Armed with the brilliant technologies of artificial intelligence (AI), startups are slated to slay industry Goliaths over the next year.

To stay competitive in a rapidly developing landscape, startups are migrating to a Software as a Service (SaaS) framework and harnessing the vast powers of artificial intelligence. And, Gartner predicts that startups will “overtake Amazon, Google, IBM and Microsoft in driving the AI economy with disruptive business solutions.”

Absorbing and analyzing meaningful user data, artificial intelligence allows businesses to identify user characteristics and predict upcoming trends, benefiting both businesses and consumers.

How Artificial Intelligence is helping Startups

Optimizing business processes, AI chips away at the mundane tasks, freeing time so thought leaders and employees can focus on more pressing projects. And whisking users away on memorable journey, it acts as a virtual companion that recognizes habits, delivering a more relevant experience.

As marketing mogul Seth Godin wrote, “The future of AI is probably a lot like the past: it nibbles. Artificial intelligence does a job we weren’t necessarily crazy about doing anyway, it does it quietly, and well, and then we take it for granted. No one complained when their thermostat took over the job of building a fire…And no one complained when the computer found 100 flights faster and better than we ever could.

“But the system doesn’t get tired, it keeps nibbling. Not with benign or mal intent, but with a focus on a clearly defined task.”

coding artificial intelligence algorithm

Embracing Innovations

Think of AI as an army of micro-sized robots that are strategically deployed through the ether with a mission to gather, analyze and communicate information–victory imminent.

AI can:

  • Analyzes data to predict user behavior
  • Saves time
  • Maximizes productivity and profitability
  • Offers intelligent support
  • Identifies sales opportunities

Investing in AI is critical for sustainability – Gartner predicts that by 2020, a staggering 85% of customer-business interactions will be non-human.

Before rejecting AI implementation, consider the Blockbuster blunder where the leading video rental company scoffed at the idea of partnering with a small streaming business called Netflix.

artifical intelligence and city grid image

Predictive Analysis

In hurried world driven by technology, people are shifting support toward businesses that offer customized interactions. AI uses relevant data to predict future trends and buyer behaviors, ultimately improving the customer experience and overall business performance.

Kind of like Amazon that makes shopping easier with user-tailored recommendations, Apple’s Siri that shares information in a conversational tone, and Google’s personal assistant that simplifies research.

Investment Grabber

Launching a business into hyper cyberspace really isn’t rocket science, nor is it specific to large companies like Google or Amazon–the opportunities of AI are increasingly beneficial to startups. And, startups using AI technologies are significantly attractive to investors.

According to CB Insights, “more than 173 startups using AI as a central part of their product or service raised a record $1.3B in funding in 2016.”

Shopify logo

Ottawa-based Shopify – an early adopter of artificial intelligence–continues to grab the interest of investors, with $253.3 million in funding.

“In the past few years Shopify has democratized online retail by delivering the easiest and most robust platform to businesses looking to sell a product. They have demonstrated that they truly understand the future of commerce…” said Jim Orlando, Managing Director at OMERS Ventures. In 2013, Shopify secured a $100 million Series C investment that was headed by led by OMERS Ventures and Insight Venture Partners.

Shopify’s fierce commitment to cutting-edge technologies poised it for massive growth. It loaded its arsenal with AI-powered tools and positioned itself against global giants.

How Shopify became a retail luminary really isn’t a secret. It started in 2006 as a small group of five that was dedicated to the sales of snowboard equipment. The team, headed by co-founder and CEO Tobias Lütke, then explored new technologies that would elevate their brand.

This evolved into Shopify, an omni-channel commerce platform, fueled by artificial intelligence that would “nibble away” the competition.

Today, as the patriarch of 600,000 merchants, Shopify is a global e-commerce company, that employs 3,000 across North America, with sales of about $82 billion.

Earning a spot in the “Unicorn Club”–a group of privately-owned startups with a valuation of $1 billion or more–Shopify continued its climb and in 2015, after going public it became a global phenomenon.

While its place in the Unicorn Club was rare, Shopify’s success story is not.

Artificial Prediction

It’s predicted that insights-driven businesses will account for $1.2 trillion in 2020 and that integrating AI into business operations will be incredibly profitable, with hundreds of billions of dollars in value spanning many industries.

In a McKinsey podcast, Michael Chui, partner with the McKinsey Global Institute, said:

“If you’re a company where marketing and sales is what drives the value, that’s actually where AI can create the most value. If you’re a company where operational excellence matters the most to you, that’s where you can create the most value with AI….It goes through everything from managing human capital and analyzing your people’s performance and recruitment, et cetera, all through the entire business system. We see the potential for trillions of dollars of value to be created annually across the entire economy.”

future predictions and idea, a light builb

In the very near future

AI–that has been compared to the invention of electricity–is expected to explode. It’s a game-changing technology that every business, particularly those in the startup-growth phase, needs to invest, or risk being left in the dark.

“In 10 years, if you’re not using some sort of AI-enhanced assistant, it will be like not being on the Internet today,” said Kaza Razat, PWC panel experts and an AI developer.

 

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