Rashit Makhat, is the director and co-founder, Scalo Technologies, the tech venture company based in Dubai
In the rush to cash in on the revolution that artificial intelligence has brought to business and everyday life, startups risk losing sight of key factors that can make, or break, their bid for success.The emergence of generative AI in particular, and the enormous impact it has made over the past 12 months, has understandably given founders new hope, and direction, in their quest to attract investment and scale to the highest levels.
The temptation is to put the bulk of their resources, time and thought into AI development and adoption, while ignoring other vital elements as important to the future of their business as the next brilliant idea created by new tech.The danger of AI obsession is as real as the transformative powers of artificial intelligence. Those who ignore the threat now could be taught a harsh lesson.
Without question, AI is going to have a growing effect on our world, in more ways than we can currently see. A year ago, how many of us would have imagined how the power of something called ChatGPT could be changing the way we run our businesses, as it is today.
A business leader tasked with analysing a complex 5,000-word report to extract key insights and trends before delivering a detailed summary to his board, might have toiled over the job for many hours, in the process being forced to postpone other important matters, including urgent appointments. Instead, he can now copy and paste the report into the ChatGPT interface, which will swiftly process and analyse the entire document in a matter of seconds.
What 12 months more of tech advancement will bring, only the developers know.
But founders trying to flourish on the next wave of innovation must observe the need for balance in the way they go about developing their business. Focusing excessively on AI while neglecting other essential aspects crucial for the development of their startup can result in delays, setbacks, or even long-term or terminal consequences. Concentrating solely on AI can draw attention away from critical factors like market research, customer feedback, and operational efficiency. Startups recognising that technology is just one big piece of the puzzle, and building their approach accordingly, gain a big advantage.
In addition, neglecting cultural and regulatory nuances poses a potential challenge. AI solutions may not consistently integrate seamlessly with local cultures and regulatory frameworks. Failure to take this into account can alienate potential customers and may give rise to legal complications, again emphasising the importance of a well-rounded strategy.
With the influx of new AI innovations at the present rate, and there are no signs of it slowing down, forecasting which seemingly brilliant ideas will achieve long-term success, with any degree of certainty, is an almost impossible task, even for the most experienced tech investors. Relying only on new AI tech has risks. If the algorithms or models are unproven or not well understood, it can harm a business's reputation and survival prospects.
Even though AI is changing how we live and work, startups cannot be reminded too often that it must not be the only thing guiding their path towards major growth and global markets. There are numerous examples of Middle East startups that have expanded successfully while steering clear of the pitfalls associated with an exclusive focus on artificial AI, thriving by adopting a more holistic approach to their business strategies, recognising that success goes beyond an obsession with technology. Mumzworld became the region’s leading e-commerce shopping destination for mothers by prioritising customer experience over an AI-centric approach.
While technology played a role, success was grounded in understanding the unique demands of their target audience, delivering a personalised shopping experience to build trust and loyalty. In 2021, Saudi Arabia healthcare provider Tamer Group acquired a majority stake in Mumzworld which continues to stand out for non-tech related reasons. Remembering its roots, to mark Emirati Women's Day last year, the company introduced a new initiative to support and empower innovative Emirati female entrepreneurs and small business owners.
The ability to strategically blend technological innovation with a keen understanding of their target markets is a guiding principle that startups should follow today if they are to stand out and become the most sustainable businesses. Smart founders, while leveraging the significant advantages brought by technological advancements, especially in AI, utilise their skills in learning, reasoning, problem-solving, understanding complex ideas, planning, abstract thinking, and drawing from experience to the fullest extent.
In today's technology-driven business landscape, human intelligence is seldom a topic of discussion. But a mix of problem-solving abilities, emotional intelligence, and adaptability holds crucial significance for the growth and development of startups. Critical thinking is a key component for successful founders, combined with the capacity to adapt to new situations, analyse and solve problems effectively, and deal effectively with complex situations, make tough decisions, and devise strategies to achieve goals.
Striking a delicate balance between harnessing the power of AI, and addressing the broader aspects of business development, in order to succeed, begins by devising a business plan that incorporates AI as a tool, rather than the sole focus.
In a nutshell, this means placing a firm grasp on how technology aligns with the overall mission and customer needs, understanding the target audience from the start, knowing their customers and what they need, and customising solutions to meet particular challenges and cultural intricacies. AI has enormous potential, but cannot be the only factor guiding a startup's development. Founders who consider a broader approach, and work with partners sharing their vision and methodology, will have a much better chance to ensure their growth is steady and long-lasting.