It sure didn’t take long for me to start receiving responses to my post earlier today via email (see below).
Hi Jon, I appreciated your great, quick read as a break during a break in place today. Thanks for sharing your experience and your observations.
“it takes people working with people to achieve enduring success” So true, since the dawn of time and forever until the end of time.
It’s too bad we will miss what might have been a good intellectual exchange on the opportunities and threats. He and we all could have benefited. Que sere, sera!
Since the strengths are somewhat self-explanatory, I think the fundamental disconnect happened when the conversation turned to Weaknesses.
Crowded Market
When I suggested that the solution provider market was very crowded, I was rebuked a couple of times and told, ‘ There is no one else who has “our solution” in the market. We are the only company offering this solution. ‘
Of course, at this stage, I cannot verify if that is the case. However, when I talk about a very crowded market, I will refer to the latest in a series of articles on solution map migraine and the challenges with creating market awareness – Procurement Professionals Are Not Dinosaurs!
For example, how many “one-off” and “unique ” solutions from the dot.com boom in the graphic below are still around today?
AI Skepticism
Gartner reports that 80% of all AI initiatives fail. Right there, you have a major area of concern because maybe one bad apple doesn’t ruin the barrel, but more than a few certainly will.
This lack of trust in AI really hit home when I read the following articles from August 2021 and February 2024, respectively. The title of the first one says it all, while some of the statistics of the second demonstrate there is still considerable progress to be made in bridging the gap between the excitement of AI promise and AI real-world adoption:
August 2021 – Why are marketers so reluctant to dive into the artificial intelligence waters?
February 2024 – 50+ Artificial Intelligence Statistics for Marketers in 2024
“30% of marketer-respondents believe that generative AI poses significant risks to brand safety and misinformation.”
“53% of organizations cite cybersecurity as a generative AI risk.”
“Nearly 50% of U.S. consumers believe that neither Photoshop nor generative AI must be used in social media posts for commercial purposes.”
“Almost half of the marketers we surveyed are concerned about data privacy and ethics surrounding AI.”
If marketing professionals, who are usually the early adopters of technology, feel this level of reluctance towards AI in 2024, what does that tell you?
I will not even go into the much-discussed C-Suite Black Box fears.
Small Company
The ultimate disconnect with the CEO of Kavida.ai was when I said that they should be at $7.5 million in revenue by now versus $1 million. The click of the CEO’s off switch was palpable. He thought that I was talking out of my hat and that anything I had to say from that point lacked credibility. I understand how he felt.
However, as the image below shows, LinkedIn estimates that a company in a similar industry of similar size generates between $2.5 and $5 million in annual revenue.
My reference to $7.5 million was based on several factors.
- AI company survival rates are not favorable – https://www.linkedin.com/pulse/uncomfortable-truth-why-most-ai-companies-destined-fail-david-chen-t0ufe/
- Why big companies don’t buy from small companies – https://www.linkedin.com/pulse/why-big-companies-dont-buy-from-small-don-khamapirad-0cogc/
- I didn’t even start to talk about gross profit. In my previous article, I talked about how my software company in the early 2000s generated $2.1 million GP on $3.2 million revenue, which buys you a lot of time and independence. I didn’t even include the multi-year funding I received from the Government’s Scientific Research & Experimental Development (SR&ED). Having a positive cash flow plus government funding certainly doesn’t hurt.
Now, the CEO did indicate that they had four new contract wins recently. The only cautionary advice I would offer is that I can remember one of the country’s biggest banks and a prestigious US university contacting me to have a meeting and even participate in a paid trial.
Unfortunately, they were researching what we were doing with the intention of either building a similar solution themselves or working with a larger, more established solution provider, e.g., a publicly traded company.
I am not saying that this is what is happening here because I don’t know enough about the four deals to which the CEO was referring. All I am suggesting is that they are aware that these things will happen.
I want to reiterate that the above-described weaknesses apply not only to this company but also to many promising solution providers.
Tomorrow, I will write about the opportunities and the potential threats that will arise the next day.
30
Procurement Insights
Reader Response To My Minions’ Post
Posted on June 24, 2024
0
It sure didn’t take long for me to start receiving responses to my post earlier today via email (see below).
Hi Jon, I appreciated your great, quick read as a break during a break in place today. Thanks for sharing your experience and your observations.
“it takes people working with people to achieve enduring success” So true, since the dawn of time and forever until the end of time.
It’s too bad we will miss what might have been a good intellectual exchange on the opportunities and threats. He and we all could have benefited. Que sere, sera!
Since the strengths are somewhat self-explanatory, I think the fundamental disconnect happened when the conversation turned to Weaknesses.
Crowded Market
When I suggested that the solution provider market was very crowded, I was rebuked a couple of times and told, ‘ There is no one else who has “our solution” in the market. We are the only company offering this solution. ‘
Of course, at this stage, I cannot verify if that is the case. However, when I talk about a very crowded market, I will refer to the latest in a series of articles on solution map migraine and the challenges with creating market awareness – Procurement Professionals Are Not Dinosaurs!
For example, how many “one-off” and “unique ” solutions from the dot.com boom in the graphic below are still around today?
AI Skepticism
Gartner reports that 80% of all AI initiatives fail. Right there, you have a major area of concern because maybe one bad apple doesn’t ruin the barrel, but more than a few certainly will.
This lack of trust in AI really hit home when I read the following articles from August 2021 and February 2024, respectively. The title of the first one says it all, while some of the statistics of the second demonstrate there is still considerable progress to be made in bridging the gap between the excitement of AI promise and AI real-world adoption:
August 2021 – Why are marketers so reluctant to dive into the artificial intelligence waters?
February 2024 – 50+ Artificial Intelligence Statistics for Marketers in 2024
“30% of marketer-respondents believe that generative AI poses significant risks to brand safety and misinformation.”
“53% of organizations cite cybersecurity as a generative AI risk.”
“Nearly 50% of U.S. consumers believe that neither Photoshop nor generative AI must be used in social media posts for commercial purposes.”
“Almost half of the marketers we surveyed are concerned about data privacy and ethics surrounding AI.”
If marketing professionals, who are usually the early adopters of technology, feel this level of reluctance towards AI in 2024, what does that tell you?
I will not even go into the much-discussed C-Suite Black Box fears.
Small Company
The ultimate disconnect with the CEO of Kavida.ai was when I said that they should be at $7.5 million in revenue by now versus $1 million. The click of the CEO’s off switch was palpable. He thought that I was talking out of my hat and that anything I had to say from that point lacked credibility. I understand how he felt.
However, as the image below shows, LinkedIn estimates that a company in a similar industry of similar size generates between $2.5 and $5 million in annual revenue.
My reference to $7.5 million was based on several factors.
Now, the CEO did indicate that they had four new contract wins recently. The only cautionary advice I would offer is that I can remember one of the country’s biggest banks and a prestigious US university contacting me to have a meeting and even participate in a paid trial.
Unfortunately, they were researching what we were doing with the intention of either building a similar solution themselves or working with a larger, more established solution provider, e.g., a publicly traded company.
I am not saying that this is what is happening here because I don’t know enough about the four deals to which the CEO was referring. All I am suggesting is that they are aware that these things will happen.
I want to reiterate that the above-described weaknesses apply not only to this company but also to many promising solution providers.
Tomorrow, I will write about the opportunities and the potential threats that will arise the next day.
30
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