AI Agenda Live Recap: How AI Startups Can Stand Out

Businesses are racing to adopt artificial intelligence solutions that will boost efficiency, increase revenue or give them a competitive edge. But with so many startups promising that their offerings will unlock these benefits, how can AI companies develop go-to-market strategies that stand out?

At AI Agenda Live, Sri Muppidi, a venture capital reporter at The Information, spoke with three leaders grappling with this question:

• Guru Chahal, partner, Lightspeed Venture Partners 
• Alex Ratner, co-founder and CEO, Snorkel AI 
• Samir Menon, CEO, Dexterity

Differentiation-Driven Adoption and Renewal

Chahal, whose firm invests in companies of all sizes and across all sectors, warned that being first is no guarantee of sustained success for AI companies. “If it’s worth doing, there’s going to be 20 companies that are going to try to do it,” he said. “You are not going to be alone for much longer.”

Companies can maintain their edge, Chahal suggested, by building AI platforms that improve as customers use them. “That way, by the time the renewal comes, the platform is actually working better than it did when the customer bought it,” he said.

Dexterity, which builds intelligent robots for the manufacturing and logistics industries, pivoted early on from using commodity robots to building its own hardware—a move that helped the company land one of its anchor customers. “We realized that for robots to really achieve their potential, we had to make investments in hardware, but those are very risky and expensive,” said Menon. “And so we actually looked to the market to see which customers had a core strategic need. We found one, which was FedEx.”

Consider Customer Context

Menon noted that customers are likely to see AI solutions as less of a risk if they are part of enterprisewide IT refreshes rather than stand-alone initiatives. “A lot of large enterprises have systems in place that need to be upgraded,” he said. “You could be part of an upgrade cycle. You could be part of a strategic digital transformation. Be the icing on the cake. The AI ecosystem is not mature enough for you to be the cake.”

Chahal encouraged AI companies to consider value-based pricing strategies, especially if customers can use their solutions to realize considerable savings or generate significant new revenue. “The unique opportunity right now for founders is to shift pricing in a huge way in their go-to-market [strategy],” he said. “Instead of $10 a user a month, you can say: ‘You’re doing this work, and it costs you $10,000 right now; I’ll do it for $6,000.’”

“Our companies that are able to do that, they are some of the fastest-growing businesses globally today,” Chahal added. “You have to think: Does this wave give me an opportunity to price much, much higher?”

Value Versus Hype

Chahal stressed that AI firms must back up their claims with real-world return on investment rather than fantastical hypotheticals. “Customers will question every statement you make,” he said. “You will get one chance. You walk into a Fortune 500 [company], you make a claim, you can’t back it up.…That’s about 18 or 24 months [of groundwork] that just went away. Don’t get tempted by the hype.”

Ratner, whose company labels and manages training data for custom AI models, said AI firms must overcome “impatience with ROI” when working with enterprise customers. “We’re hitting the natural part of the hype cycle curve where enterprise leaders are getting impatient waiting for layers of a very fragmented stack to be put together,” he said.

Both Chahal and Ratner explained that customer support for AI tools must be more intensive than support for more mature technologies. “Traditionally, there’s a model of customer success that is: Watch the usage dashboards, and occasionally ping when usage seems down to ask if they are happy,” Ratner said. “I don’t think AI is at that mature of a state.”

“You cannot go wrong obsessing with what the customer is doing and connecting the dots for them,” Chahal said. “Don’t leave it to the system integrator. Don’t give them a box of Legos and say: ‘You can build anything you want with it.’ Just build the thing for them and give it to them.”