With the advancement in technology and increased awareness among people, start-ups are now trending. It is much easier now to build up a company of your own and nurture your ideas. But with opportunities, challenges follow and overcoming those challenges will lead to success.
Artificial Intelligence though very expensive and difficult to implement for start-ups, it can help to mitigate the efforts if implemented correctly.
First and foremost purpose of using AI is that it can attract a good number of venture capitalists. Nowadays investors are more interested in the business if in near future it is going to adapt AI. This is because AI can take the product/service to the next level. It can provide a competitive edge in the market where competition is very rigorous.
Over and above, if the startup is AI Startup then it can attract huge investment. The “2018 A.I. 100” report released by research firm CB Insights shows the top 100 AI based startups. The get list of these companies please click here.
The image below shows the funding allocated to startups in different sectors.
Secondly, AI can reduce market analysis cost. It does this by providing correct user segment to target. There are many tools and technology available based on AI using which one can refine their customer base. These tools will help to allocate the resources at the right place. Predicting the demands of the market will also be possible with the help of AI. The degree of success of the product/service can be known quickly and accordingly future strategies can be established. Thus, AI can tell the position of particular product/service in the market using fewer funds and more analysis.
Analysis of the data collected and building strategies based on it are two very crucial activities for any organization. With the help of technology, the analysis is done quickly which automatically increases the time allotment on strategy building.
Recruitment and selection process is now redefined using AI. This can be used by the startup to attract intelligent people towards their organization. This will not only help to select candidates easily but also will increase the efficiency of the human resources of an organization.
AI enabled system can automate many regular processes of the organization and can reduce the time allocated to mundane activities.
There are many conversational bots available which will improvise the customer relationship management system.
Today data is the backbone of every strategy and AI helps to collect, store and manage a large amount of data. For every new business, it is very important to frame good strategies because the success of an organization depends on it. Hence, implementing AI can reduce the difficulty level of this task.
According to PwC, it is estimated that AI could contribute $15.7 trillion to the global GDP by the year 2030 (RAPP, NICOLAS; O'KEEFE, BRIAN;,2018).
Sometimes there is no clearly defined business case.
At times finding the area of application of AI can be a big challenge for startups.
AI requires a huge investment in data management which might be difficult for startups in initial stages.
A proper pool of talent is required to implement AI. Lack of skills in this subject may lead to failure of implementation. Hence, it also becomes a challenge for the new company to get good talent on board.
Also, there is not much data available with the startups to analyse.
The organizations which overcome these obstacles can successfully stand at a good position in the market.
Thus, AI can be a boon to the startup if its importance is correctly recognized. Otherwise, the complexity and cost of the system will not be manageable which in turn might become a bane for the newbie.