Artificial Intelligence (AI) is the rage in business and ventures today. As with other emerging blockbuster technologies, we’ll need to look across the landscape to distinguish between brilliance and mediocrity. Here are five critical questions that may help.
#1. Will AI-developed insights improve the venture’s likelihood of success?
Entrepreneurship often places a disproportionate emphasis on ideas. ONE Wharton Experiment looked at whether artificial intelligence could generate better ideas than students. The results showed that AI produced a 47% success rate based on ideas that prospective buyers would buy compared to 40% for students. However, is the success of the venture more linked to business skills than the original idea? In fact, among the $85 billion entrepreneurs, only 1% succeeded because of the idea itself. The other 99% succeeded due to the entrepreneur’s skills in developing smart strategies that helped beat competitors and having the skills to execute them.
#2. Can AI-powered reverse design be better than design thinking for entrepreneurs?
An article in the Harvard Business Review notes that one advantage of artificial intelligence is to develop ideas for using a technology before discovering the unmet need it can solve. Many entrepreneurs seem to do this already – they develop a product and then hope for a market, which is perhaps why many ideas fail. On the other hand, many great ideas and technologies are rejected before a brave entrepreneur can prove his potential.
· Xerox developed the laser printer, Alto (mouse-based computer), and Ethernet, but others commercialized it. Why didn’t Xerox commercialize them?
Is more ideas from artificial intelligence the answer? Artificial intelligence must pick the winners. Will this happen?
#3. Can AI Imitate Steve Jobs? More importantly, should the developer of such an application release or use it?
A future advantage of artificial intelligence is speculated to be the development of new blockbuster products, as Steve Jobs did with iMac. How would anyone know if the AI algorithm was really a Jobs clone? And if someone could actually develop and prove an AI clone of Steve Jobs, should they release it?
#4. Can AI do better than VCs struggling to recognize brilliance?
Another article on artificial intelligence suggests that entrepreneurs act on smart ideas and avoid bad ones. But we can separate the genius from the trash, given that:
· No one recognized Sam Walton’s brilliant idea of locating big box stores in small towns.
· IBM did not recognize Bill Gates’ brilliant idea to license the operating system to IBM on a non-exclusive basis.
· Few recognized Michael Dell’s brilliant idea to sell computers directly to the consumer.
· Nobody recognized Google’s great search engine – more than 10 VCs rejected the idea and one company was unwilling to buy it when the founders tried to sell it for $1,000,000.
· No one recognized Jobs’ brilliance when he launched Apple. Maybe that’s why he got fired.
If VCs, the go-to professionals in venture finance, could accurately predict brilliance, why do they fail so often? Can AI do better?
#5. Can artificial intelligence do better than billion dollar entrepreneurs to find the dominant advantage?
Anticipating a winning strategy involves finding the successful product-segment-competitor-sales-leader combination to dominate the emerging industry. Can AI do this without field testing? If so, does that mean the AI is constantly monitoring everything?
MY VIEW: At the intersection of artificial intelligence and entrepreneurship, the lure of accelerated idea generation is enticing. However, the key challenge is distinguishing between gems and junk for the individual entrepreneur and in execution skills. What if 200 entrepreneurs start their businesses with strategies developed by artificial intelligence? Can AI pinpoint the skills that will set them apart and lead to success, especially if they use the same AI tool and deploy the same AI-developed strategy?