What Smart Entrepreneurs Know: Artificial Intelligence & Why It Matters

What Is Artificial Intelligence?

While you might not be able to say exactly what artificial intelligence is, you probably use it every day. From Alexa and Siri to robot vacuums to autopilot, artificial intelligence is everywhere.

The term “artificial intelligence” was created way back in the 1950s by Marvin Minsky and

John McCarthy. These two are the fathers of artificial intelligence and were years ahead of anyone else. According to them, artificial intelligence (AI) is any job done by a machine that needed a human in the past. Simple, right?

While the idea of AI started as something that seems simple enough today, the past 70+ years have changed everything. Today, artificial intelligence is beyond what anyone could have ever imagined.

How Does AI Work?

In the 2020s, artificial intelligence (AI) means teaching computers to do complicated jobs. Creating a type of “thinking” that is adaptable and evolving is the key goal. This is done through algorithms.

Algorithms are a set of rules that tells a computer how to act. Like a serious student, AI learns through hard work. The more work it does, the more it learns. This ability to develop intelligence outside of exact rules is called machine learning. While a computer learning how to work might not seem like a big deal anymore, it’s a serious accomplishment.

One of the core features of AI is its ability to see patterns. Programmers can train an algorithm to guess what comes next. The information given for learning is called training data. The predictions that AI makes are often used to collect test data. This is the data that programmers look back at to decide how accurate those predictions were.

What Is Machine Learning?

You hear a lot about machine learning (ML) because it’s one of the most fascinating aspects of AI. When people talk about machine learning, they are talking about how a computer can learn from examples without needing to see step-by-step instructions.

For the first half of the twentieth century, it was all about teaching basic commands. If someone were to type “hello” into a computer, the ultimate goal would have been to have the computer reply with “how are you.” If someone typed “hi” into the computer, there would have been no reply. The computer would need to be told to respond to both “hi” and “hello” in the same way. Without machine learning, every single request needs to be exact and pre-programmed.

While a person knows that “hi” and “hello” are the same, a computer without AI needs to be told that. With artificial intelligence, a computer knows “hi” and “hello” are the same.

With machine learning, computers learn in a way that is similar to children. Once they are taught one specific rule or concept, they can start understanding countless related topics. You might teach a child that matches are dangerous, and they will quickly understand that also means that lighters, bonfires, and all types of open flame are dangerous. Without this type of adaptive intelligence, you would need to explain each and every item separately.

How Is AI Different from Machine Learning?

People often confuse artificial intelligence and machine learning. They use the words interchangeably as if they’re exactly the same thing, but there are some important differences to note.

While machine learning is artificial intelligence, not all artificial intelligence is machine learning.

Artificial intelligence is the general term for all types of software that can solve problems on its own. Meanwhile, machine learning is a type of algorithm that allows a computer to learn as it collects data.

Machine learning is only this specific subgroup of AI that allows machines to learn from past data without being programmed. Though not all artificial intelligence uses machine learning, it is a core component.

Machine learning works to bring artificial intelligence to its ultimate goal: to create a computer system that solves complex problems like a human.

Everyday Use of AI

You’ve probably used Siri on an iPhone or said “Hey, Google” into an Android. Maybe you’ve asked Alexa about the weather on an Amazon device or tried Microsoft’s Cortana. This means you’ve used AI.

While we joke about how our device can’t understand our different accents and sometimes strangely worded questions, this technology is way more impressive than we might realise.

Every day, AI becomes more advanced. Look at something like Google’s Continued Conversations. In the past, you might have asked Google “what is the weather?” To find out about tomorrow, you needed to say, “What is the weather for tomorrow?” That’s to say that you had to repeat the keyword, “weather,” in a way that you wouldn’t do in a natural conversation.

Today, you can say, “What about tomorrow?” If you think that’s a simple change, you don’t work in tech. Having AI understand you when you don’t say “weather” and “tomorrow” in the same sentence is a very big deal.

And, it’s more than just understanding us when we talk. Today, technology like Google Lens can look at a piece of art and tell you who painted it. Want to translate cooking instructions from Chinese into Hungarian? Easy. Need to see what kind of flower you’re looking at? Done. Processes that would have required hours of research at a well-stocked library can now be done in seconds by a child.

The Future of AI for Business

To better understand the future of artificial intelligence, we sat down with Max Kuznetsoff, the Idea Factory’s data scientist specialised in algorithmic trading and quantum algorithms. We asked him for an insider’s look at the latest and greatest new tools. Here’s what he had to say.

What is the next big thing in AI?

Right now, one of the most exciting things about artificial intelligence is its potential ability to recognise human emotions. Imagine being able to communicate with a digital assistant who knows and understands you better than your friends and family. This is “someone” who would be able to share your experiences and offer advice, without compromising your privacy. This kind of virtual therapist will understand the entirety of the psychological characteristics of your personality and offer a clear and holistic answer to any and every question you might have. It’s like an advisor who knows you better than you know yourself.

What kind of AI is most useful to startups?

For startups, artificial intelligence lowers the cost of every process as it can do nearly anything. It will no longer be necessary to hire a large staff of employees, which has always been a major obstacle to smaller companies. In the future, having only a small staff alongside robots and artificial intelligence programs, startups will be able to perform at the same level as global corporations.

For entrepreneurs who want to start a business, what are the best AI tools to use?

At the moment, if I wanted to start a business, I would use the capabilities of chatbots to organise and conduct sales while also automating the service process. Chatbots allow you to automate a huge number of processes and greatly reduce the cost of each current and potential client. I would also use predictive analytics systems based on artificial intelligence to analyse the market and optimise business strategy.

How Are Businesses Using Artificial Intelligence?

