Choose Your Own Adventure: Which AI Business Model Is Right For You?
Artificial intelligence is revolutionizing every aspect of work and life, as nonstop news headlines make clear. Yet one aspect of the AI disruption remains relatively unexamined: the right business model for AI companies.
It's a commonly held belief that successful AI startups, like cloud / SaaS companies before them, share a common business model. Like AI, cloud software's business model initially puzzled customers and investors. Cloud pioneer Salesforce, for instance, eschewed the big, upfront license payments common with traditional software vendors, and also shunned recurring maintenance fees and costly on-site installations. Now, the Salesforce model is the norm for cloud/SaaS companies—and investors can recite common SaaS company metrics like magic number, CAC and LTV in their sleep.
But it's difficult to graft this cloud business model onto nascent AI startups. This is mainly because cloud and AI technologies differ in fundamental ways: AI is fueled by data, vast amounts of raw computing power and mind-bending algorithms. It's inherently more complex for customers to digest than cloud startups, so the technology has to be sold in different ways, too...
===
by Idham Azhari
No comments:
Post a Comment