(Is AI too expensive for a small business?)
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I saw an article that showed how AI is being introduced at a far greater rate in large businesses than in small and medium sized businesses. The article did not go into the reasons why, but I believe it’s the reason that big businesses are, well, big, and it’s hard for small businesses to ever get bigger, much less use AI.
I filed the article for further reference but, for the life of me, I have no idea what I did with the article so there’s no footnote. If I find it later, I will update this article. In the meantime, you have to trust me, and trust the assumption that big businesses are adapting AI far faster than small businesses.
My top reasons of the differences between big and small businesses:
- Budget. Number 1 reason. I was speaking to a friend of mine (Emily) who runs a small café. She and I were shooting the s**t (that’s breeze for all of you nasty minded types), and the subject of AI came up. She said it’s not even on her radar as she was more worried about the rising costs of lettuce. In other words, immediacy in any solution is important (FN1).
- Competitive Advantage. Absolutely. AI is a great tool to consider. Small businesses are concerned about competition, but a solution needs to have a real and immediate return on investment versus an assumed future return. Big companies, on the other hand, are all about outsmarting the competition and can take their time to build a long term use case for AI.
- Resources. Let me go back to Emily. She has 5 staff members doing the workload of 10. Behind the counter of her café, she looks like a whirling dervish. In other words, she not only doesn’t have the budget, but she doesn’t have the staff to implement. Big companies typically have bigger budgets and many employees, which allows them to invest in AI technologies and organizational infrastructure (which is HR speak for making departments work together).
- Scalability and Efficiencies. In a small business, scalability is a nice stretch goal, but scalability for a small business is, in my opinion, not something that is a priority. Efficiency, on the other hand, is important. But go back points 2 & 3 above about small businesses needing efficiency now, not later.
- Data. In a large organization, there is more data which, if you graduated from AI 101, you know that AI is hugely dependent on data. Smaller organizations have less data that may be in disparate systems, like QuickBooks, POS systems and individual vendor inventory sheets which to integrate, would tie up staff, resources, etc. etc.
DEMOCRATIZING AI
You can’t solve a problem in a single article, but you can offer suggestions. AI holds transformative potential, but how do you deconcentrate (wait, is that even a word? Yes!) large enterprises and tech-savvy organizations to small businesses. It took a long couple of paragraphs to get to this point, but to assist in the democratization of AI, companies must focus on creating accessible, affordable, and scalable solutions that empower smaller organizations to effectively leverage AI.
Full disclosure. I work with Chris Medina who is the founder of nureal.ai, an artificial intelligence company. I got on board because I like the concept of democratizing AI for small businesses and focusing on practical use cases, offering programs as low as $5.99, and a try before you buy model. Chris is not only a client, but a friend, and we tend to do typical friend things like eat way too big burritos and drink far too many Manhattans (never in those silly martini glasses but always on the rocks) so bringing nureal.ai to market has been intellectually stimulating and fun.
My top list for democratization:
- Affordable pricing models. Offer affordable pricing models and basic functionalities with upgrade opportunities. One of the things I noticed in AI programs is they are often way too expensive. I was pitched by a company to come in and do a discovery analysis on one of my companies-it was $30,000 and no guarantee of reduction in costs or increase in efficiencies. You know who you are. Shame on you!
- KISS. Meaning “Keep It Simple Stupid”. Small businesses do not have the internal talent to use, much less implement, AI. This means programs with minimal technical input and low to no code interfaces can help non-technical users implement AI.
- Hardware light. A big issue for adoption in small businesses is whether there is a large expense for implementation. Think bigger servers. Developing lightweight AI systems that run efficiently on low-cost hardware will go a long way towards democratizing AI for small businesses with limited technological infrastructure.
- Pre-trained models. Pre-trained models refers to machine learning models that have been “trained” on certain data for a specific task. These models capture generalized patterns and knowledge, which can be fine-tuned or adapted to perform related tasks with less training. Think customer traffic (Emily are you reading?). AI programs can input past reservation data (like peak and off hours), weather, holidays, local events, most ordered food item and reviews with the output being a predictive analysis of future customer traffic patterns.
DEMOCRACY IN THE AGE OF ARTIFICIAL INTELLIGENCE
Yes, I repeated the title but it brings it back to the central theme that AI companies need to think beyond big businesses and help the smaller businesses. The democratization of AI is critical for ensuring that businesses of all sizes can compete in the evolving digital economy. Broadening AI is not just beneficial for small businesses but also benefits the nation as a whole.
About the author
Gary Sumihiro is the founder of Sumihiro Investments, LLC a global strategic consulting firm. Learn more at www.sumihiroinvestmentsllc.com.
About nureal.ai
Leading the democratization of artificial intelligence by offering a marketplace of affordable AI programs. Learn more at www.nureal.ai.
FOOTNOTES:
FN1: This gets into an even broader subject of whether tax credits really help small businesses at the right time. The operative phrase is “right time” as a small business is not always thinking about the end of the year, but what is happening that day and how to stem rising costs that day.