Editor’s Note: The following is a transcript from the Norwest Nowcast above where Norwest Partner Priti Youssef Choksi explains why the sweet spot for AI startups is developing products that incorporate AI into people’s existing workflows – not creating stand-alone AI solutions.
Hi, I’m Priti Youssef Choksi with a Norwest Nowcast about the opportunities I see for early-stage AI companies. As you can imagine, we’ve seen our share of business ideas around AI lately. I tend to evaluate companies in this space according to three criteria.
First is the quality of the team.
Second, I asked myself, do they have unique access to data beyond what’s available in today’s foundation models?
And third, the ability to integrate their solution into existing workflows. I’m going to focus on this last point today.
Now, humans aren’t going away anytime soon. And the key value proposition of AI is working alongside us humans to unlock our productivity. You can broadly divide people’s work into two types of tasks: creative, learning-oriented tasks — perfect for us humans — and repetitive, process-oriented tasks — ideal for AI. The latter don’t require any ongoing inputs, but you cannot get your work done without them. That is a sweet spot for AI startups.
Now, early-stage companies that try to introduce standalone AI products into the market will have a hard time driving distribution. Instead, founders should ask themselves, “how will my solution incorporate AI into people’s existing workflows?” That is, how will it optimize those repetitive tasks without requiring people to learn net-new processes?
Ultimately, AI will become part of everything we do. And while we have to ask ourselves whether or not the use of AI is appropriate for a particular use case, I’d caution against treating it like a standalone technology. That’s why I believe startups like Xembly, one of our portfolio companies, have the right approach. Xembly provides an automated, AI-powered chief of staff that works within the apps we already use every day to coordinate tasks and maximize efficiency.
I expect to see a lot more tools winning market share by offering such an AI integration play. What do you think? Use the comment section below to share your opinions?