Foley recently cohosted a webinar with 4thly where a panel of experts discussed AI, ML, and Generative Tech.
The panel was moderated by 4thly’s Bret Waters and the speakers included Foley partner Louis Lehot, Alex Babin (CEO and Founder of Zero Cognitive Systems), Suman Talukdar (Managing Partner at AI Sprouts VC), Ben Levy (Founder of Bootstrap Labs), Walter De Brouwer (Founder of doc.ai, sold to Sharecare), Dipanwita Das (CEO and Founder of Sorcero), Ahmed Reza (CEO and Founder of Yobi), and Igor Taber (General Partner at Cortical Ventures).
The panel discussed the rapid adoption of ChatGPT, which continues to go viral, and how generative AI can make enterprise operations more efficient.
Panelists discussed that the key to fundraising for generative AI startups include:
- Turning technology into a product
- Leveraging language models
- LLMs should be analyzing data that is proprietary and hard to come by (think moats)
- demonstrating traction in more than one vertical
Here are some of the key takeaways from their discussion:
- The secret to turning your technology into a product is evaluating business challenges and then choosing where to apply AI. Great startups address a problem worth solving.
- Right now, AI startups are beating #BigTech companies in very narrow situations because they are laser-focused on their target, and where they demonstrate the ability to deliver a solution to an identified problem (rather than being technology in search of a problem).
- There is a lot of experimentation happening in the broad AI space, and predicting what is going to work best is difficult. It is all so new and happening so fast. With very few exceptions, technologies in the market are not yet operating at the enterprise scale.
- For many early-stage generative AI companies, they are offering very bespoke solutions to customers that are not scalable or repeatable for other customers without significant customization. This will make it hard to get to $10 million of annual recurring revenue, a key benchmark for raising a Series B round.
- If your company is looking to incorporate more AI into your current offerings or get it on your roadmap, you will need internal talent that really understands the technology and how to operationalize it. Many existing businesses will need to pivot to incorporate AI while avoiding disruption to the core products and services that are selling.
This space is fully in the hype cycle, and we are only in the very early innings of the AI revolution. What will happen when investors realize that it will take years to get to scale up?
To learn more and view a recording of the webinar, click here.
To learn more about Foley’s AI practice, click here.