The “Why GenAI” problem

It is now without question that GenAI is the transformative technology of our times. While the business world is grappling with policy, change management, and “general technophobia,” as this HBR article calls it, I see it as being similar to the early days of the internet. At first, it seemed like a novel technology. Then, people were scratching their heads at its application beyond academia, defense, and other niches, followed by an outpour of startups as infrastructure developed and costs reduced, a dot-com crash, and up to where we are today as a society that runs mostly digitally.

All that is to say, GenAI has the footprint of a disruptive trend that will be integrated into all aspects of society. What remains to be seen is the pace at which this integration happens in various parts of our lives. A lack of this understanding is probably why we’re seeing businesses say that they’re unclear about investment priorities when it comes to GenAI:

In short, despite realizing the need to increase their investments in AI, too many organizations are slow to embrace the revolution. - BCG | From Potential to Profit with GenAI

So, businesses are unsure why they should be using GenAI even though they are interested in the technology. I think that startups and teams working in this space have the opportunity to educate and evangelize the technology in a way that businesses understand the value directly.

Topline and bottom line approach

While considering this, I wanted to explore how businesses should be thinking about the technology:

1. As a way to enhance customer value and add new revenue streams (top-line growth)

2. As a way to enhance operational efficiency and reduce costs (bottom-line growth)

I think it's important to think of top-line and bottom-line growth when adopting GenAI. For businesses, it helps to be very clear on what capabilities of the technology they need to hit the specific growth area.

Topline GenAI

Businesses are often looking to add new lines of revenue by innovating with their products and services. If a business has customers that have these needs, then GenAI is a good fit to solve those needs and add a new source of revenue to them:

1. Customers want to synthesize the information they create on the business’s platform
2. Customers want to search and find information without having to do mental gymnastics
3. Customers want to share their knowledge with others on the business’s platform, and they want to be creative and effective in their message.
4. Customers want to be less involved in doing mundane and routine tasks on the business’s platform.

Some examples of topline GenAI integrations are beautifully captured by the folks at Obvious Ventures:

Almost all of the products and services above have integrated GenAI to enhance the value they deliver to their customers. In doing so, these businesses seek to increase user engagement and, therefore, have a solid “why GenAI” answer.

Bottomline GenAI

While growing user engagement and revenue streams are always great, businesses need to sustain topline growth by thinking about their bottom line, i.e., costs. In fact, I think GenAI is most obvious for internal deployment within a business to make operations vastly more efficient and cost-effective. McKinsey agrees:

We estimate that gen AI could offer savings opportunities of $1.4 trillion to $2.6 trillion across operations functions, including customer service, R&D, manufacturing, supply chain, and procurement, alongside its impact on the back office.\

Plenty of research has been done on what sectors have the potential to benefit, as shown in the PWC report. However, the use cases aren’t always obvious from reading reports such as these. If you are a developer or a founder, you would want to know more about the value proposition that you can build, which you will not always find in reports like these.

So, let’s talk about the use cases briefly….

Any business has these needs where GenAI will be a great fit:

1. Saving time drafting, summarizing, and following up on internal communications (meetings, emails, posts, and chat threads)
2. Saving time creating documentation, Customer troubleshooting guides, etc., for knowledge management
3. Assisting employees in their training, learning, and development programs
4. Synthesizing customer feedback efficiently
5. Assisting in the creation of impactful marketing assets easily

If you focus on these needs and the GenAI capabilities, you should be on the right path to delivering a compelling value-prop to your potential customers in the sectors mentioned above, and possibly even more.

GenAI Feature - Business growth fitness summary

I’m not going too in-depth with how I rate the problems and how capable GenAI is at solving them, but I think this table is useful for thinking about what problems you’d want to solve for businesses.

This will help your team craft a value-proposition that businesses find immediately valuable:

Takeaway

So, if you are thinking about a B2B GenAI idea or are someone looking to adopt GenAI for your own business, I hope this is useful to build a mental model of where GenAI can be leveraged in your case and which specific capabilities deliver the highest ROI for you and your customers.