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As Artificial Intelligence Soars, Startups Still Need The Human Touch To Succeed We must strike a delicate balance between harnessing the power of AI and addressing the broader aspects of business development.

By Rashit Makhat

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.

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Artificial intelligence (AI) is perhaps the biggest thing since the advent of the internet, transforming industries and daily life much like the emergence of electricity, the printing press, and the Industrial Revolution.

While AI is impossible to ignore, captivating us with its enormous potential for heightened efficiency, innovation, and disruptive impact, the danger for startups is that an obsession with new tech can lead them astray.

In the search for the next groundbreaking solution, it is essential for founders to maintain a balance in the way they go about developing their business, and avoid becoming overly focused on AI to the detriment of other vital elements essential for startup development.

Some of the most significant success stories to have emerged from the Middle East's startup scene belong to companies that have flourished by embracing a more comprehensive strategy, and giving their business a human touch. In the AI age, human intelligence still pays rich dividends.

While the excitement surrounding AI is understandable, entrepreneurs cannot afford to overlook the potential downsides that come from neglecting other fundamental business components.

An exclusive focus on AI may divert attention from key factors such as market research, customer feedback, and operational efficiency. Successful startups understand that technology is just one piece of the puzzle.

Overlooking cultural and regulatory nuances can also become an issue. AI solutions may not always seamlessly integrate with local cultures and regulatory frameworks, and ignoring these factors can alienate potential customers, and lead to legal complications.

As the flood of new AI continues, who can guarantee which of the seemingly brilliant ideas to emerge will become a long-term success? Relying solely on cutting-edge AI technology can be risky. Unproven algorithms or poorly understood models may result in unintended consequences, damaging both reputation and business viability.

While AI is changing how we live, and the way we go about business, it cannot be the sole factor that determines the way startups go about scaling their business for major growth, and entry to global markets.

There are some striking examples of Middle East startups that have scaled successfully, while avoiding the pitfalls of AI-centric obsession, most notably leading e-commerce marketplace Souq, and ride-hailing platform Careem.

Souq focused on creating a robust e-commerce platform tailored to the unique needs of the region. While technology played a crucial role, the emphasis was on understanding local consumer behaviors and building trust through reliable service, ultimately leading to it being acquired by Amazon.

Careem disrupted the transportation industry in the Middle East by prioritizing customer experience and localization. Technology was integral to its success, but an emphasis on cultural sensitivity, and the customizing of its services to cater to the unique characteristics of the local market, set it apart, eventually leading to its acquisition by Uber.

Rather than merely replicating existing ride-hailing models from other parts of the world, Careem recognized that many individuals in the Middle East prefer cash transactions, and gave cash payments as an option, differentiating itself from competitors, and accommodating customers without access to digital payment methods.

In a region where cultural norms can affect the mobility of women, Careem also took a forward-thinking approach by introducing female drivers, creating a secure transportation option, while also promoting inclusivity for female passengers.

The emphasis on addressing genuine needs not only set Careem apart in the competitive ride-hailing industry, but has also paved the way for continued innovation and expansion.

This story is an example of how the smartest entrepreneurs, while maximizing the enormous benefits delivered by tech advancements, particularly in the sphere of artificial intelligence, make the best use of their ability to learn, reason, solve problems, comprehend complex ideas, plan, think abstractly, and benefit from experience.

Human intelligence is rarely talked about in today's tech-led business world, but the combination of problem-solving skills, emotional intelligence, and adaptability are vitally important to startup development.

Founders need to think critically, and adapt to new situations, analyze and solve problems effectively, work their way through complex situations, make tough decisions, and devise strategies to achieve goals.

To succeed, they must strike a delicate balance between harnessing the power of AI and addressing the broader aspects of business development. This starts by developing a comprehensive business plan that integrates AI as a tool, rather than the sole focus, which means having a firm grasp on how technology aligns with the overall mission and customer needs.

Understanding the target audience at the outset is key. Startups must get to know the people they want to reach, and understand their needs, tailoring solutions to address specific pain points and cultural nuances.

As AI adoption accelerates, offering unparalleled potential, it should not be the lone driving force behind a founding strategy. By learning from the success of companies which have embraced a more inclusive approach, startups can navigate the tech landscape more effectively, making sure their growth is stable and sustainable.

Related: Playing The Long Game: How To Take A Business From Zero To Ten

Rashit Makhat is the co-founder and Director of Scalo Technologies, a tech venture company based in Dubai.

Rashit has more than 15 years of management experience in telecommunications, mining, information technology, and asset management in the banking and real estate sectors. Since 2020, he has served as the co-founder and Director of Dubai-based Scalo Technologies, which helps startup founders to build impactful technology companies, and generate sustainable growth across key sectors of the global digital economy.

Among Scalo Technologies’ investments are Hexacore, a mobile game developer and publisher specializing in hybrid mobile Web3 games, Megarender.com, a cloud 3D render farm that offers rendering services to 3D specialists, including freelancers, architecture firms, animation studios, VFX studios, and game developers, and Voctiv, an international deep tech specialist that helps companies build fully autonomous, AI-powered contact centers, with virtual agents capable of maintaining sophisticated conversations, and mimicking human emotions.

Rashit was formerly was an independent director and member of the Board of Directors of Kcell JSC, one of the largest telecommunication companies in Kazakhstan, and the country’s leading gold mining concern, Kazakhaltyn JSC. He was also an independent director and member of the Board of Directors of Kaspi Bank JSC, one of the leading financial institution in Kazakhstan.

Rashit graduated from Moscow State Institute for International Relations with a degree in international economic relations, and earned his Executive MBA degree from London Business School.

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