The author suggests that AI startups need to rethink their strategies, as the typical advantages of startups over incumbents do not hold in the AI industry. They argue that AI is not a new market but a new tool for developing within existing markets. Therefore, startups need to consider how AI will transform their specific market and how they can fit into that growth, rather than simply viewing AI as a large, growing market. The author concludes that while it is not impossible for AI startups to succeed, they face unique challenges and must approach their strategies differently.
Key takeaways:
- The dynamics between startups and incumbents in the AI industry are fundamentally different from previous technological revolutions, making the typical startup strategies ineffective.
- Incumbents have the advantage in the AI industry as they have access to mature products, distribution channels, brand trust, optimized organizations, and significant funding. They also have access to vast amounts of data, which is crucial for training AI models.
- AI is not a new market but a new tool for developing within existing markets. Therefore, the concept of a large, growing 'AI market' is misleading.
- AI startups need to develop a unique strategy that takes into account the specific dynamics of the AI industry, including the significant advantages held by incumbents.