3 Ways to Discover AI Trends in

Any Sector
Last updated on November 15, 2019, published by Daniel Faggella
Daniel Faggella is the founder and CEO at Emerj. Called upon by the United Nations, World Bank,
INTERPOL, and many global enterprises, Daniel is a sought-after expert on the competitive strategy
implications of AI for business and government leaders.
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Business leaders, managers, and consultants with an eye on AI aren’t just

trying to learn what AI can do, they’re trying to discover ways to gain an AI
advantage.

For this reason, discovering AI trends can be particularly important.

 Non-technical professionals who want to contribute to – or even lead – their

company’s AI initiatives need to have insight into their sector-specific AI trends.

 Leaders need to understand AI trends to compete in the marketplace, and

determine the best strategic AI investments.

 Consultants need to come to their clients and prospects with fresh ideas and
open opportunities, to “open the eyes” of their clients in ways that demonstrate
competence and value.

Most of the work that we do with our AI Capability Map services is about
finding trends in quantitative data – which requires hundreds of hours of
expert research, and established frameworks for interpreting and categorizing
data for insight.

While this robust research approach is often the right step for companies who
are on their way to building a complete AI strategy – it’s easiest to begin with
simple secondary research online – and that’s our focus in this article.

In the rest of this very brief guide, we’ll highlight some of the strategies we use
in our research and editorial efforts at Emerj.
 1 – Follow the Venture Money
While AI startups can raise $2MM or even $10MM with just a timely idea or an
impressive resume, $100MM doesn’t come so easy.

Large B and C funding rounds often imply significant evidence of traction

within the market. While some companies get lucky, the AI applications raise
the most money in a sector are giving those kinds of AI applications the best
likelihood of surviving.

Look across the firms who have raised the most money in a given sector (this
information can often be found publicly on Crunchbase, Owler, or Pitchbook).
Of the 20-80 legitimate AI startups within a given sector (e.g. auto insurance,
drug development, trucking, etc) or function (e.g. email marketing, HR, etc),
the top 10% of firms by “funds raised” is likely telling a story.

Patterns can begin to emerge when we ask the right questions about the top
VC-backed firms:

 AI-enabled capabilities. What specific capability are these technologies

enabling? What new ways of running processes or serving clients are these
applications making possible?

 Data access and availability. What kind of data do these applications feed off
of? What kind of data seems most valuable? What new kinds of integrations are
making this data accessible?

 Claims of success. What are the success claims of these top vendors? Do any
of them have concrete, quantifiable results to speak of, or do they only mention
vague results – or simply list client companies with no success claims at all?

Examining the best-funded legitimate AI firms in a sector is by no means a

complete view of AI innovation; it can be the start of “peeling back the onion”
on trends in a sector that reading blogs or press coverage would never arrive
at.

Related resource: How to Cut Through the Artificial Intelligence Hype – Three
Simple “Rules of Thumb”. Sift the real AI companies out from the hype to
improve your web research efforts. Hundreds of our readers swear by these
simple rules to sift through AI hype.
 Related service: Emerj AI Capability Map. Access a comprehensive visual
map of AI ROI in your sector, with a complete assessment of enterprise and
startup innovation.

2 – Listen to Leading Industry CEOs

Press releases are almost meaningless when it comes to genuine AI insight.
In any large sector (eCommerce, retail banking, insurance, etc), the
announcements of enterprise companies don’t serve to disclose actual AI
investment or adoption, they merely serve to present a brand image.

At Emerj we refer to this as the Lens of Incentives:

 Enterprises tend to emphasize and exaggerate the AI applications that make

them look innovative and hip (often customer-facing applications, like chatbots).

 Enterprises de-emphasize or minimize the mentions of their investments in AI

applications that might raise suspicion, or put the company’s AI strategy at risk.

For this reason, an enterprise will promote a press release about their AI
“chatbot” even before their pilot with the chatbot company begins (and even if
the actual bot fails miserably). The same company will almost never divulge
the AI company that it uses for cybersecurity (even if they invest millions per
year with this vendor), as this might put the company’s data at risk from savvy
hackers – or raise security concerns in the eyes of customers.

