While Big Tech suffers, startups can grow with AI

This year has not been kind to Big Tech. The FANG+ stock market index, which tracks the 10 largest technology companies, has fallen more than 40% this year. Meta, once Silicon Valley’s darling, has seen its valuation plummet more than 70%.

Part of the reason for the decline is that these companies are hit by a perfect storm of antitrust regulation, data privacy concerns, and regulatory oversight, all amid an unstable macroeconomic environment.

But that doesn’t mean the tech sector’s future is bleak. Looking ahead, there’s no better place to start than with startups. While major technology investors are reassessing risk and predicting slower growth, startups can achieve faster growth by filling the gaps left by incumbents.

One area where startups can thrive is by using artificial intelligence (AI). As a VentureBeat article points out, some of the recipients of the best stock deals in 2022 are AI research labs, such as Anthropicraising a $580 million Series B.

Applications of AI in business are far-reaching and diverse. Let’s take a closer look at how companies can use AI for growth.

AI enables product-driven growth

At a time when consumers are cutting back on discretionary spending, product-driven growth is more important than ever. And AI can help.

Take the fashion industry. Startups like Stitch Fix and Mode.ai use machine learning (ML) to recommend clothes to their customers based on their past purchase history and preferences. This personalized approach has helped them differentiate themselves from traditional retailers who typically rely on mass marketing campaigns to sell their products.

This approach requires a data-first mindset. Startups need to be able to collect, clean and analyze data to train their AI models. But once they have a good data set, the possibilities are endless. Consider, for example, a historical dataset of clothing sales. With this data, a startup can use AI to find trends in clothes that are typically sold together and make recommendations to customers accordingly.

Amazon pioneered this approach with its product recommendations, but startups can now go beyond simple product recommendations and use AI to provide their customers with a truly personalized experience, from personalized messages and search results to content recommendations and even targeted ads.

AI can also be used to improve product design. Startups like Monos. com use AI through product lifecycle management software bringing innovative products to market. They recently increased $30 million in financing to further grow their business.

AI-powered product design is just one example of how startups can use AI to create new products and services that address unmet customer needs. With Big Tech facing pressure to innovate, startups have a real opportunity to steal the march on them with AI.

AI can help your startup go global

Another advantage startups have over incumbents is their agility. They can switch quickly to seize opportunities in new markets.

This was the case for startups like Zoom and Discord, which saw their user base skyrocket as the pandemic hit and people were forced to work from home. These companies were able to quickly adapt their products to meet the needs of a new customer base and ride the wave of demand to become one of the most valuable technology companies in the world.

Of course, relying on serendipity is not a recipe for long-term success. But startups can increase their chances of success by using AI to identify new market opportunities.

For example, a startup might use natural language processing (NLP) to analyze customer reviews to identify patterns in customer feedback. They can then use this data to develop products or services that address unmet customer needs.

To implement the same strategy, a startup could use tools like Expert.ai to analyze customer reviews. The API makes it easy to extract meaning from text so startups can focus on using the data to develop new products and services. This is an example of an automated ML pipeline that can be used to drive product development.

AI can help you automate and scale

Finally, startups can use AI to automate and scale their business. This is especially important for high-growth startups that need to scale their operations quickly.

An example of this is Anyword, a startup that uses AI to automatically create product descriptions, email subject lines, and other texts. The company has grown rapidly and recently raised $21 million.

Anyword’s approach is based on large language models, pre-trained on massive amounts of data and then tailored to specific tasks. The company’s technology is built on top of the GPT-3 model, made available by the OpenAI research lab.

This approach can be used to quickly scale up content creation and other types of operations that require human labor. And it’s not just limited to startups. Large companies also use AI to automate their activities. For example, American Express uses AI to generate automatically customer service responses.

Whether your business is a start-up or a large enterprise, AI can be used to automate and scale your operations. This is an area where startups have a real advantage over incumbents, who often struggle to scale their businesses effectively.

Valerias Bangert is a strategy and innovation consultant, founder of three media outlets, and published author