By Sascha Eder, COO and founder of NewtonX
There were two primary factors that led to the first commercial applications of artificial intelligence (AI) in the late 2000s: the explosion of big data, which allowed for sufficient training material for AI, and the birth of cloud computing, which allowed for affordable storing and processing of big data in near real time. Today, the vast majority of companies -- small, medium and large -- have access to both factors: affordable cloud computing and a wealth of data. This means that the vast majority of companies can use AI to automate processes and undercut less tech-savvy competitors.
In particular, using AI to maximize efficiency can help small businesses and startups compete with incumbents that are too large to rapidly adapt to AI-driven processes. As Alex Chriss of Intuit recently wrote, "In this era, nimble, more adaptable small businesses are poised to reap advantages in equal, and often greater proportion to large companies -- despite their deep pockets and data goldmines."
As the COO and founder of one such nimble AI-powered startup, I've identified four key ways in which small businesses can leverage automation to beat out large incumbent competition.
1. Make one hire, and make it a good one.
The absolute most important first step to beating competition through AI-powered automation is hiring the right person to do it. When my co-founder and I conceived our company, we knew that before we could even begin to court clients, we would need someone with the right expertise and technology background to back us up. We targeted technologists who had formerly been in VP or C-level roles at large technology companies and focused on finding a person who could build new AI-powered processes from the ground up but also manage a team at scale.
Even the smallest startups can make this hire. Our company's CTO was our very first hire and she has since built all of the differentiating AI-powered features that have enabled us to grow to a team of 25.
2. Start #NoFilter sessions to identify pain points.
The best place to start automating is internal, where you can experiment and finesse with automating processes before releasing the technology to your customers. In fact, this is how Amazon Web Services (AWS) was started: Amazon was having trouble scaling its development environment with third-party providers, so it built a scalable cloud infrastructure internally. Then, when the company realized its technology was more robust than any other on the market, it released AWS to the public.
To identify which area to automate, turn to the people on the ground, the ones executing your business functions. Establish weekly or bi-weekly #NoFilter sessions with these employees to get feedback on the biggest time sucks and pain points in your team -- and then build a proprietary solution.
3. Be faster and cheaper.
Don't automate for automation's sake. Instead, take your internal pain points and identify the processes that will enable you to deliver product faster and cheaper than your competitors. If there's one workflow that everyone in your industry does manually, focus on automating that one first. If you can deliver your product faster and cheaper than competitors, you will end up gaining significant market share.
4. Take a very simple first step.
Don't try to overhaul your entire industry all at once. Remember that any AI-powered automation you implement will be buggy and unreliable at first (that's why you keep it internal). Focus on a narrow time suck and build a simple solution to that before anything else. For instance, in my company, the very first thing we automated was message sending -- a fairly routine, simple task, but one that at scale can become very time-consuming.
AI is a truly disruptive technology in the sense that it will mobilize small businesses before large ones, upending incumbent business giants and ushering in a new era of efficiency and speed. Take advantage of this by taking the first steps toward embracing AI-powered automation in your business. Then, use your agility to beat the behemoths.
Sascha Eder is the COO and founder of NewtonX, the world's first AI-powered expert network.