The AI Boom Isn’t Going to Plan

The AI boom isn’t going to plan. Organizations are struggling to turn AI investments into reliable revenue streams. Enterprises are finding generative AI harder to deploy than they’d hoped. AI startups are overvalued, and consumers are losing interest. Even McKinsey, after forecasting $25.6 trillion in economic benefits from AI, now admits that companies need “organizational surgery” to unlock the technology’s full value.

Back to Basics

Before rushing to rebuild their organizations, leaders should go back to basics. With AI, as with everything else, creating value starts with product-market fit: Understanding the demand you’re trying to meet, and ensuring you’re using the right tools for the task.

The Furby Fallacy

Unlike past tech trends, AI is uniquely prone to short-circuiting businesses’ existing processes for establishing product-market fit. When we use a tool like ChatGPT, it’s easy to be reassured by how human it seems and assume it has a human-like understanding of our needs.

Four Key Steps to Product-Market Fit

1. Understand the problem. This is where most companies go wrong, because they start from the premise that their key problem is a lack of AI.
2. Define product success. Discovering and defining what will make your solution effective is vital when working with AI.
3. Choose your technology. Once you understand what you’re aiming for, work with your engineers and designers on how to get there.
4. Test (and retest) your solution. Now, and only now, you can start building your product.

To unlock the enormous potential of AI, we need to draw the bullseyes first, then put all our efforts into hitting them. For some use-cases, that might mean developing solutions that don’t involve AI; in others, it might mean using simpler, smaller, or less sexy AI deployments.

Establishing product-market fit, and creating technologies that meet your customers’ actual wants and needs, is the only way to drive value.