Artificial Intelligence: what is its role in a SaaS?

It is necessary to start by clarifying a few points, especially at a time like this, when Artificial Intelligence is on everyone's lips. What do we really mean by Artificial Intelligence?

Too often, simple data mining processes (the extraction of information from large amounts of data) are passed off as Artificial Intelligence. In reality, this term refers to the ability of a machine to perform tasks that are typically carried out thanks to human intelligence.

All this is to say that it is a technically very complex world with various facets, and that the number of challenges arising, both from a computational perspective and in terms of resources, is constantly increasing. Just think that under the umbrella of Artificial Intelligence, we can enumerate a long series of specializations: machine learning, deep learning, natural language processing, speech to text, text to speech, image recognition, and so on.

Artificial Intelligence Startups VS Artificial Intelligence within a Startup

There is a substantial difference between starting a pure AI startup, which makes it its core business, and using AI within a startup. This difference can be summarized as the amplification of all the challenges and issues related to doing Artificial Intelligence every day.

Let’s see what the main challenges are that a startup may face when it wants to create a product largely based on AI.

First of all, several very specific vertical skills are required, which are difficult to find and require alternative engagement strategies. Consider the necessity to accompany development figures with new professionals, such as data scientists, data engineers, and machine learning experts, each of whom has most often embarked on different specialization paths (doing NLP and thus analyzing natural language is very different from image analysis).

A painful point is related to infrastructural costs, such as those for using GPUs, whose prices have recently skyrocketed due to cryptocurrency mining activities. These processors are used to train models based on neural networks or even just to accelerate the execution of the same.

Doing Artificial Intelligence takes time, both in terms of research and development. Time that a startup hardly has available, especially in the early stages of go-to-market. This intrinsic slowness obviously conflicts with the rapid obsolescence characteristic of cutting-edge and constantly evolving technologies. The risk of investing resources in a product that becomes obsolete the moment it is launched on the market is extremely high.

How do we tackle all these challenges if not with adequate investments to support growth and scalability? Just take a look at the rounds closed by pure AI companies, such as Hugging Face, which has already raised over $60M since 2017, or Jarvis.ai, with over $6M between 2020 and 2021.

Fortunately, many of the difficulties mentioned above are mitigated by the presence of a strong and active global community surrounding AI, which puts a lot of emphasis on the concepts of Open Source and sharing.

Artificial Intelligence as an Added Value of a SaaS

If it is therefore very difficult to make AI the core business of a startup, how can it be employed within a product, particularly a SaaS?

I believe that the key to understanding this problem is the use of Artificial Intelligence as an enabling element of software, functional to add new features or enrich existing ones.

AI can be used to simplify the user experience during the navigation of an interface by using – for example – natural language interpretation (NLP) to show the user summaries of long texts to read or highlighting the main identified entities in the text to facilitate understanding.

Moreover, given the high computational cost and use of AI services, the scalable pricing logic of a SaaS is well-suited to optimize this aspect, allowing certain features to be enabled only at higher subscription tiers.

Thus, making Artificial Intelligence modular within a SaaS promotes the enrichment of the offering and the adoption of an extremely scalable business model.

How do we use Artificial Intelligence in Startup Bakery?

In Startup Bakery, Artificial Intelligence is one of the ingredients at the core of our recipes, used to add value to the SaaS of every startup.

Our technological framework indeed, in addition to containing components and services to speed up the development of MVPs as much as possible, also provides startups with high-value-added Artificial Intelligence services.

But not only that... the Startup Bakery team is working on QuSeed, a proprietary software to facilitate data analysis in support of investment decisions.

QuSeed ingests various types of data (structured and unstructured) from different sources and processes it to offer Business Analysts and Investment Managers valuable insights on investment and acquisition trends related to the world of innovation.

QuSeed uses a proprietary NLP pipeline for natural language interpretation, as well as neural networks and mathematical models for extracting information from numerical data.

In conclusion, at Startup Bakery, artificial intelligence is the cherry on the cake aimed at bringing immediate value and innovation to the users of our SaaS.

Startup Bakery is the Italian startup studio specializing in creating B2B SaaS companies with Artificial Intelligence. We offer aspiring Co-Founders the opportunity to develop a business idea. We create investment opportunities for Professional Investors. We assist companies in the innovation process.