The best AI business models | Dabble.AI #6
The Dabble.AI Project #6 - Exploring autonomous business models
What are the best business opportunities for an autonomous business model? What kinds of opportunities might look good but should be avoided?
There are at least two paradoxes I see for AI business opportunities.
The best opportunities should not be the focus.
The biggest opportunities should not be the focus.
I’m defining the best opportunities as the ones that are clearly a perfect fit for AI. Just search something like “make money with AI” on YouTube and you’ll see a bunch of them. Generally speaking, if it’s easy and inexpensive to do with AI, everyone will copy the idea as soon as the opportunity presents itself. So, unless you're the first mover, or a very early mover - these won’t be opportunities long. So they are not worth focusing on - IMO.
The biggest opportunities are the ones with the biggest market caps and/or the most strategic value (on a global level). Like developing AI tools for writing code. Or of course, developing AGI. These are massive opportunities for sure. But they require massive investments. So they are not likely to be viable opportunities for solopreneurs (the focus of The Dabble.AI Project). Meaning, they aren’t worth focusing on either.
So, what is worth focusing on?
Here’s what I’m looking for personally. Opportunities that have the following attributes.
The opportunity can be tested quickly
Personal knowledge / experience is required
Its not obvious to others and not easily spotted if successful
The TAM (total addressable market) is relatively small
Barriers to entry for future competitors could be created
Let me break my thinking.
1. The opportunity can be tested quickly
Speed to market should be a top priority. Product life cycles are getting shorter and shorter. So, spending years developing something before being able to validate the potential is a bad ideas - IMO. In my case, if I can’t have something to market in 180-days or less - I’m not interested.
2. Personal knowledge / experience is required
Humans and machines both have strengths and weaknesses. Either working on a task that is best suited to their strengths will outperform the other. But, when they collaborate, they can outperform either working alone. So, I’m most interested in business models that require a combination of AI and human intelligence - but not human time. This mostly boils down to business models that I feel qualified to oversee.
3. Its not obvious to others and not easily spotted if successful
With artificial intelligence, business models will be so easy to execute on that competition will exist as soon as an opportunity is known. For that reason, a competitive advantage could be gained by keeping business operations as covert as possible. So, telling the World how well you’re business is doing on social media might not be the best plan.
4. The TAM (total addressable market) is relatively small
Small markets tend to draw less attention from bigger competitors. You’re also more likely to be able to capture a large percentage of a smaller market faster. It could also make sense to have small slices of larger markets. But given the option - I’d prefer a large slice of a smaller market.
5. Barriers to entry for future competitors could be created
This could be the single most important consideration. If or when someone else decides to use AI to compete - what’s your competitive advantage? What things can you do to make it harder for them? These can be things like using custom models that are trained with data that isn’t easily accessible, or capturing a large share of the market.
I’m also making the assumption that there aren’t any perfect opportunities. So, the five points above aren’t “in stone”. They are just a wish list of things like love to see in the business models I’m looking for. Of all those items, #1 and #5 are the most important to me.