The AI industry is rapidly evolving, with new tools and platforms constantly emerging. For startups, simply developing a functional product is not enough to secure long-term success. Businesses need a clear strategy, a unique selling point and the ability to adapt to changing market conditions.
Raphael Allstadt, CEO of AI notetaker platform tl;dv, has outlined key steps AI startups should take to remain competitive. These include identifying strengths and weaknesses, differentiating from competitors, avoiding reactive feature development and focusing on speed and adaptability.
AI startups must also accept that neither their marketing nor their product will ever be perfect. Instead of striving for flawlessness, they should prioritise efficiency and focus on key areas that drive growth. Offering free plans and strong customer support can further help companies establish themselves in the market.
Understanding Strengths and Weaknesses of AI Startups
Startups must evaluate their own strengths and weaknesses while also analysing their competitors. According to Allstadt, this process helps businesses identify areas for improvement and uncover opportunities to stand out.
“In a world where it has never been cheaper and easier to build a web app, there are new AI tools constantly being developed,” he said. “Thriving as a business isn’t just about surviving in such a competitive landscape; it’s about leading the way with innovation and what sets you apart from the rest.”
Allstadt advises startups to assess their competitors’ priorities and strengths, identifying gaps that can be leveraged. “Knowing what your competitors’ weaknesses are can help AI business owners find their own way to be more effective. It’s not about copying but finding your own way to win.”
Creating a Unique Market Position
Startups often lack the financial resources of larger competitors, making it essential to differentiate in ways that cannot simply be replicated with money.
Allstadt suggests focusing on aspects such as branding, niche market appeal, skilled teams, or strong community engagement. “Having advantages that money can’t buy makes it hard for your competitors to copy you. If you can’t outspend them, outthink them. That’s how you thrive as an AI startup.”
Avoiding Feature-Following and Prioritising Customer Needs
Instead of mirroring competitors’ features, AI startups should engage directly with customers to understand their needs.
“You need to spend time understanding what your customers want from you,” said Allstadt. “This means taking time to speak with them directly, so you can find out what their needs are.”
Through ongoing engagement, businesses can refine their offerings and focus on the most valuable customer segments. “In time, as you develop your product and grow as a business, you’ll understand which customers are best for you from an economic perspective. This will narrow down conversations on customer needs and what features you need to develop and prioritise.”
Balancing Speed and Perfection
Startups should not aim for complete perfection when developing their products or marketing strategies. Instead, they should focus on rapid progress and continuous improvement.
“No matter how much work or effort goes into developing a product or business, you need to remember that it is never going to be flawless,” said Allstadt. “You shouldn’t aim for 100% perfection because realistically, you are never going to get there.”
He advises focusing on achieving “70% perfection” in key areas that drive business success, rather than getting caught up in minor details.
Adapting to Industry Changes
The AI industry is constantly shifting, requiring businesses to move quickly and embrace change.
“At the moment within the AI landscape, the game shifts constantly, with something new becoming an obstacle overnight,” said Allstadt. “That’s why it’s so important to be adaptable and not get hung up on things that are going to slow you down.”
Startups can benefit from offering free plans and strong customer support, which can provide valuable insights into user needs and product performance.
“Providing options for your customers, such as a free plan or excellent customer service, can help you change the game and position yourself for success,” said Allstadt. “However, on its own, a free plan probably isn’t quite enough; you also want to have a team of exceptional support that will be essential to understanding your audience.”
Support teams play a crucial role in bridging the gap between a company’s intended product experience and actual user feedback, helping refine and improve the platform over time.
As AI startups continue to navigate a competitive and fast-moving industry, those that embrace innovation, speed and adaptability are more likely to succeed.
