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The AI Litmus Test: Good Businesses are Good Businesses, With or Without AI

NfX | Morgan and Drew Beller | May 12, 2023

AI core value - The AI Litmus Test:  Good Businesses are Good Businesses, With or Without AI

Here’s a double-edged sword: It’s never been easier to build in AI.

  • AI as a Tool, Not the Core Business: Building a business around artificial intelligence (AI) or GPT4 is exciting, but it's not the end game.
    • The true value lies in how AI integrates into the business model to solve problems or scale solutions.
    • The success of a company should not hinge solely on its AI capabilities. Instead, AI should enhance a product that's already defensible and loved by users. The main takeaway: Good businesses are good businesses, with or without AI.

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  • Importance of Correctness Spectrum in AI: AI models are probabilistic and, as such, can sometimes be incorrect.
    • It's crucial to understand the acceptable failure rate of your AI product and its implications for your target users.
    • Establishing an operational design domain (ODD) can help you validate the correctness of your AI pipeline, ensuring that your product operates within specific and well-scoped uses. This approach can turn potential drawbacks into unique selling points in industries where there isn't necessarily a "wrong" answer.
  • Differentiating AI Pipeline & Evaluating Teams: As we move into an era where foundational AI models dominate, it's crucial to focus on building around these models and optimizing them for specific tasks.
    • Differentiation can be achieved through methods like prompt engineering, fine-tuning models, and post-processing results.
    • When building teams, founders should look beyond the hype and consider hiring experienced infrastructure engineers who can help incorporate AI technology into products efficiently and sustainably.
    • The key is to strike a balance between being cutting-edge and building a sustainable business infrastructure.

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NCFA Jan 2018 resize - The AI Litmus Test:  Good Businesses are Good Businesses, With or Without AIThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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