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Buzzword vs. reality: AI Value Matrix

AI/ML is a paradigm shift. We believe the magnitude of its impact will be as massive as the internet. Ultimately every business will use AI/ML and software that does not have AI/ML shall lose out.

Most of the startup pitches I have heard over the last 12 months mention AI/ML. Of course, a lot of it is just fluff — entrepreneurs using hot buzzwords. How to separate the wheat from the chaff? I shall be writing a series of posts on this topic. The first issue in my mind is to understand the AI/ML value proposition of a startup.

AI Value Matrix:

Innovation and Efficiency

True innovation is using AI to make possible something that was impossible otherwise. uses AI to prevent eCommerce fraud by evaluating over 200 parameters in real time. Doing this manually is just not possible. Clearly this use of AI does not replace any human being, rather the innovation grows the eCommerce ecosystem by protecting it from fraud.

Using AI to drive efficiency can lead to a significant improvement in costs or productivity. Newsbytes uses machine learning algorithms to write the news stories. Just 6 editors are able to publish 100+ stories daily. That is the number of stories published in a typical newspaper with a large team — that is an order of magnitude jump in productivity!

AI/ML intensity

Intensity is a metric for how critical is AI to the value proposition. ThirdWatch is an AI focused application where AI is at the core of the offering. The team is obsessed about the efficacy of their algorithms because customers depend on their risk score to accept/reject transactions. TrustCheckr enhances user data by stitching together aspects of the user’s social profiles and using AI to build a trust score (i.e. is the user a fake or a real person). Websites and Apps using TrustCheckr value both the enhanced data as well as the trust score. On the other hand, Newsbytes core value is the quality and format of its stories. Both are more human driven than algorithmic.

In all the 3 startups, AI/ML significantly improves the value proposition. Thus, if their AI/ML technology is real and they can feed it enormous amount of data, we might have a budding unicorn. However, those are two very large IFs and the topic of future posts.

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