You can be on Entrepreneur’s cover!

Startups Should Not Aim To Build AI Products; But To Solve a Customer Need Gap A report by NASSCOM and BCG reveals that India's artificial intelligence market is predicted to reach a staggering USD 17 billion by 2027

By Paromita Gupta

Opinions expressed by Entrepreneur contributors are their own.

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

"AI might be a powerful technology, but things won't get better simply by adding AI," said American theoretical neuroscientist and artificial intelligence expert, Vivienne Ming. And it stands true. The 21st-century tech entrepreneurs know what is the secret recipe of a successful startup, and that's not AI; rather the problem they are addressing.

Adoption of artificial intelligence does not guarantee success or an eureka moment. But that's not a hurdle for AI startup founders in 2024. According to Tracxn, a market research firm, there are 5,940 Artificial Intelligence startups in India including Freshworks, Shiprocket, DeHaat, Ixigo, and Bizongo.

A report by NASSCOM and BCG reveals that India's artificial intelligence market is predicted to reach a staggering USD 17 billion by 2027.

So, what comes first? Tech or addressing pain points? Siddharth Dialani, who co-founded BharatAgri in 2017 as a B2C e-commerce company for farmers and whose startup enables farmers to buy all kinds of seeds, fertilizers, and pesticides and acts as an advisory-driven e-commerce, says, "One thing I absolutely love about AI now is that people are seeing how AI is impacting their real day-to-day life. Fortunately, we have a couple of people who literally forced us to build something in AI in early 2023, when ChatGPT just got famous," he shares.

While AI becomes a more integral part of our lives as days pass by, it certainly is not going to be a replacement for the workforce. "We don't completely replace humans with AI, but just the fact that now teacher assistants are able to do a lot more. Now, one can be assisting five different people at the same time, just because AI is doing 80%," shares Anshuman Singh, Co-Founder, InterviewBit & Scaler. The latter is an online transformative upskilling platform that has upskilled 4000+ graduates and worked with 600+ organizations. Nielsen Norman Group states that AI adoption improves employee productivity by 66 per cent.

Under the regulatory eye

India's expenditure on Al increased by 109.6 per cent million in 2018 and is expected to grow at a CAGR of 39 per cent by 2025. Indian startups are leveraging Al to create personalized and effective offerings for their target audience. So, how are the government regulations and policies treating startups? Talking about the Indian ecosystem, Abhiroop Medhekar, Co-Founder and CEO, Velocity said, "In general, we have had a regulator which is very much innovation-friendly. So I think we are definitely optimistic. We believe that there is enough room for us to operate, play, experiment, and build something."

This view can be seconded by the fact that the Indian Government's 'AI Advisory' which states that all generative AI products, like large language models built along the lines of ChatGPT and Google's Gemini, would have to be made available "with [the] explicit permission of the Government of India" if they are "under-testing/ unreliable". While the advisory has seen revisions lately, IT minister Rajeev Chandrasekhar initially clarified that the permission-seeking process from Meity is only for large platforms and will not be applicable to startups.

While Al is a crucial technology which is under the regulatory eye, certain Al models and algorithms need not necessarily directly impact the customers, rather it helps internally. "There are some use cases which do not impact the customer directly. It's a tool that may help our internal team to improve efficiency. As an e-commerce company, we need to change products on our homepage every day. And, as of today, all the products that we see on the homepage of the app are completely Al-generated," shares Dialani. MIT Sloan shared that Generative Al can improve a highly skilled worker's performance by as much as 40 per cent in comparison with that of workers who don't use it.

The IT–BPM sector overall employs 5.4 million people as of March 2023. With India being the majority of the tech pool for the world, upskilling and reskilling are the need of the hour. So, where does India's pool stand? Singh categorizes India's talent into two parts- mass India, and the top 0.1% India. Talking about the maturity of Al and GenAl presently, he shares "Al still might not be as mature, even when it comes to gen Al or models to, to be given an autonomy over a particular product, when you expose it to consumers, that's where it could possibly cause harm."

Lastly, on being asked which sectors would be the biggest gainers apart from their respective operating spaces, the trio mentioned marketing, healthcare, and customer service to be the priority sectors.

(They were speaking at Entrepreneur India's Tech and Innovation and W3 Summit 2024)

Paromita Gupta

Features Writer with Entrepreneur India

Covering news and trends in AI and Metaverse segments. An avid book reader running her personal blog on the side. You may reach me at paromita@entrepreneurindia.com. 
Leadership

You Won't Have a Strong Leadership Presence Until You Master These 5 Attributes

If you are a poor leader internally, you will be a poor leader externally.

Branding

94% of Customers Say a Bad Review Made Them Avoid Buying From a Brand. Try These 4 Techniques to Protect Your Brand Reputation.

Maintaining a good reputation is key for any business today. With so many people's lives and shopping happening online, what is said about a company on the internet can greatly influence its success.

Business News

Samsung Makes 6 Day Workweeks Mandatory for Executives as the Company Enters 'Emergency Mode'

Samsung said its performance "fell short of expectations" last year. Now executives are required to work weekends.

News and Trends

IT Firm Happiest Minds Technologies Acquires Macmillan Learning India

The deal will likely be finished by April 30 and will cost INR 4.5 crore.

Resumes & Interviewing

Build a Better Resume with This $35 Subscription

AI Resume Builder promises to help you apply to jobs twice as fast.

Starting a Business

6 Effective Funding Strategies for Startups

Navigating startup financing is complex. Entrepreneurs find themselves at the crossroads of innovation and survival, where a single decision can either fuel their dreams or extinguish their aspirations. Here we look at six ways you can finance your startup to support your business for long-term success.