The artificial intelligence (AI) wave has burst forth, and there’s no holding it back. Those of us following and working in the weeds on AI have seen this coming for a while now, but for now, the public is taking notice, the news can’t get enough, and investors are excited about the possibilities. Frankly, we’re excited about it, but before we get too excited about all that AI will bring to our world, it’s good to take a step back to see what’s really going to move the needs for AI.
Stop Painting the Pig
Nowadays, the trends seem to add “AI” to the copywriting around your product and say you’re an AI company. However, there’s a big difference between creating a connection with a generative AI tool like ChatGPT and actually leveraging natural language processing, machine learning, and other intricate AI technologies. The latter are going to revolutionize the world; the former are simply gimmick marketing ploys. We’ve got to look deeper beyond the hype to see that we’re investing in something that really has merit. And, not all great ideas are great investments.
The Right Team
If an investor is excited about an idea, but not impressed with the team, that’s a big red flag. At least for us, we start to pump the brakes a little bit because this can be a huge warning sign for us. The reality is that the right talent can move AI forward. There are amazingly brilliant minds in our world today, solving amazing problems. There are also amazing teams made up of multiple brilliant minds. If you don’t have that proof from the team that they’re the right people AND you are missing any intangible gut feeling that they’re the right team, it’s time to take a step back.
Unlock Niche Opportunities
The next wave of value in AI comes not from basic language functionality but from using that language as an unlock to industry-specific opportunities. We’re always looking for companies who are changing the world and often in very specific ways. If you look at our portfolio at Sentiero, many of our companies are in niche industries like manufacturing, skincare, and others. They’re not out solving a problem for everyone in the world, but they are out solving a specific problem for a specific group of people. These industry-specific problem solvers are going to move the needle on AI!
We’re all about going deep instead of wide when we’re looking at the world of AI and investing. That means going deep not just from the offering and the expertise surrounding that offering, but the potential impact as well. AI can easily become a flashy buzzword if you’re not paying attention. Instead, look for the depth. It’s out there and we see it changing the world little bit by little bit each day!