The machines know what you’re thinking. And that’s turning into a potential boon for some small-business owners.
AI has become the hot business buzzword. And while artificial intelligence may conjure images of evil mechanical overlords, in actuality, they tend to resemble a helpful assistant.
But AI technology isn’t just for large corporations. Smaller operations are finding ways to tap this tech, too. In this AI space, creativity and smart application often matter more than size—and can have just as large an impact on operations.
“AI is an attempt to mimic human brains using mathematics,” says Bruce Daley, a principal analyst with Tractica, a market research and consulting group that specializes in AI and technology. “It’s an umbrella term that covers a wide variety of efforts to program computers the way nature programmed the mind.”
But the brain is complicated, he adds, “so it’s a very crude approximation.”
AI encompasses satellite technology that can help farmers plan their planting, smartphone apps that track store inventory, heat maps that assess customer movements, even the work of personal assistants such as Apple’s Siri.
Currently, AI for business is a $202.5 million market, according to a Tractica report from 2015, but is predicted to hit $11.1 billion by 2024.
Perhaps an accountant would develop an app that works with a personal assistant to offer immediate answers to business tax questions, Daley suggests. Or a medical office may help diagnose a mental disorder based on speech problems. The challenge is that many consumers remain new to this idea of “AI enterprise applications,” and while it’s easy to come up with ideas, the technology to make it work, and work well, can be much more difficult.
After revealing the power of its Watson computer system on TV, IBM has applied its powerhouse think bot to business solutions. At the Cleveland Clinic in Ohio, a pioneering program developed with IBM allowed doctors to input patient case studies, and Watson was able to pinpoint key parts of the patient history and symptoms to help diagnose the patients' maladies. The implications could extend to more localized medical providers—tapping into the power of Watson, a general practitioner in a small, local practice may now have a new resource.
On a more intimate level, Prism Skylabs creates heat maps of retail store traffic to track how consumers move through a store, so owners can identify problem spots as well as opportunities. The company uses in-store camera to generate reports, and lets owners check reports and cameras remotely.
Other firms have begun capitalizing on the ubiquitousness of smartphones to conduct similar studies. A consumer walks through an outdoor market or open-air mall, and a system picks up their phone GPS to see where they go and how long they linger, such as this example from Noldus.
Try It On
Fashion has become an early adopter of AI, matching apps to retail to tailor online shopping experiences.
ThirdLove, a lingerie company out of San Francisco, wants to revolutionize bras—and maybe everything else that women loathe shopping for.
“Most women don’t enjoy getting fit for a bra in the traditional method,” says co-founder Heidi Zak. “'I’m half dressed in front of somebody I don’t know who’s measuring me,’” isn’t exactly a good time.
Most of her direct-to-customer business comes from online sales, but the big differentiator is the firm’s iPhone app that, with two photographs, can correctly size a woman’s top. That propriety technology also gives ThirdLove data on its customers that informs the company’s designs. ThirdLove doesn't use fit models, Zak says.
Education remains a challenge—ThirdLove created a video tutorial to guide customers in taking photos. And they have to convince customers that this really does work (the software end has to do with measuring distances and judging curves based on the photos).
But the venture capital crowd is listening. After three years, ThirdLove has 18 employees. Zak won’t discuss revenue, but TechCrunch reported that the company received $5.3 million in a 2013 seed round, and other $8 million in round A funding by early February. Dreaming big, Zak one day envisions streamlining the swimsuit category as well.
Bag It Up
Reusable bags as an alternative to paper and plastic grocery options were almost unheard some 25 years ago. Then Sharon Rowe, founder and CEO, started her Eco-Bags company, now based in a New York suburb. As a young mom, she wanted to put something good in the world, she claims. But she had no market research, no stats. "We started the business on sort of a hunch," she says.
This year, she estimates her company will sell around 500,000 reusable bags. Her clients include Estee Lauder and Northeast grocery chain Key Food. Eco-Bags relies heavily on NetSuite, which offers a cloud-based system to track inventory, sync inventory with accounts and perform a host of other back-end services.
Rowe was an early adopter with that, too, having used NetSuite since 2008.
Using a cloud-based, intuitive service allows her to focus on things like branding, messaging and relationships, rather then accounting redundancies and more staff, she says. Her advice to small-business owners considering engaging such services is to remember that technology can't do everything.
"Technology doesn’t build your relationships," she says."Technology services your relationships. For the same reason all those people go to those trade shows and learn about AI—they go there because they don’t want their phone talking to them. They want to talk to a person" about the possibilities.
"I would apply our perspective—high tech, but high touch," Rowe adds. "The more technology you use, you still have to maintain your personal touch."
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