Emerging Trends in AI Development: A Glimpse from Silicon Valley

Greetings from the pulsating heart of tech innovation, Silicon Valley! Attending three AI startup events every week, Jeremiah Owyang is uniquely positioned to witness the unfolding of a vibrant, dynamic AI ecosystem. This article aims to shed light on the budding trends Owyang has observed in San Francisco (SF) and Palo Alto – arguably the hub of AI breakthroughs:

1. The Rise of Computer Vision
Computer vision is increasingly being integrated into roadmaps of nascent AI startups. The new generation of AI, or GenAI, is harnessing this powerful technology to perceive and interact with the world. As the digital ‘eyes’ of AI, computer vision helps decipher the visual world, marking an exciting leap forward in AI capabilities.

2. Data Aggregation in Enterprise AI
Numerous enterprise AI startups are undertaking the mammoth task of collating data from disparate sources. The ultimate goal? To build robust models for predictive analytics. These startups are effectively turning chaotic data oceans into organized, meaningful streams for better decision-making and future predictions.

3. AI’s Niche Consumer Applications
We’re seeing a surge in AI solutions aimed at enhancing consumer productivity. Every consumer persona – from students to executives – is considered. Some innovators are even leveraging proprietary data as a strategic advantage, a moat against competition.

4. Beyond Basic Language Models
Large Language Models (LLMs) have quickly become a baseline expectation in the AI arena. Forward-looking teams, wary of commoditization, are evolving beyond basic “GPT wrappers”. They are pushing the envelope, integrating more complex, bespoke solutions into their AI offerings.

5. The Moonlighting Phenomenon
A fascinating trend in the AI startup landscape is the rise of moonlighting FAANG employees, who are building their own ventures while maintaining full-time jobs. These brave entrepreneurs are seeking angel round investments to translate their visions into reality.

6. The Business Model Imperative
Many AI founders are awakening to the fact that groundbreaking technology alone is insufficient. A scalable business model is paramount, one that capitalizes on network effects, viral effects, data effects, and more. Startups that merge innovative technology with effective business strategy are the ones leading the race.

7. The Rise of VC Networks
Venture capitalists are increasingly collaborating, forming networks to share insights about promising startups and their growth trajectories. This collective intelligence is redefining the venture investment landscape, fostering a more interconnected and informed ecosystem.

8. The Race Against Time
There is a shared belief among industry insiders that the window of opportunity in this market is rapidly closing. Depending on the sector, a window of 12 to 36 months is speculated for newcomers to make their mark before the market matures and becomes highly competitive.

9. Silicon Valley’s AI Capital Status
SF continues to cement its status as the capital of AI. However, the winds of change are blowing towards Palo Alto, possibly the emerging second city in the AI development landscape. By this Fall, we should have a clearer picture.

Taking additional insights from Jeremiah Owyang’s post, it’s clear that the Bay Area continues to be a fertile ground for AI development.

The landscape is constantly evolving, shaped by the steady stream of innovations and the relentless pursuit of breakthroughs by ambitious startups. Undeniably, we are on the precipice of transformative change in started exciting part? We’re just getting started. 😎

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Interviews will teach you how to sell

The hardest part about creating a successful company isn’t building your product.

It’s selling your product.

It’s easy to spend months working on features, but how are you going to sell those features?

  • How will you describe your product to ensure customers are interested in it?
  • Where will you find enough customers to tell about it?
  • How will you differentiate your product from the competition?
  • What features should you talk about most on your landing page?

The answer to virtually every marketing and sales question you have can be found in…

Customer interviews.

Interviews will Teach you How to Sell

You know customer interviews are an indispensable tool for tech startups, but I wanted to show you just how universally powerful they are by telling you about Dr. Emily.

Dr. Emily was a School Psychologist working intense hours at elementary schools in urban areas. She loved the work she did, but she thought she could have more impact if she worked outside the confines of schools.

She wanted to start a company to assess children for learning disabilities, but one major obstacle stopped her:

She didn’t know how to sell her services.

Dreading having to become a sales-person, which felt uncomfortable and a little sleazy, Dr. Emily tried interviewing her customers hoping to find an easier way to start her company.

What she found, not only shocked her, but her competitors too.

What Did Dr. Emily Ask?

As I mentioned in my last article, Dr. Emily focused on interviewing customers who were already trying to solve the problem she wanted to solve.

Her Early Adopters were parents who already had their children assessed for learning disabilities, but were still searching for answers.

The first question she asked these parents was:

Q: What’s the hardest part about being the parent of a child with a learning disability?

To her surprise, their answers always included at least one of the following:

  • “I don’t know where to start.”
  • “I don’t know how to get support from the school.”
  • “I’m not sure if my child will ever learn read.”

Notice how the answer to just this one question provide extremely powerful marketing copy.

Instead of listing her credentials on the first line of her website (e.g. “PhD, LEP, ABSNP, BICM, PPSC, etc.”) like most of Dr. Emily’s competitors do, she says something relevant to customers, like:

“Is your child struggling to get the support he or she needs in school? Together we’ll take the first step to understanding how to help your child make the most of their reading ability.”

No mind games, no sleaze and no hard selling. Dr. Emily just asked her customers about their problems, and restated the services she provides using their words.

If you listen to your customers…they’ll write your marketing copy for you.

Stand Out from your Competition

Another one of Dr. Emily’s most fruitful questions was:

Q: What’s not ideal about your previous assessment?

Again, to her surprise, when parents talked about assessments received from Dr. Emily’s competitors, the answer was uniformly:

A: We got the diagnosis, but don’t know what to do next.

With the answer to this question, Dr. Emily learned how to differentiate herself from her competitors.

When talking with potential customers, she now tells them:

“When we work together, you won’t just get an assessement, you’ll get an action plan so you’ll know exactly what to do next.”

If you listen to your customers…they’ll tell you how to beat your competitors.

The Results

Simply by interviewing her customers, Dr. Emily accomplished what none of her competitors had:

  • Her competitors typically took 3 – 5 years to fill their client list. Dr. Emily did it in 18 months.
  • Dr. Emily now has a 4-month waitlist for her assessments.
  • And that’s after doubling her price over the last 18 months.

With the power of customer interviews, Dr. Emily was able to build a successful company in a crowded space, with absolutely no sales experience at all.

Interviews will Increase your Sales Too

Whether you’re at a high-tech accelerator in Asia, a social enterprise in Seattle, or are simply a service provider:

Interviews will teach you how to sell.

Remember that building your product is the easy part…selling it is the hard part; and interviews will do the heavy lifting.

Interviews will help you:

  • Describe your product to ensure customers buy it
  • Find enough customers to tell about it
  • Differentiate your product from the competition
  • Decide what features to build first

The answer to virtually every marketing and sales question you have about your business can be answered with…

Customer interviews.

Don’t do it Alone

You can get help creating your sales strategy. The first workbook in the FOCUS Framework will walk you through every step of the interviewing process.

And, if you want hands-on, immersive workshops on mastering customer interviews, join me and the 300+ founders who have already registered for FOCUS Con:

FOCUS Con: Mastering Customer Interviews - A Digital Conference

This first FOCUS conference is December 1st and it’s dedicated to Mastering Customer Interviews.

At FOCUS Con you’ll learn:

  • Who to ask for interviews
  • How to ask for interviews
  • What to ask during interviews and
  • How to turn their answers into a sales strategy

All with live workshops, networking and personal mentoring (and without the expense of plane tickets).