Artificial Intelligence's Current Limitations Revealed
In the ever-evolving world of technology, the future of tech giants like Google is being questioned as AI alternatives, such as ChatGPT, gain traction. However, this shift doesn't affect all sectors equally. Companies with network effects, such as Airbnb, have valuable assets that help them defend against replication.
For B2B SaaS distribution, AI is likely to lower costs, making it easier for clients to create solutions for themselves. This democratization of access to specialized knowledge and technology is a double-edged sword. While it makes the unique understanding of B2B SaaS startups a commodity, it also allows businesses to focus on customer needs and building barriers.
Software-only startups, on the other hand, are more vulnerable to automation and commoditization due to the advance of LLMs and robotics. However, having physical operations can make a business resistant to AI advances. This is demonstrated by startups like dotega (Stuttgart), which focuses on transparent, digital management of housing communities, and Novumstate, a KI-supported digital property manager that combines digital infrastructure with established local property management.
The drive-hailing industry, such as Uber and Lyft, is a prime example of how technological advancement can reshape industries. Yet, startups like Dwelly are grounded in the management of physical properties, linking clients to real-world houses and flats, distinguishing themselves from software-only startups.
The traditional consulting industry, including firms like McKinsey, is also facing serious problems as AI offers rapid analytical services. To meet the needs of an evolving business environment, the model needs to be fundamentally defensible, with basic network effects and some offline presence ensuring success.
As AI continues to impact various industries, including consulting and tech platforms, understanding the differences between startups is crucial in predicting how AI will shape the startup landscape. The topic of how to build barriers before disruption deserves its own article. The concept of what B2B SaaS sells is changing from selling code to solving customer pain points. AI cannot handle intricate operations such as managing physical properties, handing out keys, or fixing leaky sinks, providing a barrier for startups like Dwelly.
Building barriers before disruption arrives is crucial, but it requires reactivity and flexibility in the startup world. AI poses a risk when it can replace physical activities of a business or person, but it's hard for the tech to do so effectively. In the end, businesses now have an abundance of code, allowing them to get back to basics and focus on customer needs and building barriers.
