The advent of artificial intelligence has significantly changed the landscape of entrepreneurship. The figures say it all. Global AI startups garnered a staggering $50 billion in funding in 2023. Additionally, they had already received $11.4 billion in Q1 2024—roughly 17% of all funding worldwide.
AI is clearly a soft spot for investors, which helps to explain why it’s continuing to draw sizable funding throughout the venture capital winter. It makes sense that, at the 2024 Y Combinator demo days, AI accounted for 172 out of 247 projects.
The rise of AI: from specialized to essential
AI has advanced significantly since its early days in academia and science fiction. What was before seen as specialized and unfeasible has grown into a significant industry. AI is becoming a crucial part of our daily lives, whether it is through voice-activated phone assistants or recommendation algorithms that make online shopping easier.
Thank you to user-friendly tools like Google’s Gemini (previously known as Bard) and OpenAI’s ChatGPT, generative artificial intelligence is the talk of the town. The market for artificial intelligence is predicted to grow rapidly due to this upsurge in popularity, from a meager $40 billion in 2022 to a staggering $1.3 trillion by 2032.
However, Gen AI offers previously unheard-of possibilities for task automation and data synthesis in highly regulated industries like healthcare, finance, and government services. It’s not only about consumer goods however. Consider HCA Healthcare, one of the biggest healthcare organizations in the world, which is utilizing it to expedite the creation of medical notes. Additionally, the financial ratings company Moody’s has launched its Gen AI Research Assistant to assist clients in finding novel insights from data, analytics, and credit research.
Startups are keen to make an impression and contribute their creativity. Tracxn reports that there are more than 67,000 AI and machine learning projects worldwide, in addition to more reputable AI companies. Emerging now is the next generation of players in the AI enablement sector. Startups help with crucial AI issues, such as preventing hallucinations and resolving ethical quandaries, in addition to training, deploying, and evaluating large language models.
The key query is: How can one differentiate themselves from the throng of rivals and stay ahead of the pack?
The PR traps to avoid in a crowded industry
In a highly competitive market, good PR has become a critical success component for AI ventures. However, many companies undervalue public relations (PR), thus undermining their attempts to draw in and retain clients. These are the errors that they commit most frequently.
- Filling the product basket with all of the eggs
Modern technology is no longer enough to ensure success. Startups frequently believe that their product will speak for itself on its own. It’s true that having a better AI solution is essential. But it can be expensive to overlook the significance of brand building and effective promotion.
AI projects should initiate contact with their target audience in order to get attention. This entails contacting possible clients using a variety of platforms, including social media, Product Hunt, and well-known publications like Forbes, TechCrunch, Entrepreneur, and many more.
However, it doesn’t end there. Making an impression is crucial in a highly competitive setting. It won’t do your offering justice to carry on with the same old routine as everyone else. Developing both your company’s and your own personal brands as a founder is one powerful method to set yourself apart. The foundation of your power is your reputation, which occasionally has a greater effect on luring partners or investors than the actual product.
- Ignoring audience research
Not personalizing their communications for various audiences is another major error that many AI startups make. Some projects adopt a “one-size-fits-all” strategy in an attempt to attract the attention of everyone. But this all-encompassing approach frequently dilutes the message and loses out on chances to engage investors and prospective clients.
Consider a startup creating chatbots with AI with the goal of helping both businesses and private consumers. But all they’re talking about when it comes to PR is creating personal content. By not emphasizing how their software may help with creating marketing strategy and descriptions, they are ignoring businesses. Comparably, some AI initiatives may employ technical language that is only understandable to computer experts rather than developing engaging stories that are relatable to regular people.
Market participants must do in-depth research, divide their audience according to pertinent factors like industry, demographics, and pain areas, and modify their PR efforts as necessary to avoid falling into this trap. Consider your company as the Rubik’s Cube, as I’ve stated in a previous post. Similar to the cube’s different hues, your business can be exhibited from a variety of perspectives depending on who is viewing it. Always be willing to take a chance and adjust.
- Launching public relations initiatives too soon
When it comes to PR, timing is crucial. An early start could be more detrimental than beneficial. In reality, because they frequently fall short of investors’ and clients’ expectations, businesses frequently make the error of launching media campaigns during their early MVP phases. As a PR specialist, even for their own benefit, I frequently witness companies finding it difficult to answer my questions regarding their operations. Because they have distinct expectations and aspirations, journalists, partners, investors, and end users are far harder to please.
Let’s look at an illustration. The much awaited beta version of Krutrim AI’s LLM and an AI assistant akin to ChatGPT—but with an emphasis on Indian culture—were just made public. Users who discovered errors in responses to everything from common inquiries to translations, arithmetic issues, and logical reasoning quickly began to criticize the AI chatbot. OpenAI, which built the bot, even took credit for it, blaming the glitches on flaws with the training dataset.
The creator of Krutrim has established two unicorns in India, Ola Cabs and Ola Electric, and has a track record of success. It’s very likely that the business will fix any issues brought up and enhance its concept. For more modest AI firms, this might not be the case. It’s best to hold off on PR until you’ve established a strong foundation with distinct positions, dependable procedures, and ideally some noticeable outcomes.
- Creating excessive hype and providing inadequate results
Some AI firms have a tendency to exaggerate their products and capabilities in an attempt to attract attention and win investment, making bold claims that they are unable to fulfill. When a startup doesn’t live up to the hype, stakeholders, investors, and customers are frequently disappointed.
Inflection AI raised more than $1 billion last year at a $4 billion valuation thanks to the support of industry titans like Nvidia, Eric Schmidt, and Bill Gates. Pi, an AI chatbot created to provide customers with emotional support and guidance, was Inflection’s main product. But now there are whispers that the business is planning to get out of Pi before it even has a year to go from launch. It appears that the business was unable to fulfill its commitments.
There are situations when communicating more cautiously and openly is beneficial. Showcase actual successes and milestones rather than grandiose assertions. Startups may ensure a more sustainable route to success by being straightforward and honest with their audience and investors.
- Disregarding data privacy and AI ethics
Data privacy and ethics are more crucial than ever in a future driven by AI. In an effort to promote ethical innovation, groups like The Israeli Association for Ethics in AI have grown in popularity. They collaborate closely with developers, researchers, legislators, and common users.
Regretfully, not all AI firms are putting enough emphasis on these issues in their public relations campaigns. This mistake could have major consequences, such as harm to one’s reputation and legal issues. Carelessness can drive away potential clients, whether it’s through improper treatment of personal information or ignoring moral dilemmas.
Consider OpenAI, which is presently dealing with legal issues. The New York Times filed a copyright infringement lawsuit against them most recently. In addition, they are juggling several lawsuits from musicians, writers, record labels, and other parties. One even goes so far as to claim that the business trained its ChatGPT model by unlawfully obtaining vast amounts of personal data, including medical records and details regarding children.
AI initiatives should prioritize ethical behavior and compliance above everything else in order to minimize such hazards. One of the most important things for long-term success in the complicated AI field is following rules and proving that one is dedicated to ethical AI research.
Considering the future
AI startups may soon encounter more difficult obstacles. Given that so few companies have made a profit, some industry leaders are starting to question whether the industry is overhyped. Effective public relations (PR) may be the difference between success and failure during unpredictable times.
AI companies may increase their visibility, draw in clients and investors, and earn a competitive edge in the market by avoiding common errors and implementing strategic promotion techniques. In the end, it all comes down to showcasing your unique AI solution to the world.
