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How startups can succeed in the age of AI?

Updated: Jan 21


Patrick just graduated from business school, and he could not wait to launch his startup finally. Still, the previous night he watched a Terminator movie marathon with his friends, and now he’s terrified of AI becoming a threat not just to his startup, which he wanted to launch all his life but also the nature of businesses itself. Even Tesla founder Elon Musk famously predicted the end of the world, which almost mirrored the storyline from the Terminator franchise. Therefore Patrick cannot be blamed for freaking out over the future of his startup. But how right can our judgments be in predicting the effects of AI while looking at it with the Terminator mindset? Often you might come across the words ‘AI’ and ‘future’ in the same sentence, almost making these two to be synonymous. To understand how the world transitioned from ideation to experimentation and implementation, Morad Qutqut, CTO of Hewlett Packard Enterprises (HPE), the Middle East, compared AI to a newborn baby: “Newborn babies do not have sufficient cognitive skills because they don’t have data. When the data is acquired through the five senses, the brain then analyses this data through physiological, mental, emotional, and several other means. With the interesting focus on digital transformation, and with data becoming digital, artificial intelligence has taken the same trajectory.”

Starting with the initial excitement surrounding AI in the late ’50s and ’60s to providing solutions in the field of medicine, business, security, and defense in the 21 st century, the development of AI has come a long way. A widely quoted article published by The Economist in May 2017 heralded the dawn of a new age when the “world’s most valuable resource is no longer oil, but data.” It is undeniable as to how the robot revolution will affect how we hire and fire, and how human resources operates, in general. But here are few potential trade-offs every startup will need to make:


1. Flexibility vs. Productivity: Flexibility is an essential factor for the development of any startup, and it also challenges the productivity of machines. At the same time, robots can carry out numerous tasks tremendous productivity (without any cigarette breaks). Still, they cannot switch to sweet-talking a neglected customer when that’s what needs to be done.


2. Problem-solving vs. production: The typical startup is also far from the structured environment that AI and machine learning require. It is not a matter of accessibility of data, but soft skills and innovative problem-solving. The most common struggles of startups involve tweaking with the business model, improving consumer relations, and these changes require advance interpretation and understanding; they need the ability to change quickly and go in a new and not necessarily a well-defined direction. These are the qualities that people have, and machines don’t.


3. The creation of value vs. structure: This rests solely upon understanding the distinct focuses of startups and large companies. Startups mostly attempt to refine their market niche and value proposition, and they are continually trying to discover the extent of their perceived entrepreneurial opportunity. In contrast, large companies focus on profit maximization through cost-cutting, standardizing, and streamlining production. The difference in the problem between these two and approaching that solution through a structure, control, and management is fundamentally limited to automation and, therefore, to machines instead of people.


4. Outsourcing vs. in-house production: Since cash-flow problems kill 25 percent of startups, it’s more important for startups to avoid significant up-front investments than to find the cheapest ways to produce. Purchasing the machines necessary for in-house production is not advisable when the firm’s survival depends on cash flow. It could be a recipe for success not to produce in-house, to avoid huge outlays—even if that means higher COGS. The global AI debate hosted by the Doha Debates on artificial intelligence sheds light in search of solutions to AI’s urgent challenges and military robots to data breaches and job automation. AI expert Muthoni Wanyonike argued for optimism, predicting that AI will improve equality among nations. British author Dex Torricke-Barton welcomed AI but warned about tech-illiterate lawmakers and slow to-adapt governments. This is precisely why Qatar will serve as the perfect place for startups to work in the age of AI, as the UAE’s National Artificial Intelligence Strategy 2031 has recognized the growth potential associated with AI and has set out to increase the competitive edge of the AI sector in the UAE. The technological advancement and development in the field of robotics and AI has revolutionized what machines can do, but that does not mean that humans are prone to replacement by machines in every field.


We are experts in becoming habituated in an ever-changing environment and open-ended tasks due to our “soft” skills: creativity, imagination, and problem-solving, which are, in turn, considered to be the core skills to entrepreneurship. We are accustomed to the malleability. Therefore startups and AI are expected to maintain equilibrium by complementing each other’s strengths. As a company formation specialist company, BBMS can help you with the legalities of forming your company and preparing your business for the future, which is AI. Call us at +974 40120333 or email us at info@bbms.qa for a no-obligation consultation.


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