Instead of press releases, listen carefully to the statements of top

management (CEO, COO, etc) at the leading firms in your industry. In
banking, this might be JPMorgan or Goldman Sachs, in retail, this might be
Walmart and Amazon. Look for speeches and (often even better) panel
discussions about AI in their industry – or the future of their industry – and get
a sense of the trends they care about most.

These presentations often skirt major issues and usually won’t divulge the
crown jewels of a competitive strategy, but they will often present a candid
insight into the priorities of leading executives. Find patterns by asking the
right questions:

 Threats. Are there any common risks or threats that executives aim to address
with AI, or that they think might be caused by AI?
 Future vision. What kind of AI-enabled future are these leaders painting for this
industry? What key changes do they think are inevitable? What are the
implications for competitive strategy?

Related resource: The AI in Industry Podcast. In addition to doing your own

research on the AI perspective of leading executives, let us do the research
for you by asking hard-hitting questions. From the Head of Core Machine
Learning at Facebook to the former Head of AI at HSBC, the AI in Industry
podcast shares the best ideas of leading AI thinkers ever week.

3 – Lock on to Existing Industry Priorities

While artificial intelligence is enabling new business models and capabilities –
and while AI may be the new electricity – enterprise “AI transformation” is still
many years away in most sectors. Most bankers are not “rethinking” banking
in light of AI capabilities. Most brick-and-mortar retailers are not “rethinking”
retail. They are focused on whatever they were focused on before AI came on
the scene – they’re simply aiming to keep the business running.

This means that AI will often not be adopted where it has the most promise for
transformation, but where it has the most alignment with existing priorities in
that sector.

These industry priorities can take a number of forms:

Constant priorities of a specific sector –

Example: In the US pharmaceutical sector, blockbuster drugs are key to

success and market share – and are the most defensible, profitable
opportunity for growth. Consequently, it should be of no surprise that AI
applications in drug development have an easier time gaining traction (or at
least executive conversations) than applications in, say, sales (where
comparatively little is invested in proprietary tech).

Priorities specific to an era –

Example: After 2008, the banking sector has been increasingly focused on
compliance and regulation. Not surprisingly, AI initiatives for fraud and
compliance are massive compared to other banking functions (marketing or
accounting, for example).
 While each sector varies, the following questions can provide fruitful initial
clues as to where AI is likely to gain traction more easily in a given sector.

 What keeps CEOs in this sector up at night, regardless of AI?

 What do industry leaders already think will separate winners from losers in their
industry, and what do they think they need to do about it?

Related resource: Emerj.com “Industry Navigation” page. The Industry

Navigation page allows users to search for AI innovations and interviews
specific to their sector(s) of focus. Article topics include: Enterprise AI
initiatives, AI vendor landscapes, and more.

How to Cut Through the Artificial

Intelligence Hype – Three Simple
“Rules of Thumb”
Last updated on October 13, 2019, published by Daniel Faggella
Daniel Faggella is the founder and CEO at Emerj. Called upon by the United Nations, World Bank,
INTERPOL, and many global enterprises, Daniel is a sought-after expert on the competitive strategy
implications of AI for business and government leaders.
Share to:
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Artificial intelligence and machine learning are hot terms right now, and many
companies are eager to talk about how their products rely on these cutting
edge technologies. Established companies and startups want to explain how
AI is a critical part of their business.

But often, “artificial intelligence” and “machine learning” are used as

buzzwords, mere fiction used to get attention, client inquiries, and investment
from VCs. For this reason, sifting through the AI hype is harder than ever, and
business leaders find it difficult to determine who is actually using AI, and who
is not.
 In this article, we’ll explore three shortcuts or “rules of thumb” for looking at a
company from the outside to separate the truth from the hype:

1. AI expertise in leadership
2. The use of AI in marketing language
3. Assessing a company’s investors
This article does not pretend to be an all-inclusive guide to determining who is
using AI or not, but we find these approaches to be very accurate proxies in
determining true from false AI companies.

Each week we look at dozens of AI companies, and we’re pitched by as many

as six so-called “AI companies” per day (on top of all of our consensus
research and various in-depth industry coverage), so we have a critical need
to discern ream from fake – and I hope that some of our shortcuts will be
helpful for you.

