Nick Hall, General Manager of Experian’s GenAI Centre of Expertise, says startups and small … [+]
Experian
Britain’s startups and relatively small, innovativebusinesses may have the edge over larger companies in taking advantage of the Generative AI revolution, according to a report published last week by industry trade body, TechUK and financial services firm Experian.
The study predicts that Generative AI could add as much as £120 billion annually to the value of the U.K. economy but only if companies manage to successfully address a range of challenges that include a shortage of skilled people, employee resistance and poor quality or incomplete data. In passing, the survey notes that young, technology-driven businesses have an opportunity to deploy more quickly than their longer-established counterparts.
SteetBees is a case in point. Founded in 2015, the company collects and analyzes customer behavior data on behalf of its clients. CEO Vidisha Gaglani says the company carries out what she describes as “conversational research.” Customers are asked open questions about their experience with brands and can add videos and pictures to their responses. The aim is to gain deep insights into consumer behavior.
Streetbees launched the platform long before the current wave of Generative AI Technology but Gaglani says it has been a rapid adopter. “In the last year the platform has evolved and we are using large language models (LLMs),” she says. “We are using LLMs to almost automate the end-to-end research work.”
In practice, survey generation is automated, as is the AI writing the reports and the conduct of conversations, albeit under the guidance of humans. “And we are also able to generate executive summaries,” says Gaglani.
Gaglani says a combination of AI automation and human involvement has enabled Steetbees to work more quickly on surveys but retain the depth and quality of the data. It’s an example of how Generative AI is already changing the way businesses work.
What about the bigger picture? Businesses in the marketing industry have been among the first to adopt Generative AI – often to create personalized marketing messaging on a scale that wouldn’t otherwise have been possible. But is the Experian/UKTech report right to say that innovative small businesses are better placed to exploit the technology than large corporations.
Everybody Can Play
Nick Hall is General Manager of Experian’s GenAI Centre of Expertise. He says businesses of all sizes are aware of the need to move fast, initially by experimenting with ways to incorporate AI technology into the their operations. “Within that context, one always says startups are better at moving fast than large corporations with hundreds of thousands of people.”
Equally important, Large Language Models are there to be used. “This is a field that has been pretty much democratized,” he says. A small two or three-person startup has access to the same LLMs as, say IBM or Experian,” he adds. “They can buy the same enterprise product and have access to the same level of intelligence.”
However, as he sees it, there are areas where startups might be challenged – skills being a case in point. “Tech startups may have the skills they need. But that’s not necessarily the case if you are a startup working in, say, retail,” he says.
And good data is also crucial. “All of this technology needs to be fed by high quality data. Even if you are a small business and you just want to do things like use Generative AI to create product copy or design a marketing campaign, it will do that far better if you have equipped it with high quality information on your sales, and customers,” says Hall.
Buying Or Selling
There are some distinctions to be made. Some startups will be creating AI-driven tools to sell. Others will be buyers of those tools. “At the moment, a lot of the money is being made by companies creating AI tools,” says Hall.
Hence the buoyant stock prices of big tech companies and the almost feverish investor interest in startup companies at the cutting edge of data science in general and AI in particular.
Tom Henriksson is a General Partner at early-stage VC OpenOcean. As he sees it, there is still a huge amount of caution in the VC community, except perhaps when it comes to AI.
Investment In AI Startups
“There is a lot of capital in VC funds at the moment. A lot of large funds have raised but they haven’t deployed very aggressively. There is lots of money to deploy but there is still carefulness. However, AI is super hot at the moment. It is seen as the next big platform after the cloud.”
So much so that even a Seed round can look pretty Stellars. Henriksson cites the example of H, a French LLM developer that recently raised $220 million. “At the moment, it is still the AI infrastructure layer that is being built. We have the OpenAI and Generative AI platforms that require massive investment,” he says.
But other categories are opening up. OpenOcean is particularly interested in startups that are helping large corporate businesses adopt AI. “That could be software tools, specific technologies or approaches. For instance, helping enterprises adopt AI that you can trust and that won’t be biased. Helping engineers implement AI in their data sets,” he says.
Then there are vertical solutions. AI tools designed for specific industries, such as banking. Henriksson says this tier of AI startups will require founders who not only understand data science but also the specifics of the sector. “True vertical solutions require a deep understanding of their market. So you might get people who have worked in banking teaming up with data scientists.” Henriksson says this is corner of the market this is less well developed.
We are probably only in the foothills of the generative AI revolution. And for the moment, at least, startups developing AI solutions and those putting the technology at the heart of their business models are well placed to attract the attention of investors. Meanwhile, small and tech-driven companies can take advantage of toolks that are already widely available and accessible. Those who are agile enough may gain an edge over larger rivals.
