How can you ensure your startup can ride the AI wave without being swept out to sea?
ChatGPTT
Looking back at my entrepreneurial journey, I can see how much of my success was about good timing—catching the “wave” of technological changes—the internet boom, web hosting, SaaS—and more. In my book Start. Scale. Exit Repeat. I dedicated an entire chapter to catching the wave of tech changes at the right time to accelerate a startup.
Each has created a paradigm shift in the market, transforming individuals and industries.
We can see how some tech crosses the Tech Chasm—a concept coined by Geoffrey Moore—like robot vacuums or Bluetooth devices. Or how many advancements have NOT crossed the Chasm—like Apple’s Newton tablet or Google Glass. And some, the jury is still out as they struggle to move out of the chasm, like NFTs and VR.
Now, in the 2020s, AI is the next wave rushing in to transform every industry. Recently, on Startup Club, we discussed how startups can wield AI to grow their businesses. While many companies are implementing AI to become more efficient and faster at what they do, entrepreneurs can leverage it in a totally different way—to solve problems and innovate tomorrow’s solutions now.
For example, Yeshiva University shared how they use AI to identify plant diseases to help boost agriculture. Or Justin, who is revolutionizing cold calling by combining the powers of Whisper, Chat GPT, and ElevenLabs. Both are proof that the possibilities are truly limitless.
But how can you ensure your startup can ride the AI wave without being swept out to sea?
Surviving the Chasm
Some see Crossing the Chasm as luck, but in my experience, it’s been a matter of paying attention to what’s happening in the market to meet people where they are while keeping an eye on the future.
There are a few tenets to follow:
1. Be an Early Adopter
Doing so will make you an early expert. You can create opportunities for yourself to consult on using AI, teach courses, and create products around effectively using AI.
When the next AI tool comes along, you want to be on the front end to monetize your expertise when it crosses the Chasm. Even if the tech fails to catch on, you can still pivot and use what you’ve learned for the next AI darling.
Recently, I have been creating CustomGPTs on OpenAI’s platform. In AI, you no longer require complex coding to create applications.
2. Don’t Try to Change Customer Behavior
When you think about tools like DALL-E or Midjourney, they don’t require new customer behavior—you just type in a prompt like you would doing a Google search. When personal computers first launched, you had to learn some coding, which slowed down crossing the Chasm.
But with the best AI tools, there’s no new skill users need to acquire to get the benefits. I often say startup founders are jack of all trades. With AI, you can now say they are masters of all trades.
3. Strive for Depth, not Breadth
Let’s say you are part of a team developing or investing in a new AI tool. Your goal in the Chasm isn’t to get as many users as possible—it’s to have a few highly satisfied and influential users. Invest in the user experience and win those first few raving fans for your service—instead of investing in ads. Once you have a set of brand evangelists, you increase your chances of crossing the Chasm and entering the Tornado.
Thriving in the Tornado
After a tech innovation crosses the Chasm to enter the mainstream, it moves into the “Tornado” phase—a whirlwind of market frenzy as everyone tries to jump in to grab a slice of the pie. But how do you win in a Tornado?
1. Be Fast, not First
It’s not always the first to market who wins, but whoever can do it better and faster. Remember the MPMan F10 player? Probably not, but it was the first MP3 player on the market. Yet everyone remembers the iPod, which came out three years later.
With AI, you can expect to see the same story play out. Leverage AI to be better and faster than your competitors.
2. Find the Bottlenecks
Instead of going head-to-head with others, develop a service that solves a pain point. Look at what’s already in the market and find the bottlenecks in the services people need alongside using AI. For example, a service that blends image and text generation so consumers only have to make one stop, not two. Figure out the sticking points people are experiencing with AI—and then create a solution you can monetize.
3. Be Human-centered
In the Tornado, it’s not always the best tech that wins, but the one that is the most human-centered. Sony’s Betamax is often considered better tech than VHS, but VHS players were more human-centered and won the market. With AI, pay close attention to the user experience and interface.
4. Make it Easy
You are targeting the early majority, not the adopters in this phase, and they, like most of the population, fear the complexities of technology.
The Greatest Tech Shift
AI represents the greatest tech shift in your lifetime, and this shift will mint more millionaires than any other in history. As you develop what this looks like for your startup, apply these tenets, and you’ll have a far better chance of crossing the Chasm and winning in the Tornado.
How are you already using AI in your startup? How might you apply it in a new way to solve a common problem and make money from it?