Artificial intelligence (AI) is the new glamour word in tech – and it’s no surprise that many businesses are hooking on to it. From well-established corporate companies to start-ups, the massive tech trend is far too tempting, particularly due to the potential of AI to not only improve business efficiency, but disrupt entire markets.
The idea of digital disruption has been around for a good decade now, and AI is certainly one of the most popular technologies of the moment. With the likes of HSBC bringing in AI software to spot money laundering, Sadiq Khan hiring CognitionX to plan for AI and the start-up DoNotPay Chatbot lawyer overturning 160,000 parking tickets in London and New York, it is no wonder that companies – and particularly tech scale-ups – want to dive into the tech trend in the hope of becoming the next disruptor.
Great solutions are being achieved through AI but it is important that growing companies stay true to their values or at least have a well-structured approach. Disruption inspires many; however, the true value doesn’t always come from the end goal of being the next big thing, but a more targeted approach.
AI – why is it so attractive to growing tech businesses?
Disruption is a positive force for good in business – and some of the biggest disruptions seem to be coming from the world of AI. Chief executive of Google, Sundar Pichai, said AI “is one of the most important things humanity is working on”, a comment many couldn’t ignore. The UK government is looking to get ahead with the technology; a recent report issued by the House of Lords highlights that “the UK is in a strong position to be a world leader in the development of artificial intelligence.” Perhaps with that in mind, it’s no surprise that the UK is home to the most AI start-ups in Europe.
The solutions AI can offer businesses and their customers are undeniably astonishing. From law to medicine firms, this year has already seen many stories in ground-breaking AI tech, with many companies grabbing the headlines by tapping into the technology. For instance, a leading British AI app that allows patients to self-assess their symptoms, transforming the way healthcare is delivered, recently captured the news. Babylon is now set to go global following its UK success. With applications that are not only fascinating, but will revolutionise traditional functions from customer service to HR and finance, it’s no wonder that many small tech businesses and investors are keen to have a strong involvement. But could the ‘glamour of AI’ and its disruptive ability be skewing tech scale-ups’ priorities – and damaging their future prospects?
Disruption can’t be an obsession
Artificial intelligence has certainly been one of the most popular tech ‘buzzwords’ in recent years. But whether it’s AI, blockchain or even the emergent quantum computing, the truth is that for many growing tech companies, being part of the latest disruptive wave of technology has a massive attraction.
From smaller tech start-ups to burgeoning scale-ups, the word ‘disruption’ is very much part of the conversation. While being part of a ‘disruptive’ technological world is a powerful, positive thing that offers huge business opportunity, it can very easily become an obsession. This is where disruption becomes dangerous. Instead of disruption being an exciting part of a business, it can become something an entire business model is focused on.
The pursuit of cresting the wave of the next tech trend can see younger businesses overusing buzzwords, innovating in areas they wouldn’t normally focus on, and trying to position themselves as something they’re not, with investors, the media, and even customers. Ultimately, this will leave them chasing their tails. While AI holds a certain glamour it is important tech scale-ups stay true to themselves
Finding your business within a ‘hot’ sector can create its own issues, as money pours in and businesses rush to grab the market share before the area matures. But in reality, the most successful businesses are usually an evolution, not a revolution. There are many examples of this. Take Facebook – Mark Zuckerberg didn’t invent the first-ever social media platform, but had a clear idea of what he wanted to create and embedded it into the business structure. Similarly, you only need look at Amazon to see how being ‘first’ to innovate isn’t always the best position. They weren’t the first to pursue e-commerce, but they refined and some would say perfected it and are now one of the most important businesses in the world.
Businesses can’t just have the next best idea but need a clear understanding of their industry and how their innovation can affect it. In 1988, Intel launched Celeron chips, to overcome the threat of low-cost competitors. The chips weren’t revolutionary; Intel knew they were a cheap product, but ideal for new low-end PCs. Within a year, Intel had 35% of the market. This is a perfect example of what Clayton Christensen once said: “Disruption is a process, not an event, and innovations can only be disruptive relative to something else”.
Focus on your own unique business – disruption will happen when you grow
The most successful organisations, especially when they are growing, are those which are flexible and adaptable to industry changes, learning quickly from mistakes and pivoting into new areas or new customer focus if they need to. To ensure long-term success, our advice to any business is to really think carefully about your idea, place in the market and your business’ unique strengths and ambitions. Build a short-, mid- and long-term business plan around this and allow disruption to come naturally.
Not every business will produce the next DeepMind and in truth, it may not want to. But there can be incredible value in refining an existing model, applying technology in a new way or even serving a particular market niche. By building a business plan based on authenticity rather than trends and buzzwords, entrepreneurs can secure sustained growth and achievement, rather than becoming a flash in the pan.
You need only look at artificial intelligence to see how powerful this can be. Many developments in AI are driven by technology companies that have been around for decades; they have worked hard to evolve, but always kept their focus on who they really are as a business and what their ultimate goal is. Disruption should be a by-product of a brilliant and successful business, not the reason to found it.
With all that in mind, it’s fine for companies to explore the potential of artificial intelligence and its disruptive force. But at the end of the day, pursuing disruption for its own sake will never succeed. Growing tech companies, be true to yourselves.
Simon Wax, Partner, Buzzacott