Is AI Enough for Success in Business?

Unpopular Opinion: AI Isn’t the Star of the Show

With all the glitz and glam that AI has been having in headlines these days, it’s easy to get wowed by the things AI is allowing the world to do. And, as a venture capitalist firm who focuses on companies leveraging AI and data in strategic ways, we’re definitely big fans of AI and what it can do. Don’t get us wrong here. However, we’re noticing a big problem with many companies right now and it comes down to how they are positioning AI in their product. Many companies are using AI as a crutch and it may sound cool, but AI will never succeed if it’s being used just for the sake of AI. 

Instead, companies need to focus on something that has driven success for centuries upon centuries and well before the words “artificial intelligence” were ever uttered: solve a core problem. When you get back to the core focus of solving problems, you find success. 

Get back to this core focus, pair it with AI, and then you have a winner. Do it in reverse, and you’ll be another flash-in-the-pan tech startup that no one can recall a year later. 

So, what is involved with creating a good product? 

  1. Identify a problem: The most successful companies we see in the tech space, and what we look for in companies in our Sentiero portfolio, are focused on solving an initial problem. They have identified a real need the public is facing and are focused on solving that problem. 
  2. Find a better solution. The reality of the first part is that these problems are often solvable in multiple ways. The elegance of the solution, though, is that AI can be leveraged to get an even better solution than without it. You can get to a 10X better solution faster, and more efficiently. 
  3. Validate the solution. Go test it! See if it works for your user. Keep in mind that the market has had some bad experiences with AI in the early years, so be smart about how you get it validated. 
  4. Iterate. Don’t stop, but instead build upon your initial idea until it works well and meets the objectives. Don’t stop until you’ve solved the problem. 

If you don’t solve a core problem and do it in a meaningful way, users will come for the novelty, but they will leave for the lack of results. Give them results and solve their problems, and people will become long-term loyal. Each time this happens with an AI-based tech startup, you instill just another building block of trust with users in the power of AI. 

As you flesh out your technology, AI should never just be an afterthought, or a bolt-on. Artful AI is an integral part of the solution you’re solving for. It feels natural and it feels meaningful both to the company and to the end user. It’s not just some shiny object you use to entice someone to your solution over another, but instead is a value-add allowing for a 10x better solution to a problem. 

AI might be getting the spotlight and be the trendy keyword today, but if it’s not part of the core solution to a problem, it’s just fluff. We’ve seen AI do some amazing things, providing real results for end users while giving companies a major leg up in their industry. We’re excited to see how it continues to be used in our current portfolio and dream with tech leaders about how they can use it even more in the future!