Genuine vs. Generative: Is AI Going to Work for B2B?

Issue 007

Feb 01, 2023

Welcome back to Surfacing, a monthly newsletter from Emergence Capital. Subscribers receive the most relevant news, thoughts, trends, and jobs in the B2B SaaS ecosystem each month.

🔦 FEATURED CONTENT

Generative vs. Genuine: Why Today’s Generative AI Isn’t Tuned for B2B

By Gordon Ritter & Jake Saper, General Partners at Emergence

2022 was a year that personified AI. Many of us had moments last year playing with ChatGPT and DALL-E where we saw the future. Some applications were more practical, such as students getting help with their homework or software engineers de-bugging their code, while some were more fun, such as asking the model for a new mac n’ cheese recipe or chatting with dead celebrities.

While these applications have strong potential for consumer audiences and new marketing techniques—as evidenced by the fast growth of companies like Jasper AI—we don’t believe that generative AI alone will have the same impact in most business applications. Why?

Generative AI today isn’t genuine; it isn’t consistently accurate, it isn’t outcome-tied, and it isn’t context-specific. While those limitations aren’t likely to be blockers for B2C, B2B applications have a higher hurdle to clear.

That said, generative AI will play a critical role in solving business problems. Paired with context-specific models and human influence, this new technology will create a step change in our ability to change the way the world works.

Generative AI has broad, generic value… and some risks

Generative AI is a foundational tool to help us with drafting—whether words, images, or code—and it has the reciprocal value of helping us condense and summarize. It will help us to save time and generally improve our communication, whether in our personal or work life. But if we rely on it too heavily, we’ll run the risk of sounding generic and, often, wrong.

Since 2016, we’ve called this a potential risk of AI “crutch software”. Our Coaching Networks thesis has been based on the premise that “humans are the only mutation engine in the age of AI.” Generative AI will test our abilities and willingness to create and expand on its baseline or just rest on its recommendations.

With this context, let’s dive into the particular limitations of generative AI in business applications…

🚀 GO-TO-MARKET ADVICE

New buyer on the block: The CFO

From Doug Landis, Growth Partner at Emergence

In today's environment, there’s a new buyer that you need to win over: the CFO. CFOs are commonly referred to as "CF-NO's," and I'd argue that's even more true today.

Why? They are risk averse by nature. Let's face it, rarely is there going to be true ROI like hard ROI. You're more likely to have soft ROI such as saving time, which is hard for CFOs to latch on to. So what do CFOs care about? CFOs are mainly concerned about cost reduction across the board. Thus, focusing on the cost-saving aspects of the product or service you’re pitching will more often than not be your main consideration. But don't assume that they care solely about cutting costs.

The reality is the CFO will always have a topline metric that they want the entire organization to drive toward. This could be initiatives such as driving revenue or mitigating risk.

What CFOs really want is visibility across the entire organization. They want to see what each department is doing to drive the strategic initiative. To sell effectively to the CFO buyer, you need to find out what that initiative is and then objectively align your conversation around how your solution will help.

If you have any questions, please reach out to doug@emcap.com.

🔗 TRENDING TOPICS

What we’re reading at Pier 5

AI switches into “bad actor mode.” In an experiment, scientists at Collaborations Pharmaceuticals instructed their AI model to seek out toxicity rather than weed it out, and the result was 40,000 new possible chemical weapons. This is an excellent (and scary) example of the dangers of generative AI if used with malicious intent.
Economists are arguing that we’re approaching a decline in the nice-to-have economy, an era that peaked at the height of the pandemic. While this is especially true for consumer-focused businesses and startups who sell luxuries such as rapid grocery delivery and personalized fitness, we expect to see a similar trend on the B2B side as well.
When it comes to writing job descriptions, ChatGPT has significant race and age bias. This is because the language model underneath ChatGPT likely has weaker training data on race and age.
Intellectual property is the strongest moat for startups. To defend against copycats and limit exposure, IP experts urge founders to protect their IP sooner rather than later.
Farewell AI-generated college essays. OpenAI just launched a new classifier to help ID AI-written text in an effort to cut down on academic dishonesty and automated disinformation campaigns.

📰 PRESS

Our team featured in the news

Fast Company | The biggest tech trends of 2023, according to over 40 experts featuring Santi Subotovsky

💸 PORTFOLIO NEWS

Congrats to Ironclad (#5) and Forma (#38) for making Glassdoor’s Best Places to Work 2023 List.

And congrats to Zoom (#14), Blend (#38), and Crunchbase (#72) for making the Built In 2023 Best Places to Work List.

Digital Air Strike rebranded to DAS Technology and acquired its seventh company, Autovate. Congratulations, DAS team!

Box CEO Aaron Levie on the biggest factors that will shape software, featured in Inc.

🔮 PORTFOLIO JOBS

Looking for your next role?

Check out the open opportunities at our portfolio companies.

G&A & Operations

Alchemy: Finance Operations Lead (NY or SF)
Bill.com: Litigation Lawyer (San Jose)
Gusto: Controller (Remote)
project44: Commercial Counsel - EMEA & APAC (Krakow, Poland OR Paris, FR)

Eng, Product & Design

Bill.com: Senior Director of Product: Card Payments (San Jose)
Gusto: Head of Product Marketing & Revenue (Remote)
ThreeFlow: Director of Data Insights (Remote)
Top Hat: Director of Information Security (Toronto, Remote Canada or US)

GTM & Business Operations

Chainalysis: Director of Chainalysis Academy (Remote)
Regal: Director of Demand Generation (NYC)
Salesloft: Senior Director, Customer Success (Atlanta)
Xapo: Head of PR (Remote)

We have ~894 more jobs on our portfolio jobs site. Check them out!