(Note: Readers interested in finding artificial intelligence products and

services can review our pre-vetted AI companies listings here at Emerj.)

Shortcut 1: Look for AI Expertise in Leadership

The first thing I do when I’m trying to figure out if a certain company leverages
AI or not – os I visit the LinkedIn profile of their company. I then pull up the
profiles of the company’s C-level executives, and figure out if any of them
have one of the following two factors:

 One is robust academic experience in artificial intelligence or machine learning.

What does this mean?

o Did they go to a reputable university or well-known strong university for a

master’s or PhD degree in artificial intelligence or machine learning? Or

o Do they at least have some like a master’s or PhD in electrical engineering or

computer science? These are good proxies sometimes.

 The other one is robust artificial intelligence experience at a marquis company.

What is a marquis company? A marquis company is a company that is definitely
doing AI and leading the progress of AI. These are companies such as Amazon,
 Facebook, Google, Netflix, and IBM. Do any of these C-level executives have
robust AI experience at marquis companies?

Dan Faggella presenting on AI business trends at the Buckhead Club in

Atlanta, GA. The “rules of thumb” for determining AI hype were derived from
this original presentation.
If no one on the leadership team (most importantly the CEO, the COO, the
CIO, or the CTO) has either robust artificial intelligence or data science
academic experience, or robust AI experience at a marquis company, then it
is very likely the company is just using the term AI and the hype to their
advantage, and not actually leveraging AI as a critical part of their product or
service.

You might be thinking, “Ok, they say they’re doing AI. Maybe somebody other
than the top executives have the qualifications. Maybe the people working
under them somewhere have the requisite AI experience.”

That is certainly possible, and you can look for that. However, for a young
company to leverage artificial intelligence or machine learning in a powerful
way, it usually requires someone on the leadership team to have the AI
qualifications and experience.

I’ll explain why this is.

At this point in the technology’s development artificial intelligence is not easy

to “do” in business. The science is hard, the math is hard, and the level of
data infrastructure and subject-matter expertise needed to derive real value
from AI in business are rare. Not everyone can do it, not like building a
website or doing email marketing. Hence, if no one in the leadership team is
qualified to do AI or machine learning, then in all likelihood they are not deeply
baked into the company or the product.

It is not even a question of size or resources. You may find larger, profitable
companies with 500 employees that claim to be “doing AI,” and they have one
or two senior developers with a bit of machine learning experience.

What might have happened here is the company hired them because they
want to use the buzzword. Top executives at large firms often realize the
potential of AI (either in practice, or as a buzzword), and thought they should
hire some AI people – and BAM – the “about” page now mentions “artificial
intelligence” and “machine learning” along with other bluster, like “cutting-
edge” or “revolutionary”.

These non-AI leaders probably mean well when they try to “plug in” AI into
their existing product suite, but this is absolutely always easier said than done,
and anecdotally we believe it’s much more likely to fail than succeed in the
near term (i.e. AI won’t actually be leveraged meaningfully in their product, or
the process of doing so will take many, many times longer than expected).

It is hard to take a company that has not started with artificial intelligence in its
DNA, and implant it after the fact without having any executives that have data
science experience. It takes a very long time to revamp an existing product
and bring in artificial intelligence.

You are much more likely to have a product or service that really does
leverage AI as a core part of its functionality when the executive team has that
background versus an existing profitable growing company that hires some
machine learning people later to try to do some machine learning to catch up
and be “hip.” This does not mean that a startup with AI people in the executive
team will necessarily give value. However, it is more likely to get a product
that has AI as part of the core product if somebody in the executive team has
a deep AI background.

To summarize, the first thing you look for to determine if a company is truly
leveraging AI in a meaningful way is robust academic qualifications and/or
robust marquis company AI experience at the executive level. If you do not
find that, then the company is probably not going to be leveraging AI in a
meaningful way, despite what they tout on their homepage.

