AI is no longer the stuff of science fiction. In recent years, we’ve seen everything from AI-generated art that ranges from mesmerising to downright bizarre, to AI attempting stand-up comedy (with, let’s be honest, mixed results), to AI composing music so beautiful it leaves you wondering if robots have feelings. These applications are everywhere, and it’s easy to feel like if you’re not riding the AI wave, your startup is missing out. But is that true? Is it possible to succeed in 2024 if you’re not an AI-based startup? Let’s break it down.
First, ask yourself: do I really need to use AI for the problem I’m solving? If the answer is yes, then go ahead and build your AI. If you’re sitting on a game-changing AI idea and have the resources to pull it off, consider this your green light! But what if AI technology isn’t at the core of your groundbreaking startup idea? Do you still need to become an AI-based startup to be successful in 2024? I’d like to share some personal thoughts from the front lines of running my own AI startup.
Should my startup’s core offering include AI?
Businesses started solely to chase trending tech rarely succeed in the long run. You might be driven by new challenges, personal growth, making the world better, or solving unique problems. Or maybe you’re dreaming of a sweet exit strategy. Whatever your ‘why,’ the core of any successful venture is a product or service that solves a problem or fulfils a need. While AI is a powerful tool for problem-solving, it’s not the only way to address today’s challenges.
Don’t get me wrong; there are many impressive AI applications out there. If you have a revolutionary AI concept and the means to bring it to life, go for it. However, for many emerging companies, especially those with limited resources, investing heavily in AI might not be wise. The time and financial costs of developing and maintaining such systems can quickly become burdensome. Beyond the initial outlay for top-tier talent and cloud services, ongoing expenses for data acquisition, model training, and updates are often unsustainable for startups, especially when balanced against other critical needs.
Luckily, lacking the resources to build your own AI doesn’t mean you have to exclude it entirely. You can enhance your product by licensing existing AI solutions. For example, OpenAI offers tools that can be integrated by a freelancer. If that’s feasible, AI likely isn’t the essence of your product, and that’s okay. Simply adding open-source AI and rebranding as an AI startup, as some do, could harm your investor pitches. There’s a significant difference between having AI at the core of your business and using it as a strategic enhancement
How attractive are AI startups for investors in 2024?
External investment is the lifeblood of most early-stage startups. And while the appeal of AI is undeniable, investors have become more discerning in recent years amidst the flood of AI-related pitches. Today, when you approach investors with an AI startup, they almost reflexively ask, ‘Is your AI proprietary?’ If your answer involves a layer over ChatGPT or an OpenAI API, their enthusiasm immediately wanes. You can almost see the disappointment in their eyes.
Investors are looking for truly groundbreaking, unique AI applications, not generic features disguised as cutting-edge innovation. Be honest from the start: don’t present yourself as a leader in the AI revolution if you’ve never built your own AI. Instead, demonstrate your strategic understanding of AI’s importance and highlight how you cleverly and resourcefully use existing market solutions to enhance your products. This honest approach will resonate with more investors, emphasising your unique position and defensibility in the market. While some VCs may have an agenda to invest in specific technologies or AI-first companies, misrepresentation is ultimately a waste of time and will be uncovered during due diligence. Embrace your strengths, and don’t try to be something you’re not.
Do I really need AI to gain a competitive advantage?
Think of it like this: if it was easy for you to integrate AI into your product, chances are your competitors have already done it too. Instead of following the herd, focus on what truly sets you apart. Invest in sustainable growth, develop a killer brand, and create a product experience that’s almost addictive. That’s how you build a competitive advantage that withstands the test of time and tech trends.
If your product solves a problem more effectively without AI—and you can prove it—it instantly becomes more attractive than your AI-reliant competitors. Remember, AI is a tool, not a magic bullet. It’s not about having AI for its own sake, but about how well your product meets your customers’ needs.
Can I get through 2024 without AI?
Navigating 2024 without AI is entirely feasible. That said, completely avoiding AI on principle isn’t smart, as it robs you of potential productivity and time-saving advantages. It’s crucial to recognise the power of AI as an innovation accelerator or complementary tool. You can use ChatGPT or Gemini to streamline tasks like writing emails, generating meeting summaries with read.ai or otter.ai, reviewing code with Copilot, or improving customer service with Klaus. However, if you’re only using AI for business operations and enabling product features, be honest with yourself: you’re probably not an AI startup.
Consider this: one-third of the global population still lives without internet access. This means the opportunities for impactful non-AI startups are vast and varied. Sectors like engineering, agriculture, healthcare, education, raw material manufacturing, and local services, for example, remain ripe for innovation. Non-AI solutions often have a greater impact in these areas.
Ultimately, a compelling value proposition, a strong business model, and a dedicated team are the cornerstones of success, regardless of whether AI is involved. Non-AI startups can not only survive in 2024 and beyond but thrive! Don’t let the AI hype dictate your long-term strategy. Embrace your startup’s unique vision rather than contorting it to appeal to popular tech trends.
