Commentary

AI Peps Up Startups: Personalization Is A Top Goal

by Ray Schultz , Columnist, March 28, 2024

Logic suggests that only established firms are able to use AI. But it isn’t so, judging by How AI is Redefining Startup GTM Strategy, a study from HubSpot.

On the contrary, startups are “adopting AI across the entire business development process — from writing emails to staff, to ideation, product development, go-to-market, ongoing operations, and customer service.”

Specifically, they are using AI to achieve these goals:

Customer targeting and segmentation — 51%
Personalization of marketing content — 46%
Better understanding customer journey — 39%
Improving customer experience/success — 39%
Predictive analytics for sales forecasting — 38%
Product development and/or production — 36%
Pricing strategy and optimization — 34%
Supply chain and/or logistics optimization — 22%

And it seems to be working, for startups with high growth rates. But there are challenges:

Cost of external hiring for those with AI experience — 47%
Integration issues between AI and existing systems — 46%
Lack of existing employees’ AI expertise — 44%
Overall cost of AI tools — 39%

Moreover, founders share these concerns:

Data privacy — 29%
Ethical implications — 24%
Uncertainty with reliability/accuracy — 16%
No specific concerns — 14%
Integration with existing systems/processes — 14%

HubSpot worked with CXD Studio via Pollfish to survey 1,000+ early-stage startup founders (seed to Series B) across industries in January 2024.

It found that usage varies by industry. The widest use is in the information technology/Software vertical (85%). Next are Professional and business services (77%), Manufacturing (72%), Leisure and Hospitality (70%) and Financial activities and/or FinTech (69%). Retail has a 67% startup usage rate.

Are you new to AI (and business)? The study recommends these best practices:

Segment contacts more strategically for marketing, sales and services.
Personalize everything from email, to web content to SMS messaging.
Empower employees to experiment with AI however they feel comfortable, and support them with tools and resources approved by the company.
Train and invest in employees.