Shortcut 2: Examine the Marketing and Positioning

 Our research – such as our
recent “Machine Learning Executive Consensus” – involves in-depth analysis of
dozens or even hundreds of companies. Often, the “rules of thumb” presented
in this article are used as a first filter for sifting out the companies making false
claims.
Any business will market their products online, which gives us the information
we need for the second rule for assessing an AI company. You need to see
how they explain what they sell on the website or the LinkedIn description of
the company, and ask the following three questions:

1. To whom do they sell? (i.e. What kind of buyer benefits from using
them?)
2. How did they benefit that kind of target client? (i.e. What is their
deliverable result?)
3. What is the role of AI in their product? (i.e. Where is it relevant?)
I’ll lay out an example:

A company sells sentiment analysis and text mining software to call centers.
The product description on the website states it uses artificial intelligence to
comb and mine data for call centers. It transcribes calls, find patterns within
the words and within the calls themselves, and determine the kind of
sentiment of those calls such as anger or happiness. The software also
determines the topics of those calls, such as refunds, delivery problems,
buying another product, and so on.

Taking this scenario, let us answer our three questions.

1 – To whom do they sell?

They sell to any company with a call center, such as large businesses with in-
house call centers and a reasonably high volume of calls.

2 – How did they benefit that kind of company?

The software will help them learn from the broad patterns of complaints,
topics, and sentiments from their customers in real time.

3 – What is the role of AI?

With a large volume of calls, it can be hard to extract data. The AI software
takes text transcripts and extracts common topics and sentiments from the
actual words in the dialogue and perform an analysis.

It seems relatively clear that the company above has a clear idea of their
target market and know the role AI plays to benefit software users. If you go to
a company website and you cannot answer these questions, then it is very
likely that the company is just riding the hype, and not actually doing AI in any
meaningful way. Here are two things you should look out for in a website:

Vague statements

For example, the company website might say “We leverage AI to extract new
patterns” but does not specify what those patterns are, or it does not specify
how this pattern extraction is meaningful to the user. It might also state “We
use cutting edge algorithms to optimize for this and that,” but it does not
explain what these algorithms actually do. If you encounter statements like
these, then you are very likely looking at a hype company, not a real AI
company.

Overuse of buzzword terms

 If you read their website and it seems like they are using terms like AI, neural
nets, and algorithms too often, you should be wary. They are creating a word
salad out of those exciting words, but do not actually tell you what they do. It
works for SEO, but it is a bad sign for potential users.

Doing business with suspected “hype AI” companies usually isn’t something
I’d advise. Either they have not figured out what they are doing, or they are
just fudging their way to get sales or buyer conversations.

Shortcut 3: Examine the Investors

The third rule of thumb in determining a true AI-based company from a fake is
to analyze who has invested in that company.

To determine why this step is important, let’s take a step back. If you are
trying to figure out if a company is really using AI and their product has any
real promise, you will have to do the following things:

 Meet individually with the executive team members of this company

 Examine the financials of the company, i.e. income and expense reports

 Examine the company business model in deep detail over a few months

You probably do not have the ability or time to do any of these if you are
reading this article. However, other people do, and those are venture
investors. Venture investors have the time to do that because that is their
business. They would almost never invest substantial sums of money into a
company without a robust due-diligence process.

They routinely do much deeper research into a company than most outsiders
can ever hope to do. While some artificial intelligence companies bootstrap
their funds from savings and revenue, most require a lot of upfront investment
to develop the technology, hire capable developers, and market it. The bulk of
AI companies will have venture investment behind them. Most are young
teams that have not saved up money for the last 10 years to have millions of
dollars in the bank, so they need to raise money. That usually means pitching
to venture investors, who will then do the types of research abovementioned.
With that in mind, it is a good sign if an AI company has raised a lot of venture
capital. This does not mean that success in raising money through venture
investors automatically makes it a real company, or means you no longer
have to do your own research into said company. In most cases, however, it is
a rule of thumb.

For example, if a company that says AI in the homepage and in LinkedIn, and
you see it is backed by big reputable venture investor firms such as Koshla
Ventures, Andreessen Horowitz, Atlas Ventures, Charles River Ventures, or
Sequoia Capital, you can assume that claims of AI is not a lie.

