Are you willing to risk it all and become the next AI Unicorn founder?
Before you jump headfirst into AI, consider this: the tech industry is littered with misguided bets.
The hype surrounding new technologies often overshadows the reality of their potential and risks. I’ve been through every wave since the dot-com bubble, both as a participant and a spectator. But what I’ve seen time and again is investors blindly following each other like lemmings, only to fall off the cliff together.
Remember that success in the tech industry isn’t just about the latest technology; it’s about the market and the execution. Technology is just the medium, not the end goal. Simply jumping into the latest buzz-worthy tech won’t bring any inherent value without a solid understanding of the market demand and a well-executed strategy.
The downfall of Credit Suisse has once again shown that no stock market heavyweights are safe anymore. Since the rise of tech companies to the top of the list, many others have disappeared from the scene or at least from the stock market indices such as the Dow Jones. Recently Salesforce, Amgen, and Honeywell were added to the Dow, replacing Exxon-Mobil, Pfizer, and Raytheon Technologies.
On August 9, 2011, Apple surpassed ExxonMobil to become the most valuable publicly traded company globally, marking a significant achievement for the Cupertino-based tech giant. This milestone is a testament to Apple’s remarkable comeback since it appeared to be on the brink of collapse 15 years earlier and marked the peak of the tech era as we know it.
“It is difficult to think of a major industry that AI will not transform. This includes healthcare, education, transportation, retail, communications, and agriculture. There are surprisingly clear paths for AI to make a big difference in all of these industries.”
— Dr. Andrew Ng, Computer Scientist and AI Expert
The advantage of tech companies is obvious: scalability and, thus, unprecedented margins. Now, in 2023, we are at the dawn of a new era against which the scalability of tech companies will look like peanuts — once AI inference becomes cheaper. AI will change many things, including the Dow Jones, and the core business of companies like Google will be severely threatened if they cannot quickly respond to new players like OpenAI or Stability.ai.
We are witnessing a surge in investment by venture capitalists in AI startups. While the recent advancements in AI technology have undoubtedly contributed to this trend, I am concerned about the consequences. The market now sees an inflow of generic “AI startups” lacking an actual value proposition, potentially damaging the AI industry, reputation, and capital flow.
Many of these startups are actually nothing more than prompt machines that solve this little, still missing part from generative AI tools like ChatGPT. In other words, little more than an interface that depends entirely on the API of an ever-improving platform.
The risk of failure of AI startups relying on GPT’s API increases with every update. However, this should not discourage entrepreneurs from pursuing AI-based startups. The key is to use advanced technology to fulfill customers’ needs uniquely and innovatively. Like every company, AI startups can get relevant and valuable by focusing on providing a solution that meets a specific customer need.
“AI will probably most likely lead to the end of the world, but in the meantime, there’ll be great companies.”
— Sam Altman, Chairman of OpenAI
Nevertheless, after the first wave, VCs will focus on companies with a clear vision and purpose and can genuinely contribute to advancing AI technology for the betterment of society.
So don’t follow trends but instead focus on creating unique solutions for underserved markets independently of the big players. Startups can differentiate themselves from the competition, e.g., by working on niche markets that large generative AI models may not cover.
Focusing on the customer and offering a genuine value proposition for your startup is crucial — this is independent of sector or technology but applies even more strongly to AI startups, as these simplify many things for us and therefore need to be particularly tailored to customers’ needs.
Crafting a clear and compelling value proposition is key to winning over customers in a competitive market. A value proposition is the unique promise of value that your product or service delivers to your target customers. It communicates the benefits of your product, how it solves customers’ problems, and what sets it apart from competitors. And most importantly, it will tell you what kind of product you should build and how to use AI or other technologies. Read this article to learn how to create a compelling value proposition.
If you’re building a company powered by artificial intelligence (AI), you must recognize that the data and AI engine is your business’s backbone. In other words, your company’s brain, USP, and intellectual property are all tied to the quality and accuracy of your AI. Therefore, having solid AI expertise on your team is crucial to ensure your platform is built to its full potential.
While incorporating a generative AI tool like ChatGPT may add excitement and novelty to your business, it shouldn’t be the core of your proposition. Instead, the heart of your company should be built uniquely to fit your vision and goals. Working with the right AI experts ensures your company is built on a strong and sustainable foundation to drive long-term success.
It is vital to anticipate AI technology’s changes in the coming years. The emergence of generative AI tools is set to transform the future of technology. Recent demonstrations have showcased its ability to code web apps, assist in drug discovery, fix smart contracts, and more.
As a result, it’s essential to remain vigilant of the technological advancements that lie ahead and ensure that your team is equipped with the right experts who possess a solid foundational understanding of these tools and can pivot as needed. And it’s equally important to understand when not to use AI. By staying informed and adaptable, companies can leverage the power of AI to their advantage and remain at the forefront of technological progress.
Take some time to consider the impact of generative AI tools on your business or idea and create different scenarios based on the past innovation boosts we experienced. If you don’t, you risk being eaten by one of the big ones. And this can already happen with the next release.