AI BUSINESSES AS TECHNOLOGICAL vs. PRODUCT COMPANIES.

Working with AI businesses for a long time as a product marketing and business development person, I constantly deal with one issue: distinguishing exactly for the AI sphere. And not only for early-stage startups, by the way.

The issue businesses often do not even see is THE ABSENCE OF A PRODUCT. It’s very typical for AI companies to sell TECHNOLOGY instead of selling PRODUCT.

Instead of addressing clear and understandable customer needs, they say: “We are a wonderful technological company, so any customer knows how we can be used, no need to think about it too much.” I’d venture to claim that this could be one of the main reasons for failure, especially for AI businesses.

Maybe the source of this repeating situation is that AI can actually be used almost everywhere, so we have a pretty interesting market — a mix of many potential cases, subsegments, penetrating each other.

What are the typical mistakes of a product owner here:

• First, an AI company’s core is almost always a team of machine learners/developers, and a product owner is connected with them much more than with the market.
• A product owner means TECHNOLOGY equals product, but not USER CASE equals product. So, it’s a totally wrong understanding of what a company sells.
• As a result, a product owner cannot perform correct market segmentation that should be done by user-case groups, not by technology features.
• He tries to cover the whole possible market as for him it means the market is huge, but it’s such a crucial mistake that leads to a terrible go-to-market strategy.
• And this mistake is especially visible in the B2B segment, where product owners can cover not understanding of their product by “deeply customized solutions selling”. It is not “deeply customization” at all. You just do not know your market segmentation.
• A company that does not have a correct market segmentation cannot evaluate which segment is more perspective from revenue, number of customers, cost of resources, and ROI point of view. So, marketing cannot find the correct personas, channels, budget, or campaign planning.

Because of this issue, businesses often have a mess instead of having a strategy. They have “we want it all and now” instead of having a GTM plan based on market analysis.

What should be done about this? Here is my thought on it:

• A product owner should be deeply connected with the market first, then with developers.
• A list of potential customer cases should be created based on your technologies.
• . You should manage the list and work with it daily.
• Customer case group = product = market segment.
• You should evaluate each customer case or each group of customer cases about its potential.
• Potential consists of market segment size, potential revenue, #customers, CAGR, resources needed to access the market, and how difficult it is to access, so actually, it’s like a “light version” of ROI calculation.
• Now you can range your cases/market segments/potential product and take, let’s say, 3–5 to start.

And here I should talk about “customer development” and how market hypothesis should be managed on a daily basis by each product owner.

…to be to be continued.