These reputable venture investor firms do a lot of research on any company in

which they invest. If they have given a company millions of dollars, it means
they have determined the technology has promise, and believe in the
company. You can safely assume that companies like Sequioa Capital would
not invest in a company that is predicating their sales on absolute AI hype (as
opposed to a genuine and strong AI technology base).

By looking at the type of venture investors for a company, and the amount of
the investment, you can determine whether this company is in fact leveraging
AI in their sector.

Bare in mind that not all VC-backed firms use AI. I’m not implying that AI is
critical for all firms that raise VC funds. Rather, I’m stating that if a firm has
raised $20MM from Sequioa Capital – AND that firm claims to use AI – then
that claim is much more likely to be true that it would be without the
substantial investment from a reputable firm.

Conclusion
To wrap up, here are the three things you can check on a company’s website
and LinkedIn page to find out if an AI company has products or services that
can actually benefit your business:

1. Any person on the leadership team or C-level executives of a company

with robust academic or robust marquis company AI experience
2. Clear and concise company/product descriptions specifying the target
market, benefits, and role of AI
3. Reputable venture investors that have put in money in the company
The first rule will actually tell you a lot about the company you are looking at,
and you can get some valuable information in just a few minutes. We found
after examining thousands and thousands of companies, that is probably the
quickest rule of thumb for figuring out if a company is actually leveraging AI or
not.

Together, these three rules of thumb can help you determine within half an
hour and with more certainty if a company is a bonafide AI provider or not.

I have mentioned on a number of occasions here at Emerj that only about 20-
30% of the companies who claim to do artificial intelligence on their website
have some kind of robust experience required to actually be doing AI in the
first place. In most cases, it is just a couple of people with MBAs or a couple
of Java or C++ developers saying they do AI on their website, but its absolute
nonsense.

If you get a pitch from a company who claims, “Oh, yeah, we leverage AI to do
this fraud detection stuff,” go look at their website. Go look at their leadership
and quickly figure out if these people know anything about AI. Oftentimes,
they do not.

However, the rules I discussed are by no means inclusive. I do not claim that
you know everything about a company by using these three rules. However, if
you are a busy executive with no time to do what we do here at Emerj, they
can help you get a good sense of whether an AI company is real or not
without too much effort.

Our analysis and research work in the artificial intelligence space is 100% of
our focus here at Emerj. It is our business to spend weeks at a time examining
a large number of companies in different sectors.

Most business executives that read our content do not have that kind of time.
They need quick tips and advice on determining whether a company who says
they are using AI is actually using it, and that is what this article provides –
and I hope that some of the pointers in this article prove useful as you assess
the AI landscape in your own sector.
Is Artificial Intelligence for Small
Business? Factors to Consider for
Technology Adoption
Last updated on February 12, 2019, published by Daniel Faggella
Daniel Faggella is the founder and CEO at Emerj. Called upon by the United Nations, World Bank,
INTERPOL, and many global enterprises, Daniel is a sought-after expert on the competitive strategy
implications of AI for business and government leaders.
Share to:
LinkedIn Twitter Facebook Email

AI is being likened to a “Fourth Industrial Revolution” because of it’s potential

for creating profound change in people’s lives, much like the invention of
steam engines (First Industrial Revolution), electricity and mass production
(Second Industrial Revolution), and the rise of the digital age (Third Industrial
Revolution) had in the past.

AI/ML applications are everywhere, from ride sharing companies to voice

search on mobile phones. We use AI every day – it feels so accessible to
consumers that it must be within reach for small business leaders, too.

Given the inevitability of AI’s applications across sectors, it would seem a

good idea for small businesses to jump on the AI bandwagon sooner than
later to be more competitive… Right?

Not necessarily – timing will be critical for small business adoption – and in
this article I’ll aim to lay out a framework for how small businesses should
prioritize the adoption of AI in the years ahead. This article will explore how
small businesses can use artificial intelligence now, and you will see why it is
very important that small business leaders act with prudence.

