Not so long ago, AI startups were the new shiny object that everyone was getting excited about. It was a time of seemingly infinite promise: AI was going to not just redefine everything in business, but also offer entrepreneurs opportunities to build category-defining companies. A few years (and billions of dollars of venture capital) later, AI startups have re-entered reality. Time has come to make good on the original promise, and prove that AI-first startups can become formidable companies, with long term differentiation and defensibility. In other words, it is time to go from "starting" mode to "scaling" mode.
A decade ago we started to see the emergence of mobile-first companies. Mobile-first companies built their companies on mobile as the core operating environment for their business. AI-first companies are building their companies with artificial intelligence as their core driver of competitiveness. That seems to be the case today at Uber. AI is so central at the company, whether or not it should be used is not even a question anymore.
Masayoshi Son, long known as a free-spending benefactor who encouraged startup founders to pursue their dreams even if it meant losing billions of dollars, had a different message for entrepreneurs last week: Your dreams had better be profitable. The chief executive officer of SoftBank Group Corp. told company leaders gathered at the five-star Langham resort in Pasadena, California, that they need to become profitable soon and stressed the importance of good governance, according to a person who attended the event. Public investors aren't going to tolerate gimmicks, like super-voting rights or complicated share structures, that privilege founders over other stakeholders, he said, adding they should get in shape years before they consider going public. The "or else" part of the message became clear just days later when SoftBank led the ouster of WeWork's controversial co-founder, Adam Neumann. The co-working giant's plans to go public this month imploded, with investors balking at paying a premium for a money-losing real estate venture controlled by an eccentric founder.
For the past decade, New York has worked to overtake the Bay Area as the US's #1 startup hub. New York startups have doubled their relative share of dollar volume invested into new tech companies nationwide since 2006 (source: Mattermark), and are now potentially staring down the opportunity to carve out a larger slice of that pie. Recent breakthroughs in Artificial Intelligence will enable tasks that were once thought impossible for a computer to accomplish. In the way that mobile made Uber (via GPS chips) and Snapchat (via front-facing cameras) possible, AI is believed to be the technology that will set off the next wave of massively successful start ups. The most interesting thing to see over the next few years is how New York's startup community will weather the hype surrounding artificial intelligence.
Artificial General Intelligence won't be with us for at least another 100 years, but former Baidu chief scientist and Google Brain cofounder Andrew Ng argues that AI will radically alter most industries within the coming decades. Ng joins Azeem Azhar to discuss the progress of AI and how it's altering businesses and the future of work. HBR Presents is a network of podcasts curated by HBR editors, bringing you the best business ideas from the leading minds in management. The views and opinions expressed are solely those of the authors and do not necessarily reflect the official policy or position of Harvard Business Review or its affiliates.