AI startups are at the forefront of technological innovation, transforming industries and redefining what’s possible. But, in such a fast-moving and competitive space, having cutting-edge technology isn’t enough.
To truly innovate, thrive and come out on top, AI startups need to focus on more than just algorithms and data. Rather, they need a clear strategy, a strong business model and the ability to scale effectively.
Indeed, success comes from balancing technical excellence with real-world applications, ensuring AI solutions solve genuine problems and create value. Staying ahead requires continuous research, ethical AI development and a commitment to transparency. Attracting top talent, securing investment and fostering a culture of creativity are also essential.
The most successful AI startups don’t just follow trends – they set them. By focusing on the right areas, they can disrupt industries, build sustainable businesses and shape the future of artificial intelligence.
What Should AI Startups Focus On In Order To Innovate and Thrive?
It’s really important that AI startups prioritise developing scalable and efficient machine learning models that provide real-world value. A strong focus on data quality and ethical AI practices is essential to build trust and ensure compliance with regulations.
Startups should also invest in robust cybersecurity to protect sensitive data and intellectual property. Collaboration with industry experts, universities and businesses can accelerate innovation and create new opportunities.
Of course, a user-centric approach is key – AI solutions must be accessible, easy to integrate and genuinely solve problems and make people’s lives easier.
Finally, securing sustainable funding and building a talented, multidisciplinary team will help AI startups remain competitive and drive long-term success.
Our Experts
We chatted to experts in the industry to find out what they think startups need to need to do in order to innovate, thrive and be successful in the industry.
- Matthieu Rouif: CEO and Co-Founder at Photoroom
- Emily van Eyssen: Founder of Remote Recruitment
- Forbes McKenzie: Founder and CEO of McKenzie Intelligence Services
- Karim Saleh: CEO of Cerrion
- Steve King: CEO at Dragonfly AI
- Keith Smith: COO and Co-Founder of IntelliAM
- Aline Miller: Academic Innovation Lead at Sister
- Dr. Katie Baker: Director of UK & Ireland at Tandem Health
- Elliott Limb: CEO and Co-Founder of Cubed
- Paul Houlsby: CEO and Founder of The Perfume Movement
- Alex Hanson-Smith: Co-Founder and CTO at Inploi
- Eléonore Crespo: CEO and Co-Founder of Pigment
- Dr. Richard Blythman: CSO at Naptha.AI
- Raphael Allstadt: CEO of AI tl;dv
Matthieu Rouif: CEO and Co-Founder at Photoroom
“What excites me most about the future of AI is the potential to facilitate new small-business opportunities and make creative and financial freedom available to ordinary users globally, particularly those who prefer to engage with mobile-first technology.
Regardless of the field you’re in, the “who” behind the work could change dramatically in the coming years, making human-centred AI that focuses on solving user problems rather than technology problems more important than ever. It could be the difference between companies that will survive and thrive.
“As leaders, it’s our responsibility to guide this transformation in a way that benefits everyone. The primary focus of AI should be accelerating creativity or productivity rather than replacing humans.”
Emily van Eyssen, Founder of Remote Recruitment
“AI startups must focus on solving genuine real-world issues, not just on impressive tech. I once saw an AI app aimed at helping screenwriters with dialogue prompts; however, as it didn’t resolve an urgent problem, it faltered. Validating your market is essential; ensure your product meets an actual need.
Data integrity is crucial. I have seen projects falter due to bad datasets; for AI models, quality always outweighs quantity. The importance of diverse datasets is fundamental for strengthening models and ensuring their reliability.
The nature of AI is ever-changing; agility and the ability to swiftly pivot or continually learn are paramount. Thriving in AI means adapting fast, much like dancing with technology – being in sync is key.
Ethics should not be overlooked. Transparent governance distinguishes a startup and builds trust. From the outset, include bias-mitigation strategies; today’s investors and consumers require responsible tech.
Strategic partnerships fuel innovation. Engage with universities and research institutions to tap into new advances. Such collaborations were integral to my recruitment innovation efforts.
