CHAT GPT Will Disrupt McKinsey Before it Disrupts Google

One of the skills I had to master in high school was sounding intelligent about things I knew nothing about in order to get an A.

We can generously call this skill manufactured intelligence. Others might call it the ability to bull$hit. 

In college I got As on term papers about things I did not understand like the origins of conflict between India and Pakistan, for example.

After college, term papers morphed into proposals. I wrote proposals for an international NGO called Mercy Corps. These proposals convinced wealthy philanthropists to donate money to eradicate extreme poverty in poor countries like Sudan and Somalia. A subject I only knew about from writing bull$hit term papers in college. I wrote these proposals from a stunning sandstone office in the wealthiest neighborhood in Edinburgh, Scotland. I was not actually in Mogadishu, in case you were wondering. 

After writing proposals to separate rich philanthropists from their money I wrote reports to convince investors to bet on stocks (specifically banking stocks). These reports were somewhat different because if I was wrong I might get fired. As we’re seeing right now with Tesla, the market eventually holds people accountable for their bull$hit.

While I worked in finance I shifted from analyst to strategist. This shift meant that instead of bull$hitting with research reports I bull$hat with powerpoint decks. I teamed up with venerable bull$hit factories like McKinsey & Company, Boston Consulting Group (BCG), and Bain & Company, and churned out magnificent colorful, data-informed 200-slide tomes of bull$hit that illustrated how the world was changing and how we should build new innovations to stay ahead of modernity. Because, if we didn’t we’d be disrupted like Blockbuster or Kodak.

The final stop on the bull$hit train for me was software. After I left finance I transitioned from bull$hitting via PowerPoint deck to bull$hitting through software prototypes. I built new products and helped reinvent old ones with apps and screens which seemed like we had solved a deeply entrenched, complex, and expensive problem for a company. But in reality, the screens were just digital forgeries of what actual working technology might look like. The technology often didn’t work, and was never scalable. But it’s not like some CEO who was the same age as Mitch McConnell knew the difference. They couldn't even use their email.

In fairness, I did do some things that solved real problems for real people and made some money. This includes, but is not limited to:

1. Securing $3.8 mn to partially restore the sanitation system in Western Indonesia after the 2004 Tsunami. 

2. Being the first to publicly predict the collapse of the subprime mortgage market and the collapse of Bear Stearns, Countrywide Financial and Lehman Brothers. 

3. 14 of the 33 different products I’ve launched are still alive and growing.

4. I wrote a book called This Might Get Me Fired which became a best-seller

5. I built a community of Rebel C-Suite executives called Punks & Pinstripes, and we help each other stay real in a world of bull$hit. 

6. I have a beautiful wife and two kids, and we are very happy together and not dysfunctional. 

Here’s why my life in bull$hit is connected to the disruptive impact of CHAT GPT

CHAT GPT will displace many of the knowledge foundations of the bull$hit economy. It can already write term papers better than most college students. I believe it will reconfigure industries like management consulting which sell grown-up variations of term papers for tens of millions of dollars. 

Here’s why:

Grown up term papers are written by people who, as students, got As writing about subjects they did not fully understand. As adults they sell expertise without experience; advice without accountability.

The grown-up term paper industry generated about $554 billion in revenue in 2021. It includes management consulting ($54 billion in 2021), law firms (approximately $300 billion in 2021), and the M&A advisory desks of investment banks (somewhere between $100bn - $400bn in 2021). Not every dollar, or every company, or every engagement in these industries was opportunistic, or malignant, or bull$hit. Of course not. But a first step in every engagement in these industries is amassing data and knowledge to make sense of a complex and messy problem, like what a company is worth, or whether to expand into a new country, or whether someone stole your intellectual property.

Grown up term papers often offer advice that is often  impractical, costly, or destabilizing once implemented in the real world. For example:

• 50-70% of M&A fails. I have lived through 7 acquisitions and can attest that one of the fatal blind spots of investment bankers is something called ‘humans,’ who are irrational, emotional, and messy externalities that are often omitted from the model, but will sabotage economic ‘progress’ in the name of self preservation and self promotion.

• The PowerPoint tomes of McKinsey, BCG, and Bain for the most part consist of clever advice backed by data, that is not practical or implementable, and was written by a 28 year-old Harvard MBA. At its worst it has contributed to the US Opioid crisis, and human rights abuses in South Africa, Saudi Arabia, and China. 

There is a critical mass of disenchanted alumni and customers from the term paper industries. They know that there’s a more actionable, more accurate, cheaper, faster and sometimes more ethical way to get good answers to hard problems.

Management consulting quit rates reached an all time high during the Great Recession in the US, according to BLS.

ChatGPT will emerge as a viable first draft for people who need better answers than what the Term Paper Industry historically offers. I believe that when they seek an outside perspective for a complex problem they will build a baseline hypothesis of the current state using Chat GPT, and will then pressure test the results by seeking out the actual ‘experts’ whose insights stem from years of hard-earned trial and error. This will lead to defections from the term paper companies. These defections will first be small, but will then become large and irreversible, and eventually lead to large scale fragmentation in management consulting, and investment banking. 

It won’t look like Netflix v. Blockbuster. Or the implosion of Lehman Brothers. It will look more like the emergence of the internet and Facebook and the slow multi-decade dislocation of print media like the Chicago Tribune that continues to this day.

As always, I’m deeply flawed, error prone, and welcome any feedback that might discredit my bull$hit.