How Small Business Leaders Should Think About AI Now

Despite the seeming proliferation of artificial intelligence technology today, it is
still in the very early stages of development. Contrary to what might be hyped
on social media, in nearly all application areas AI is an expensive and
complex solution without evidence of direct ROI. This is especially relevant for
small businesses with limited data, limited resources, and limited data science
talent.

Modern machine learning is good at detecting patterns in data. It is good at

optimizing processes in some cases. By no means does AI solve nor do
whatever people want simply because they need it to. “Making” AI do
something new in its present stage of development implies a lot of hard work
and real research effort, requiring resources that the vast majority of small
businesses do not have.

But why?

Because AI technology is currently a “dark art” in the sense that it requires

highly specialized talent. There are a very limited number of people with the
requisite high-level skills to actually get their hands dirty and build an AI
application to drive business value (we try to interview these experts every
week on our AI podcast, extracting and translating their insights for business
leaders). It is hard science and takes a lot of time – more time than most
enterprises can bear, never mind small businesses.

Additionally, building AI applications is not a solo endeavor, it commonly

involves team of experts within the business – many of whom must be trained
in the novel science of AI. Putting such a team together is challenging even
for the largest enterprises in the world.
Data scientist salaries aren’t cheap – Screen shot from Glassdoor.com
Since the talent is rare, they are much in demand with companies doing big
things with AI/ML such as Facebook, Google, and Amazon. Consequently, AI
talent can demands massive compensation, for which most small businesses
simply do not have the budget.

Additionally, AI technology requires dat governance and infrastructure vastly

more complex than that which most small businesses can afford. These are
just two of the basic requirements to leverage AI technology effectively, and
for small businesses they are daunting.

A photo of the Altair 8800 from 1975 – Source: Wikipedia

You can think of modern AI now as the personal computer was in the early
70s. While many small business owners may have been familiar with the term
“computer” in the 70s or early 80s, the technology was complex and involved.

These first PCs worked and looked nothing like the computers of today, and
only a very few people could program these archaic machines to “do” anything
useful at all.

Then, as in now for AI, personal computers were not necessary to run a
business. If you had a small business in 1980, such as a bookstore, a couple
of restaurants, or a lumber delivery business, you would not need to buy
computers and allocate a ton of your time to getting people to learn how to do
programming on these new fancy personal computers.

Computer adoption for most small businesses in 1980 was not just
unnecessary, it was probably an irresponsible use of time and resources.

The same thing is true for AI in small businesses in 2018. It is not generally
necessary to reach a small business’s objectives. Most people in the 1980s
did not feel the need to rush out and get computers for their small business,
but (due in large part to the hype and excitement around the technology)
many small business owners today feel that they should be finding ways to
use AI immediately.

Of course, some people in the 1980s did correctly assess that computers are
a good investment because they saw how it could help their business in the
future. The same exception applies for small business owners today who can
actually leverage AI technology to improve business functions and profitability
now.

In other words, nobody should be thinking about rushing into AI without a

clear business objective. 99.9% of small businesses don’t actually need AI
right now to become profitable, and the technology requires time and skills
that make it hard to use. As AI becomes more accessible (cheaper, with better
defined business uses, and with less requisite computer science knowledge),
we should expect to see AI make its way into small business.

Just as PCs and the internet are positively mission-critical for many small
businesses today, we should expect AI to be similarly ubiquitous – but not
anytime in the next five years.

Leveraging Technologies and Applications that Use AI

That said, small businesses could still leverage technologies and applications
that use artificial intelligence. This is by way of companies who can offer AI-
integrated easy-to-use technology products. Most small businesses could
experience artificial intelligence now by using AI products “off-the-shelf,” so to
speak.

Think of it as computer software such as a document editor or customer

relationship management. These are readily available and user-friendly. Small
businesses have no need to build their own software. They use applications
(like Salesforce, MailChimp, Microsoft Word) built by other people who know
how the applications work and how to make them efficient.

The same dynamic is likely to take place with AI-related tech. Good examples
of how small businesses are leveraging AI today are in programmatic
advertising through companies such as Facebook and Google. These
technologies are simple to use (and not surprisingly, built by consumer tech
firms who are expert in creating easy-to-use technologies).