Ultimately, talent is transformation’s driver. Consider hiring remotely from talent-rich areas such as South Africa. I have leveraged diverse talent to scale operations, achieving access to unique skills and experiences otherwise out of reach.”
Forbes McKenzie: Founder and CEO of McKenzie Intelligence Services
“AI isn’t new – it’s simply making existing processes faster and more efficient. So, startups don’t need to reinvent the wheel. Rather than focusing on hardware creation, they must focus on product-market fit and how their AI-driven solutions integrate into existing ecosystems, without disrupting operations and business.
The era of capital-intensive AI hardware is largely behind us – and now, it’s all about building applications and services, much like the app boom after the iPhone launch.
The real challenge for AI startups today, then, isn’t the tech – but demystifying AI and showing customers the tangible benefits, whether that’s streamlining online banking, automating business processes, or even optimising parts of the NHS.
AI is simply the next evolution of the internet – a tool to do more with less. But with venture capital drying up, startups can’t rely on the funding models of 10-15 years ago. Instead, they must be laser-focussed on go-to-market strategies and using existing AI infrastructure to build real value.
The opportunity is huge – but success depends on understanding that AI itself isn’t the product, it’s the enabler.”
Karim Saleh, CEO of Cerrion
“While many AI startups are flooding into crowded fields like marketing and sales automation, there are far greater opportunities in traditional industries like manufacturing and logistics, where AI adoption is still in very early stages. Manufacturing remains underexplored, despite facing significant challenges globally that need fresh thinking. AI startups that focus on solving some of the real-world problems in this sector can quickly gain a competitive edge.
For example, many Western economies are pushing to build-up manufacturing capabilities, but they face major hurdles—from labour shortages to rising costs, as they also look to minimise waste. AI can help bridge these gaps by optimising production processes, improving efficiency, and reducing reliance on manual labour.
Whatever the industry, startups should prioritise solutions that deliver clear, measurable ROI, whether that’s reducing waste, increasing output, or enhancing safety. For example, manufacturing businesses lose an estimated $1 trillion to waste globally each year. This presents a major opportunity for AI startups to tackle a pressing, quantifiable problem and in doing so the potential is there to quickly build a strong and sustainable position in the market.”
Steve King, CEO at Dragonfly AI
Keith Smith, COO and Co-Founder of IntelliAM
“Echoing the UK science minister’s view, the sudden appearance of China’s DeepSeek on the tech stage means that artificial intelligence is no longer “going to be dominated by two or three players. We’re now in a truly competitive era.
Therefore, AI start-ups must establish and communicate their point of difference as well as deeply understand their audience’s key challenges.
In my experience as COO at IntelliAM, we’re using machine learning and AI to help the UK’s food and drink manufacturing sector.
What sets us apart is our powerful combination of rich domain knowledge – earned through decades of service on production lines worldwide – and a super-talented team of data engineers. They transform billions of untapped data points into a precise early warning and governing system that prevents costly machine downtime, enhances throughput efficiency, and reduces waste streams – boosting productivity, as a result.
Ultimately, success lies in and ensuring AI models are both relevant and practical – driving meaningful innovation and long-term growth for customers.”
Aline Miller, Academic Innovation Lead at Sister
“Business incubators, accelerators, and place-based ecosystems like innovation districts, will play a critical role in bridging key gaps like access to finance and talent, connecting entrepreneurs with a broad network of both local and global innovators, industry experts, investors, and professional services needed to propel ready-for-growth businesses.
As startups seek to scale – whether by tapping into new facilities or emerging technologies like AI – business-first ecosystems will provide the support needed to turn ideas into successful ventures and boost wider economic growth.”
Dr. Katie Baker, Director of UK & Ireland at Tandem Health
Elliott Limb: CEO and Co-Founder of Cubed
“An AI startup is like any startup; to succeed they must first focus on the fundamentals – solving real problems, delivering value and building trust. This means identifying clear use cases with measurable outcomes and ensuring strong product-market fit through rapid iterations and feedback loops. Go step by step. Solve one problem well, then move on to the next.
