Investing or focusing on AI does not alone assure success

Two articles in [a recent] print edition of the Financial Times highlight the simultaneous offer of promise and peril that AI brings. One article describes the meteoric rise of a start-up; the other the failure of another.

In ‘Robotics start-up Anki reaches end of the road’ we here of a small firm laying off all its workers today after failing to negotiate new investor support. This was after raising $200m and triple digit millions in revenue.

I am an early customer of Anki. In fact I purchased one of its first racing car games. It is pretty cool: drivers control the car with software on their smart phone and they can engage the AI ‘driver’ to take over and race around the track. You, or the AI driver, can “zap” other cars going around the track to get an advantage. Accessories included different cars with unique designs, lights and different “skills”, and ever challenging tracks. Young kids loved playing with it; though for me Scalextric remains the best.

In ‘Fundraising sees valuation of robotic software group UiPath soar to $6.4bn’, we read of a start-up closing a new round of funding by Coatue for $567m. The total raised is now about $1bn. One might suggest that when debt becomes so high, banks and everyone else is on your side to get you to victory. Perhaps Anki’s failure was that they never aimed high enough with super high investment rounds. Here is the Venturebeat article.

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Despite the star attraction of investment backers including Marc Andreesen of Andreesen and Horowitz, and J.P. Morgan, Anki just didn’t satissfay a market need that was willing to pay for its application of AI. Maybe the innovators were too early. Maybe the technology was still immature. Maybe UiPath will go through the same observation and experience – who knows.

Either way it is interesting to see two organizations focused on leveraging AI on divergent paths. Focusing on AI is not a guarantee of success. Focusing on a real market need remains a requirement. Despite the promise of new technology (or silver bullets), the peril related to the lack of basic business model remain persistent.

(This post originally appeared in Andrew White's Gartner blog, which can be viewed here).

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