Readers interested in the

use of AI at Facebook may be interested in our interview with Facebook’s former Head
of Core Machine Learning, Hussein Mahenna
Both Facebook and Google’s advertising platforms use artificial intelligence
and machine learning in very robust ways. If you provide Facebook with an
email list of 2,000 people for your ad campaign, it will use artificial intelligence
to find those users on Facebook, find the commonalities between them in
terms of what they like, where they live, what is their gender, what do they do,
etc. To create “look-alike campaigns,” Facebook will use an algorithm to target
similar people on Facebook to match and cluster these users.
Facebook then uses an algorithm to look at everybody bidding to get
exposure to different types of individual users and determine what ads get
shown and when. Advertising is spread out across all of those users in real
time, and to ads that Facebook believes not only will encourage them to
engage and click, but also find useful or enjoyable.

Facebook uses AI and machine learning to provide a better user experience

to the benefit of the user as well as for your business. They want to put ads in
front of people who are likely to do something with them, and this encourages
spending from their advertisers. Google does similar things with its own
advertising. You, as a small business, can benefit from these services in a
very real way.

Aside from programmatic advertising, you can also leverage AI applications

on data security using vendor companies. For example, if your business
involves high IT or complicated IT security infrastructure, then you want some
serious fraud detecting and security applications to keep your system safe
from malicious activity. This is actually a necessity rather than an option for
this type of small business.

Small companies are more vulnerable to hackers than large companies are
because so many of them do not have adequate checks in place.

One example of an AI-leveraging security application company

is Darktrace with its Enterprise Immune System. According to the site, the AI
application “builds its own, unique understanding of what ‘normal’ behavior
looks like within an enterprise, and can detect emerging threats in real time.”
The tool requires no special skills to install it. It is also self-learning, so there is
no need for the business owner to fiddle with it at all once it is in place.

Data security is also a serious issue for any business that accepts online
payments through credit cards and debit cards. In most cases, merchant
account companies have their own security measures in place, and a good
number of these have embraced AI technology. Stripe, for example, is a
payment processing company that uses adaptive machine learning to detect
fraud. It collects data from all thousands of businesses already running Stripe
to improve its ability to detect anomalies and malicious activities for new
users. Stripe, too, works out of the box and is easily customizable for any
business owner.
Small business owners can leverage AI by using what is currently available
from vendor companies out-of-the-box. Many are already using these types of
application without knowing anything about AI simply by placing an ad on
Facebook or Google, or accepting a payment through Stripe. It is simple, cost-
effective, and drives value for the company.

However, you must remember that AI in small business is a means to an end,

not an end in itself. Do not be seduced by the hype. Do not use applications
just because they use AI. Remember that AI is not magic. It will not solve your
business problems or ensure your success by its mere presence.

This applies even when placing ads on Facebook. It may not be a good use of
your resources, no matter how small an investment, to do so if you can market
your business more effectively offline, such as through a local network or
trade show. However, you might be thinking that since Facebook uses AI, it
must be a good place to spend your money. That is not the case at all.

Readers interested in the

“dos and don’ts” of applying AI in larger businesses may benefit from reading
our full article on “AI Adoption in the Enterprise“
If Facebook is not the best advertising venue for you, then it is not a good
place in which to put your ad money, AI or no AI. Use Facebook advertising if
it makes sense, don’t if it doesn’t.

Instead of asking where you can use AI in your business, think about what will
give you the highest return on investment. Choose software that can help you
 achieve your business goals. Do not pick software or a company based on
what uses AI with the mistaken idea that doing so makes your business
cutting edge.

Pick the software that seems to have the best use cases to achieve your
business goals and to give a positive return to your company. If that happens
to use AI, then so be it. You can leverage AI through existing vendors that are
using this for email, security, payment processing or advertising, but no small
business should be picking software because it AI is there somewhere.

For one thing, many companies that say they are doing AI are not and those
that are really doing AI have products that are too complicated to use for small
businesses. For another thing, AI is a buzzword that may not benefit your
business. When choosing software or services, think about which software
has the features, the prices, and the support that are going help reach your
business goals, and drive growth and profitability for your small business.