Highlight your value by talking about the tangible impact – how the solution saves time, cuts costs, drives revenue or improves customer experience. Plus, what is it about the product or service that sets it apart from its competitors? And finally, build trust.
Use AI responsibly and prioritise fairness, transparency and security – this is how you earn partner and user confidence. AI is currently the darling of the tech world so investment opportunities will be plentiful. Choose wisely. Investors should help you think, do and operate and be more than a cheque.”
Paul Houlsby, CEO and Founder of The Perfume Movement
“AI is a powerful tool, but true innovation comes from using it to elevate standards, not just speed things up. Too many startups treat AI as a shortcut, when in reality, its value lies in refinement and pushing boundaries.
At The Perfume Movement, we’ve spent years perfecting our AI through a unique collaboration with fragrance leader Firmenich and panels of luxury niche consumers. We come together to accept, reject, and refine each element, ensuring every detail meets the highest standards in luxury perfumery. After all, AI doesn’t replace craftsmanship; it enhances it.
Equally vital is exclusivity. In a world of mass production, premium experiences set you apart. With Club Privé, we’re not just offering custom AI-powered perfumery — we’re building a community of pioneers who own a stake in the future of luxury fragrance.
For AI startups, the key is clear: focus on quality, refine relentlessly, and create experiences that can’t be replicated.”
Alex Hanson-Smith, Co-Founder and CTO at Inploi
“AI startups must balance innovation with real-world utility. It’s easy to get caught up in the hype — especially as chat and voice interfaces become commoditised — but true differentiation comes from focusing on the user problem first and selecting the right technology to solve it. A chatbot isn’t always the answer. Smart AI design starts with understanding workflows, friction points, and where automation truly adds value.
Beyond that, AI must be trustworthy and explainable. As regulation catches up with technology, transparent data usage, ethical AI principles, and compliance with standards like GDPR and the EU AI Act will separate the winners from the rest. Businesses that can demonstrate clear ROI while maintaining responsible AI practices will earn long-term trust.
Finally, sustainable AI businesses prioritise deep integration, workflow automation, and data connectivity. Building an AI tool is easy — tech giants have commoditised AI, making it accessible to all. But building an AI product that genuinely adds value requires embedding into existing workflows and carefully designing data pipelines.”
Eléonore Crespo, CEO and Co-Founder of Pigment
“In an increasingly competitive landscape, there are a number of things AI start-ups should be considering if they want to innovate and thrive.
First – as with any business – success depends on adoption and driving impact. AI start-ups should focus on solving a real pain-point, listening to their customers and prioritising the user experience. No matter how powerful the technology, a product that’s hard to use or doesn’t meet a need won’t gain traction.
Second, the AI ecosystem is evolving rapidly. To innovate and thrive startups must not only stay responsive to customer needs and technological advances but also embrace a culture of innovation and risk-taking.
Finally, diversity is key. AI teams lacking gender balance risk reinforcing biases. Diverse teams create far more value, and without them, we limit progress. Encouraging women into STEM fields will drive for a more inclusive and thriving AI landscape.”
Dr. Richard Blythman, CSO at Naptha.AI
“For a startup to thrive, it needs more than a great idea. The primary differentiating factors between potential startups that succeed and those that don’t include: timely access to capital, support, and a community that understands the importance of the product.
As a founder navigating Ireland’s startup ecosystem, I’ve learned that securing early-stage funding can often be the toughest challenge a founder can face. Funding routes are often bogged down in red tape and outdated models, creating barriers for entrepreneurs, especially in emerging technologies.
When I co-founded my first AI startup, I faced these hurdles firsthand, pitching to panels that were disconnected from the fast-moving, innovative world of tech. Unfortunately, this lack of understanding can make or break a startup.
From our experience, it is crucial to embrace decentralized funding and foster a collaborative environment. Community backing from local networks and global partners has empowered us and allowed us to push the company forward.
