Selling AI sure is fun!
Recently, I had a conversation with the founder of an AI startup who described an interesting dynamic:
- CEO of a traditional enterprise announces that every department should be modernizing operations with AI
- Every team rushes to investigate, including teams with limited tech expertise (think HR, finance, marketing, legal)
- Suddenly everyone wants to buy stuff, per the CEO mandate, so IT scrambles to assemble an AI review board, usually without experienced personnel
- Chaos ensues
- Eventually, a few vendors manage to plinko chip their way through AI review and procurement
- The software isn't as game-changing as everyone was hoping, and in many cases, it doesn't work at all
Every part of this matches what I observed working with large enterprises as they began to assess AI solutions over the last couple of years.
Over the last month, I asked dozens of non-technical enterprise executives in HR, finance, marketing, and legal to describe the experience they've had trying to buy AI software.
"We need to stay relevant"
Every exec I spoke with said that their CEO has expressed a strong point of view about AI. The specifics depend on the exec's industry. Execs working in technology were more likely to say that their CEO articulated a nuanced point of view that included privacy and security considerations. Execs from other industries described their CEO's mandate as: We need to stay relevant, so use AI everywhere you can.
One finance exec from a major manufacturing company summarized it this way: "Manufacturing is an old industry. We do cutting-edge manufacturing work, but the way we operate as a business is very old. Our CEO sees AI as a way to get more efficient in our operations, so we're all looking for ways to adopt AI to help us cut costs."
This theme of using AI to cut costs came up in nearly every conversation. It reminded me of our previous data showing that AI startups are explicitly pitching job replacement as their core value prop.
Let Me Google That For You!
A few months ago, I shared that my Textio inbox receives ~400 prospecting messages just from people selling AI outbound sales tools every single week. And I don't even have a sales job title.
The execs I spoke with are all overwhelmed by options. They receive dozens or even hundreds of emails and calls a week promoting AI tools -- and since most of those sales messages are themselves written with the same AI tools that are essentially just thin wrappers on ChatGPT, they all sound exactly the same. These messages get deleted.
The execs all pointed to three avenues for learning about the AI tools they seriously consider buying:
- Recommendations from industry peers they trust
- Recommendations from tech-savvy people on their teams
- Google
That last one really struck me.
One AI founder I work with recently cited SEM as a critical part of his lead gen strategy. He observed that potential buyers are looking for AI tools because of CEO mandates like the above, and that the way many sales prospects find potential tools is via search queries like "AI sales email" or "AI legal discovery."
His observation fully played out in these exec conversations. The execs said that, tasked with cutting costs via AI, they start with the areas of their work they think could become more efficient. Then they Google to figure out what tools exist to help with their specific efficiency blockers.
It's easier to use big platforms
The execs all had different experiences with their company AI boards. Execs working in tech mostly spoke well of their AI boards. Feedback from the execs in other industries was not as positive.
However, all the execs agreed on one thing: AI boards slow things down. A lot. The easiest way to avoid the bottleneck is to choose an AI solution that is already pre-approved.
Rather than buying a purpose-built AI solution that works better, it's usually easier for execs to default to using the lowest common denominator AI features inside products like Workday or Oracle or Lexis-Nexis. Why? Because someone else has probably already done the work to get those applications approved.
As we've discussed before, this is a big issue for AI startups who have to compete with platform players who are building AI features within their applications. One HR exec put it, "I'd obviously rather use the best solution. And to be honest, I already know that the best solution is not SuccessFactors. But my organization makes it much easier for me to use SuccessFactors because I can cut out the approval red tape."
The kids are all right
The non-technical execs I spoke with are established in their careers. As they investigate AI tools, many of them turn to people on their teams who are savvier about tech. Early-career employees find promising tools on their own, use them independently, and then bring them to work.
Microsoft and Google and others have used this playbook for years: Offer free software to students, earn their loyalty, count on the students bringing the tools into their first jobs.
As one marketing exec noted, "It's easier for me to get approval to use AI in the major tools we already have. But our younger team members are finding all kinds of cool tools that work better. Like one guy on my team found a tool that we've been able to use to level up everyone's social media posts. When he recommended it and everyone was able to see how it worked with a free trial, and the posts performed well, I made the case that it was worth buying. We got it done."
The bottom line: As difficult as it is to sell AI right now, it may be even harder to buy it.
What do you think?
Thanks for reading!
Kieran
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