead in the online pet store space. The problem was that the big idea of selling pet food and supplies on a dedicated internet site was untested and proved at that time not to be a viable avenue for a successful business. The company stretched for recognition by creating a sock puppet that was featured in expensive Superbowl ads and adorned a balloon in the Macy’s Thanksgiving Day parade. Despite the hullaballoo, the company never came close to generating sufficient sales to become profitable. In its first short fiscal year, Pets.com had a paltry $619,000 in revenue but spent $11.8 million on advertising. Despite an Initial Public Offering that collected $82 million in 2000 and backing by Amazon, the company slid into oblivion in the dot.com bust as its share price slipped from $14 to 22 cents.
Adam Neumann founded WeWork as a commercial real-estate company that would provide shared workspaces for start-ups and build an office-space community. He needed big money to create high-end co-working spaces across the country and abroad. He secured a $4 billion-plus investment from the Japanese investment firm SoftBank and, later, personal funds and equity and debt financing from JPMorgan Chase. He brought WeWork to life using what he learned from earlier entrepreneurial ventures, combined with his background in marketing, a heavy dose of optimism and charisma, and evangelical promulgation of his vision. What led to WeWork’s 2023 bankruptcy (beyond Neumann’s lack of financial knowledge and savvy and his overconfidence in his own prowess) was a fundamental miscalculation of the demand for office space. As ABC News put it, “The company met its undoing, however, when a debt-fueled spending spree on leasing office space ran up against insufficient demand from businesses and freelancers.”
If you are going to bet it all, realize you are doing so and do so only with an understanding of what's at stake.
In the 1970s and 1980s I was a financial journalist reporting on the mortgage industry. It was at the core of the economy but not at the center of national attention. Lenders of various stripes but mostly commercial banks and savings institutions put out money for 30 years at a fixed interest rate, with the home as security, and borrowers paid the money back over that period. The concept was simple and it worked, putting the majority of Americans in their own homes.
Even then, however, Wall Street was starting to circle the mortgage industry, seeing the vast sums locked up in homes and mortgages and trying to figure out how to unlock these sums in ways where third-party investors could share in them and the Wall Street firms could benefit from them. Thus came the secondary mortgage market, teaser rates, adjustable-rate mortgages, financial futures, collateralized mortgage obligations, tranches of debt, and much more in the arcane lingo of Wall Street and modern mortgage finance. What once was a very simple business became complex, something that was not easily understood.
We now know that this effort to "securitize" mortgages went haywire, because the risks and rewards were not properly assessed. The machine that Wall Street built was based on false premises and ran out of control, to the great detriment of our economy and to the end of many organizations, some the former pillars of our economy.
It's good to not only keep the Apples and FedEx's in mind when crafting a strategic vision and strategies to get there. Think of Lehman Brothers, Merrill Lynch and Washington Mutual, as well. When you are planning and building the new machine, be sure you understand how it will operate and the risks and rewards of operating it. If you get it right, success can abound. But if you get it wrong, woe be to you!
Nobody listens to me! Not that I expect them to. But the point I am stressing is critical. A great idea for a business, no matter how transformational, can founder if the business model, the brand value proposition, the resources, the execution plan and a lot more are not aligned — and if the apparent risks are not considered and mitigated or avoided.
The Beat Goes On — And the Lessons Go Unlearned
You would think those lessons would stick. But they don’t. The beat goes on — new technologies, new markets, new fortunes, same story.
Theranos is a case study in the power and peril of belief. Elizabeth Holmes’ vision of reinventing medicine through painless, instant blood testing captured imaginations and investment dollars alike. Her board included titans of politics and industry; her brand gleamed with moral purpose. Yet the technology never matched the rhetoric. Strategy gave way to storytelling, and when truth caught up, the fall was brutal. The “big idea” wasn’t wrong — accurate, decentralized diagnostics is still the future — but the discipline, transparency, and realism to get there were missing.
Then there was Quibi, Hollywood’s $1.75 billion experiment in premium short-form video. It had two pedigreed leaders — Jeffrey Katzenberg and Meg Whitman — and a clear rallying cry: “We’ll reinvent how people watch.” They mistook money for validation and momentum for inevitability. They didn’t ask whether audiences wanted another streaming platform, or if their viewing habits fit the format. They simply believed the big idea would bend reality to their will.
The pattern is ancient: from tulip mania to the dot-com boom to today’s AI gold rush, the human appetite for the big idea is boundless.
The New Big Idea: AI
And now, here we are — the next great promise, the next wave of brilliance and risk.
AI is a genuine revolution, but it is also the ultimate proving ground for strategy. A recent MIT study found that 95 percent of generative-AI projects fail to produce meaningful gains. Early ventures such as Humane’s AI Pin and Builder.ai have already stumbled, undone by hype, technical fragility, and unrealistic expectations.
Meanwhile, the money keeps flowing. Chipmakers, cloud giants, and venture funds are locked in an arms race. Data centers are consuming energy at unprecedented rates, forcing expansions of power grids and water-cooling capacity. AI’s appetite for computing power is reshaping entire industries — and distorting investment priorities across the global economy.
The startup wave alone is staggering. By mid-2025, more than 70,000 AI companies had been registered worldwide — roughly 17,500 in the United States — with over $100 billion in startup funding raised in 2024 alone. Every week brings a new promise: an AI-driven recruiter, therapist, writer, coder, driver, or decision-maker. Many of these are earnest experiments; others are simply rebranded old ideas with a chatbot on top. The line between innovation and imitation is growing harder to see.
Yes, this may become the foundation of a new industrial age. But revolutions fueled by belief have a way of outrunning themselves. For every world-changing breakthrough, there are a thousand ventures racing ahead of reality — and a handful of strategists trying to keep them grounded.
The Strategist’s Role
The “big idea” isn’t the problem. The problem is the rush — the untested premise, the unchecked assumption, the seductive belief that vision alone guarantees victory.
That’s where strategists come in. Our job isn’t to dampen enthusiasm; it’s to give it structure. To test, to model, to challenge. To help visionaries build machines that can actually work — and survive.
The big idea of AI is thrilling. But before we call it destiny, we’d be wise to remember what every strategist knows: clarity beats hype, and disciplined execution beats dreams untested.
Stop the music, if only for a beat. We’ve danced to this tune before.
Footnotes
“Nvidia briefly overtakes Apple as world’s second-most valuable company,” Reuters, June 18 2025.
“OpenAI is the world’s most valuable private company after private stock sale,” TechCrunch, Oct 2 2025.
“Microsoft, Google, Meta and the AI spending boom,” Wall Street Journal, May 2025.
“How the AI boom is driving global markets,” New York Times, July 10 2025.
Benjamin Laker, “Elizabeth Holmes’ Fall from Grace: A Case Study in Leadership, Strategy and Corporate Accountability,” Forbes, June 18 2023.
“Quibi Case Study,” Harvard Business School Faculty Research, 2021.
“MIT study shatters AI hype: 95 % of generative-AI projects are failing,” Economic Times, Apr 2025.
“Humane Inc.,” Wikipedia, 2025.
“AI’s energy appetite strains data centers,” Reuters, Aug 12 2025.
“AI Startup Stats 2025,” HubSpot AI Startups Report and Ascendix Tech, July 2025.
Pets.com, Wikipedia.
Hersh Shefrin, “The Rise and Fall of WeWork,” Santa Clara University Illuminate, 2023.