A successful founder therefore must be flexible and open-minded, exploring new ways of raising capital and scaling their business. The skills to pivot, experiment with new strategies and maintain a focus on long-term vision while managing immediate obstacles are critical to navigating the entrepreneurial journey.”
Raphael Allstadt, CEO of tl;dv
“The most important steps that AI start-ups must take to innovate and thrive:
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Clearly understand your strengths and weaknesses
Firstly, in order to thrive and innovate as an AI start-up, it is essential to understand your strengths and weaknesses, as well as what your competitors strengths are.
In a world where it has never been cheaper and easier to build a web app, there are new AI tools constantly being developed, thriving as a business isn’t just about surviving in such a competitive landscape; it’s about leading the way with innovation and what sets you apart from the rest. This means that you constantly need to be evaluating your strengths and weaknesses as a company – asking yourself what is going well, what needs work and how you can push boundaries to make yourself stand out from other AI tools.
In addition, before deciding on a marketing channel, you should understand your competitors’ strengths. Consider what aspects of their business they are prioritising; what are they good at, and how can you do it even better? Knowing what your competitors’ weaknesses are can help AI business owners find their own way to be more effective – it’s not about copying but finding your own way to win.”
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Understand how to be unique
As an AI start-up, it is likely that you are not going to have the same money or resources as your competition – meaning if you are trying to solve a problem for your customers, you can’t fix it by just throwing money at it. This means you have to be smarter and find a way to be different as a business that can’t be easily replicated by others in your space simply by having more of the means to do so.
So, that means focus on things that you can’t just buy with money. For example, developing a unique brand or spending time on a product that serves an attractive market niche, creating a team that is highly skilled, or a community for your product that is fiercely loyal. Whatever it may be, having advantages that money can’t buy makes it hard for your competitors to copy you; if you can’t outspend them, outthink them. That’s how you thrive as an AI start-up.
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Don’t feature follow
If you’re looking to thrive and innovate as an AI start-up, you also don’t want to follow other brands or companies within your space. Instead, you need to spend time understanding what your customers want from you. This means taking time to speak with them directly, so you can find out what their needs are. You then need to quantify these needs and understand and prioritise them in order to create a loyal customer base.
In time, as you develop your product and grow as a business, you’ll understand which customers are best for you from an economic perspective, which in time will narrow down conversations on customer needs and what features you need to develop and prioritise so they align with what they are looking for.
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Assume that your marketing and product will never be perfect
No matter how much work or effort goes into developing a product or business, you need to remember that it is never going to be flawless. This means that when you are planning what you want to achieve, you shouldn’t aim for 100% perfection, because realistically you are never going to get there.
Instead, to grow fast, you should be focusing your efforts on mastering 70% perfection – focusing on the parts that truly matter to your business, such as how you can do more with less and are going to have the biggest impact, instead of getting hung up on the little things that aren’t quite there yet. Learning to compromise while still being good enough, fast enough and smart enough ultimately is better than trying to perfect at everything.
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Move fast
As a business, if you want to thrive and set yourself apart from your competitors, you also need to make sure that you move fast with decisions and simply move on and let things go that aren’t working or serving you anymore.
At the moment within the AI landscape, the game shifts constantly, with something new becoming an obstacle or overnight—which is why it’s so important to be adaptable and not get hung up on things that are going to slow you down, and be ready to embrace change where you can.
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Offer a free plan and great support.
When you are an AI start-up, it’s a fact that your product isn’t going to be perfect. You’ll have things that will need fixing, further development or changing. However, providing options for your customers, such as a free plan or excellent customer service, can help you change the game and position yourself for success.
Offering a free plan can allow your customers to understand the value of your AI platform even if the full version isn’t ready yet. However, on its own, a free plan probably isn’t quite enough; you also want to have a team of exceptional support that will be essential to understanding your audience. They can not only gain real-world insights and feedback, but also learn how people use your service and where it falls short. Essentially, they can be the bridge between your intended product journey and the reality of the user experience and help you work on your long-term success in a competitive AI landscape.”