Prepping for the Future of AI for Small Business

Since AI is eventually going to be the backbone of business just as computers
and software are now, companies inevitably want to set themselves up for
adoption in the future, and that’s a topic worth considering for small business
leaders with significant goals for growth.

There are two very possible circumstances where small companies might get
more involved with AI than simply leveraging somebody else’s AI tools that
are “off-the-shelf” tools.

In the near future, more and more AI applications will not involve a significant
stream of data from small business clients. These applications will likely
leverage data from many, many client companies (small and large), and train
an AI-based system so that any new client will not need huge reams of data.
For example:

 A marketing automation vendor might determine the best times of day to send
certain kinds of promotional emails – or might determine the best way to split-
test email subject lines – by working with thousands of eCommerce companies.
When a new, smaller eCommerce company begins using the same product,
they’re able to begin leveraging this past training data without having to
generate it themselves.
 A security and surveillance vendor might train it’s algorithms to detect
suspicious behavior by consuming millions of hours of security camera footage
from thousands of clients. When a new client uses this security service, they’re
able to leverage all of that training data to detect security threats without
providing the data themselves.

 Etc…

Where are business

leaders planning to implement AI in the near term? See our business leader AI
adoption survey – in partnership with BootstrapLabs
A second circumstance where a small business may have an active role in
leveraging data is if it grows to such a degree that they can actually afford to
build some of their own AI applications. You may be able to hire the pricey
real-deal hardcore data science and AI people that they would need to build a
unique AI application, such as a custom app for your restaurant, or a
specialized bit of software to help you with hiring or for an employee feedback
system.

Alternatively, AI may become as accessible as many software today, which

allows a small business to build its own applications without the need to
commit massive resources. AI technology is not yet on par with computer
software in terms of accessibility, but it may happen someday.

Realistically, though – as of today – most small businesses cannot actually

leverage AI in a significant way today. In most cases, small businesses cannot
“do” AI in a way that will provide legitimate near-term ROI. Unless I’m
speaking to an AI-specific startup with technical cofounders, I advise most
 smaller companies to focus on revenue, growth, and data infrastructure – not
on “finding a way to use AI” just to fit in.

That said, small business leaders can do something right now to help them
prepare for the time when they qualify for either of the two scenarios
described above:

Treat your data like a resource.

The need for data is the one thing these two scenarios have in common, and
solid data infrastructures will be positively necessary for the AI developments
of the future.

AI tools require copious amounts of data to “learn,” so the best way for
leaders to prepare for the future with AI is to make sure their data is easily
retrievable using compatible formats. You don’t want important business data
siloed and distantly separated.

Having a streamlined data infrastructure as part of the DNA of a small

business is something that will ultimately serve leaders well.

AI for SMBs – Key Takeaways

Many people will walk away from this article thinking that it did not provide
many actionable steps or things they can do to “do” AI. That is because as a
small business there really is not much you can do right now with AI.

Here’s the “TLDR” version of the takeaways from this article:

 AI is not magic – it will not solve business problems instantaneously

 AI is still a dark art – it often requires a commitment of massive resources and

wizard skills to build applications

 AI for AI’s sake is a bad idea – choose tools for the value it can deliver to your
business, and not because it uses AI in some form

 Some small businesses can already use some AI applications out of the box –
best examples are in marketing, logistics and operations, and fraud detection
 Data is the key to AI – AI needs data to “learn” and work properly

 Data is a valuable resource – Small business owners need to store and record
data in a consistent manner for eventual use with AI

Again, most small businesses today are not ready to take on AI initiatives.
However, that does not mean that you should not keep an eye on AI tools that
might affect your industry. Check what the bigger companies in your industry
or similar industries is doing with AI, and see if it is working for them. If it
seems to be gaining traction, put that on your wish list until such time that you
can do the same thing or something even better.

There will come a time when AI will become as accessible as your favorite
computer software, which is when your properly stored data will become
invaluable. However, that time has not yet come. In the meantime, the best
thing small business leaders can do is to grow their business and take steps
to make it profitable. If you have cash in the bank and smart people working
for you – you’ll be in a position to adopt and leverage AI as it becomes “small
business accessible.”