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Your AI-native startup ain't the same as a typical SaaS company | TechCrunch

May 02, 2024 - techcrunch.com
Rudina Seseri, founder and managing partner at Glasswing Ventures, emphasized the unique challenges faced by AI startups at the TechCrunch Early Stage event in Boston. She clarified that being an AI company requires having algorithms and data at the core of the value creation, and not just connecting to AI APIs. Seseri highlighted the differences in how customers and investors judge AI companies versus SaaS startups, noting that AI products require time to mature and gain customer trust, unlike SaaS products which can be launched even when not fully finished.

Seseri also discussed the competitive landscape for AI startups, noting the dominance of big players like Amazon, Microsoft, Google, OpenAI, and Anthropic in the infrastructure and large language models sectors. She advised AI startups to focus on the application layer, similar to how SaaS companies thrived in the cloud era, or selectively in the middle layer. She emphasized the importance of unique data access and unique algorithms for AI startups, stating her preference for investing in these areas.

Key takeaways:

  • AI startups face unique challenges and are judged differently by customers and investors compared to SaaS startups, according to Rudina Seseri, founder and managing partner at Glasswing Ventures.
  • AI products require time to mature and gain trust from customers, making it difficult for early-stage startups to find early adopters.
  • AI startups need to stake a defensible place in the AI market, which is challenging due to the dominance of big players like Amazon, Microsoft, Google, OpenAI, and Anthropic.
  • Seseri advises investing in the application layer and selectively in the middle layer of AI, emphasizing the importance of unique data access and unique algorithms.
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