3 Ways Startups Can Use AI to Differentiate and Win
As the public discourse on AI continues to shift from inflated hype to skepticism about practical application and impact, countless new startups are being created to explore new ways of using AI. Light bulbs are going off as entrepreneurs realize opportunities that didn’t previously exist and discover different ways to deploy AI to add value to their industries and communities.
However, AI is still very much a moving target. There are many factors — some in leaders’ control and some not — that will influence the direction of the technology over the course of this year and beyond. It can be difficult for first-time and even experienced founders to know where to place their bets.
I recently served as a judge for Twilio’s AI Startup Searchlight awards, where I was introduced to a large group of startups that are using AI to tackle pressing problems in their industries in completely new ways. Based on the work they’re doing and how I’m seeing the startup landscape evolve, there are three things I think every startup capitalizing on AI should consider to stand out and succeed.
1. Don’t make AI your entire business. Instead, use it to reinforce your strategy.
Over the past several years, it’s been easy to buy into the excitement around the possibilities of AI and want to go all in on investing in the technology. But given its uncertain future, I believe a successful startup should be able to exist without AI. It should serve a purpose or solve a pervasive problem that already exists in its industry, using AI to do so. Founders should ask themselves three things: what’s the need, what’s the business model required to fill the need, and how can AI enable that business model. I like to call this “building a moat” around your business plan.
One of the startups recognized as an honoree by the AI Startup Searchlight that clearly demonstrates the value of building a moat is Next Order. Next Order is a cloud-based point-of-sale system for restaurant owners that uses AI to automate a seamless online ordering experience for customers. There is a clear corner of the market Next Order is supporting and the need they’re filling exists independently of AI. I believe they’re well-positioned for long-term success because their business strategy doesn’t hinge on AI, but is insulated by it.
2. If you want to make the most of AI, investing in high-quality data is non-negotiable.
In the mad dash to adopt AI, many people overlooked the fact that AI effectiveness depends on the quality of the data it’s trained on. The founders that recognize this fact early on and invest in building a comprehensive, accurate, high-quality data foundation will be those that are set up for longevity.
Ensuring data quality is especially important when you consider that we have yet to crack significant AI issues like hallucinations and privacy implications. There is still so much room to improve AI’s accuracy, efficacy and functionality, all of which will require the right data. AI is an open science in this way — innovators that use data to create and capture value will reap the rewards.
3. Expect and prepare for the inevitable: change.
When Twilio asked nominated founders what their expectations were for the future of AI, nearly every one acknowledged that we’re in the very early stages of AI. The technology and the industry will continue to dramatically change.
Smart founders aren’t betting everything on the latest version of ChatGPT, only for the entire system to change the next day. They’re building an anticipatory foundation and baking foresight into their business plans from the very beginning. The ability to incorporate and absorb change will be invaluable for startups in the AI ecosystem.
Arist, an employee learning and communication tool, was one of the startups that stood out most to me among the AI Startup Searchlight honorees. With the help of AI and Twilio, they’re making workforce education accessible by meeting employees on whichever channel they prefer, from Slack to SMS messaging. The use cases for Arist’s solution are truly endless, keeping their business both scalable and adaptable. And by effectively capturing knowledge and value that’s already been created, I believe they’re hitting a sweet spot that is only going to grow.
Pioneering the next great frontier of technology
I am so impressed by the work startups are doing to push the boundary of what’s possible with AI, and across such a diverse array of industries. It’s a testament to the fact that we can’t even fully grasp the innovations that will be built and the industries that will be created with the help of AI. We’re just getting started, and startups like the AI Startup Searchlight honorees are paving the way.
While much of the public AI conversation is dominated by technology giants and industry incumbents, startups are quietly giving bigger organizations a run for their money. They have the unique ability to fill niches and voids that are challenging for large incumbents to fill. I’m hopeful that equipping startup founders with what they need to be successful will ultimately level the AI playing field.
Source: Venturebeat.com