Using artificial intelligence at home to vacuum your floors or find the song stuck in your head is child’s play. What about at work? How can AI help you get ahead? From making workers more productive to making workflows simple, AI can do more than you might realise.

For your customers, it’s a smart way to make products personalised. A store can make recommendations based on what shoppers looked at in the past. Robotic process automation (RPA) can make every step from finding customers to delivering products simple.

Ever have a question about your Amazon order? You might have been talking to a bot. Amazon uses chatbots to offer 24/7 customer service. For customers, it means easy answers. For the company, it means happier customers, lower costs, and more profits.

Or maybe you’ve bought a car. If so, there is a good chance that artificial intelligence tested the product for you. Improving quality and lowering costs in manufacturing is another thing that AI is perfectly suited for.

Business Benefits of Artificial Intelligence

Want to do more with less cash? Welcome to the world of business! Here’s what other smart entrepreneurs are doing.

  • Save time: Automation is one of AI’s biggest strengths. Why waste time with simple tasks a robot can do? Spend your valuable time on big questions and long-term planning. Customers asking the same old questions? Send them a bot and don’t leave them waiting.
  • Save money: On top of dealing with customers, AI can make it easy to analyse customer data for better-than-human insight.
  • Reduce error: Believe it or not, robots make fewer errors than humans. Not only do they work 24/7 but they produce better results.
  • Long-term insight: Seeing into the future is AI’s strongest suit. From assessing market changes to predicting business trends, robots can see billions of points of data in no time. For informed decisions, AI is impossible to beat.

Artificial Intelligence for Startups

Need to do more with less? AI is a dream for smart businesses in the start-up stage. Here’s a quick run-down of what smart entrepreneurs are doing with AI.

AI business management tools:

  • Email categorisation
  • Spam filters
  • Voice to text typing
  • Predictive personal assistants
  • Automated 24/7 customer support
  • Sales forecasts
  • Security management

E-commerce tools:

  • Smart searches
  • Customer personalisation
  • Product recommendations
  • Fraud detection
  • Price optimisation

Marketing AI:

  • Personalised customer news feeds
  • Ad targeting and optimisation
  • Automated web updates
  • Predictive service to customers

AI Trends in Business

From Alibaba’s Hema stores in China to Amazon’s Go locations across the United States and the UK, even brick and mortar stores are going high tech.

While this scale of technology might be out of reach for smaller businesses, there are simple solutions that can transform even the smallest startup. Whatever the industry, there are countless ways to improve the customer experience.

Even salons, which have had the same basic business model for generations, are getting in on the action. Artificial intelligence like SalonAI offers customer-friendly options for small businesses to manage appointments, target customers, and upsell services.

Why Bots Are Essential to Businesses

Why is artificial intelligence important in a hair salon? Because customers want it and, increasingly, they have come to expect it. In the world of personal services, 89% of customers prefer to have a chatbot, and that number is even higher amongst millennials. Very few people want to fill out a form on a website, email, or call a receptionist during business hours. Being able to send a message and get a quick response is becoming the norm. This convenience can be the difference between gaining a new customer or seeing them go for a more convenient option.

While years ago there was a focus on talking to a real person, those days are long gone with the incredible improvements in tech.

AI in E-Commerce

Small businesses are seeing major returns on small investments. This is especially true in the world of e-commerce. AI solutions that understand natural language are game-changers. Simply adding an autocomplete feature to the search bar has been shown to increase sales by 24% in online retail stores.

Intelligent product recommendations make customers three times more likely to buy. That is why all of the most successful online retailers will offer recommendations on their sites.

Take the case of the small wine startup in New Zealand, Fine Wine Delivery. Shopping for wine and other spirits is notoriously difficult and that makes selling it challenging. Their customers didn’t know what they wanted and had no idea how to know what type of products they might like. AI made it easy. Using IBM’s Watson artificial intelligence, they’ve transformed the shopping experience.

Using their smart search bar customers can search for wine without being an expert. They can simply say they like dark and spicy wine and have a budget of $25. They can browse fresh and floral gins that are popular. Customers with specific questions can talk to the virtual assistant, Jeff.

On top of increasing sales, these kinds of AI can save money. By looking at sales data and seasonal trends, AI can find trends and make predictions. This makes managing inventory easy and saves an incredible number of staff hours. Knowing what customers are going to buy lowers inventory costs by 10% or more for the average business by preventing overstock.

Artificial Intelligence vs Machine Learning vs Deep Learning

The final layer of artificial intelligence is deep learning. This is a particularly exciting piece of artificial intelligence because it goes beyond human capabilities and completely changes what is possible.

While machine learning uses algorithms to constantly collect data and improve over time, deep learning takes things a step further. Deep learning works with layers of neural networks.

Neural networks, or artificial neural networks (ANNs) as they’re called in AI, are sets of algorithms designed to work like a human brain. These ANNs are a type of machine learning that is able to work with huge amounts of data.

Takeaway Message

Whether you need a therapist or are trying to improve your brand’s customer service, the future is in artificial intelligence. Understanding the power of AI is the key to success in countless areas of life and business. It’s essential to have a basic grasp of the layers of machine learning and deep learning that are creating the future of the world.

Following trends or, better yet, getting ahead of the curve on the latest AI technology is a powerful asset in every sector. So, what can AI do for you?

Original research by Idea Factory. Join us today to become part of the future of business.

https://t.me/ideafactory1

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The Idea Factory is a unique and interactive startup community where you can go from zero to hero. Oh, yeah, and it’s free. http://t.me/ideafactory1

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Idea Factory

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The Idea Factory is a unique and interactive startup community where you can go from zero to hero. Oh, yeah, and it’s free. http://t.me/ideafactory1

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