The AI Startup Bubble: Why Nine Out of Ten Ventures Don’t Make It

Photo by Mika Baumeister on Unsplash

Unknown demands

If you are starting a new AI business, then you should avoid those categories where you give importance to personal preferences rather than public demands. For example, you can open a niche vintage store, and you don’t know the community and ignore the demand requirement and growth. Do not become another failed AI startup and chase the blind demand.

Cash flow analysis

For any business, cash flow is constantly required. Many large businesses operate on 90-day payment contracts, so make sure you have the availability of cash every time. In addition, first, discuss the rent and other business costs; sometimes they completely eat up your profit.

Confidence or ability disaster

AI helps you create business easily, but sometimes you have difficulties selling products and services. Many times, some member of the team believes that they can replace someone else in this world. When the time arrives, they fail to replace the competitor, and their customer complaint rate is higher and higher, and they are unable to satisfy the customer demands.

Confused innovation model

First, verify the survival rate of your business. For this reason, check other similar business models, like you are running the community business model in your area, another forward warehouse model already exists, and you have failed because of huge educational costs and lack of a supportive ecosystem.

Team member issues

When money is involved, there is a chance of conflicts, like in your team member, the equity dispute destroys your business model. For example, someone in your founder team split from you because of family pressure, compliance, and others. Protect your business from backstabbing by your team members.

1. First, collect enough capital to start the business.
2. Give more importance to customers who have the right to make consumption decisions.
3. The second-hand equipment is also enough to start a business.
4. Give your team the living expenses and high-performance bonuses.
5. It doesn’t matter; you can outsource the finance, analysis, and other related work.