We have seen significant technological advancements during the last decade and artificial intelligence (AI) has the become the buzz word across various industries. There was never a day or a conversation in venture capital (VC) communities, businesses, social gatherings or government policies that didn’t include a single mention of AI. Just the mention of AI made individuals and organizations relevant and forward looking.
Innovation in mobile networks from 4G to 5G has evolved a basic mobile phone to a smartphone or the network edge at your fingertips. Advancements in biotechnology and genetic engineering led to precision medicine where patients’ genetic information is used to determine the most suitable treatment option for illness and to proactively identify health risks. Adoption of IoT and predictive maintenance is helping the manufacturing industry to be more agile and resilient.
More importantly, the COVID-19 pandemic has not only heightened uncertainty for the global economy but also created an opportunity to innovate. For example, the concept of remote work, remote customer service and automation using AI is becoming a reality.
Digital commerce, AI and automation are becoming strategic tenets for growth and differentiation. Opportunities are plenty. Question is where to focus that brings step-change impact to the economy? Entrepreneurship is not just about risk taking. As Adam Grant mentions in his book Originals, “The stereotype that, to be a successful entrepreneur, to do anything original, you have to be a huge risktaker, is a myth.” It comes down to deep understanding of customer problem and the ability to solve the problem better than anyone else with manageable risk to achieve market leadership.
It is like what Wayne Gretzky, the greatest ice hockey player of all times, said “I skate to where the puck is going to be, not where it has been.” Great entrepreneurs are like Wayne Gretzky. AI provides a level playing field for new entrants and existing companies. It provides opportunities and challenges. The following two USPs will provide the guiding principles to quantify the impact for entrepreneurs. The First USP – Unique Selling Proposition A unique selling proposition is the one that makes the business better than the competition. It’s a specific benefit that makes the solution stand out when compared to other solutions in the market.
Too often, entrepreneurs fall in love with the technology, build a solution or a problem and then look for a problem. Many see entrepreneurship as the path to glory – get investments from VCs to build a product, pitch the product to customers to do some early trials and exit with an acquisition. In reality it doesn’t happen that way. Innovation always starts with the customer in mind. And more importantly, customers buy a solution to their problem and not a product.
Three keyways to uncover the USP – Unique Selling Proposition: 1. Customer Problem Entrepreneurs commonly fall in love with their solutions or products and forget about the problem at hand for customers. A key differentiation for a vendor is about understanding the customer pain points better than the competition. 2. Motivation It important for entrepreneurs to understand customer’s behavior and buying decisions. It will be less disruptive if go-to-market process is aligned to customer buying process. The go-tomarket process should navigate customers through 3 important phases: i) education phase to loosen status quo, ii) solution phase to explore possible solutions to address their pain points, and iii) selection phase to justify the decision. 3. Value Customers buy a solution to their problem and the outcome they desire. It is key to define the success the customer wants and the outcome they can achieve. Entrepreneurs should show what the outcome will look like for the customers with distinct value.
The Second USP – Urgency at Scale with willingness to Pay This USP is sometimes overlooked and misunderstood with the first USP – unique selling proposition. 1. Urgency Are you building a “painkiller” or a “vitamin” for your customers? Painkillers are like “need to have” vs. vitamins that are “nice to have.” Urgency will also provide tailwind into the go-tomarket process. 2. Scale Economies of scale provides cost advantage as it lowers cost to serve customers. It enables entrepreneurs to reduce their costs, pass the savings onto the customer and gain a competitive advantage. 3. Pay (Monetizable) Willingness to pay reflects the ability to covert value delivered into cash with relative ease. Value can be reflected through an increase in revenue or increase in cost savings.
Whatever the value is, it is the willingness to pay for the solution is what defines success. — AI is not just a buzzword anymore, and if applied correctly, it has the potential to bring step-change impact to the economy and society. Technological advancements such as AI has the potential to augment human intelligence in solving complex decision-making problems. Entrepreneurs and organizations can make it a reality with focus on USP2 approach, based on the first and second USPs, and shift into high gear. USP2 = [Unique Selling Proposition] x [Urgency at Scale with willingness to Pay] Disclaimer All views expressed on this site are my own and do not represent the opinions of any entity whatsoever with which I have been, am now or will be affiliated.
Venkat Eswara (linkedin.com/in/veswara)
Global Leader Empowering Transformative Outcomes; Startup Advisor; Northwestern University Alumni Admission Council Member