Our Blog

Posted On July 5th, 2017 by Crowded Ocean

Building a startup: ingredient or solution?

AI (Artificial Intelligence) is one of those ‘about to happen’ technologies that has finally happened. Just as every year from 1985 to 1998 was going to be ‘The Year of the LAN’, AI has had the same pre-announced success for what seems like the past 20 years. Now, though, it looks like reality has caught up with the hype.

Over the past two years we’ve worked with a number of AI-powered companies. And it’s been an interesting journey, as both the companies and Crowded Ocean search for the best way to leverage the growing interest in AI while at the same time trying to find a way out of (or above) the noise.

Positioning your company based upon an ingredient

But here’s the most important distinction we can impress on our clients: you’re not an AI company. AI is an ingredient; you’re selling solutions. AI just happens to be the best way to achieve that solution.

This is a tough concept for founders to grasp, since they were funded as much for their core technology as for their market. (In one case, we had a company that was focusing its AI on retail—predicting what the market was going to buy a year ahead of time. But when they looked at who was spending what, they pivoted before announcing and became a security company.) But, either way, our counsel to them would have been: “You’re a retail company. Or a security company. Not an AI company.”

To be clear, there is nothing wrong with being an ingredient company. If the underlying technology is creative or distinct enough, it will definitely grab the interest of influencers, analysts—even early adopters. Everyone wants to play with the new shiny toy. And, again, if the technology is unique and compelling enough, that company will be acquired quickly and at a premium. So, if that’s your goal, we’ll work with you to make you the most compelling ‘ingredient’ play out there. But if you’re in it for the long haul, then that ingredient has to be secondary to the solution you’re providing and the market you’re trying to establish.