[S1.08] AI Business Models Transitions

Business model innovation is constant in this economy. You start with a vision of a platform. For a while, you think there's a line of sight, and then it's gone. There's suddenly a new angle.
- Beth Comstock, a writer, advisor and nature conservationist.

She built a career as storyteller, marketer and innovation champion, as GE Vice Chair, Chief Marketing and Commercial Officer. She was President of Integrated Media at NBC Universal and earlier she held a succession of roles at GE, NBC, CBS and Turner Broadcasting/CNN. She is a Trustee of National Geographic Society and is a former director at Nike and EVgo.

Going through 06 AI Business Models in our series, but right after this series is published, there may be some new AI Business Models is created. This thought is always possible because Business Model innovation is constant in this economy. In the AI field which is changing every day, this eventually is more true.

From our series, we represented 06 different Business Models but we don't lock your business in each of them, there is a huge opportunity to combine or transition between them. As these 06 AI Business Models are focused on the same topic of AI business, so there are a lot of similarities and best practices that you can inherit to develop more and become more diversified in your services. This topic is the last topic of our series of AI Business Models, with a detailed guide and explanation of the art of transition and/or combination.

AI Business Model Blog Series

After years of serving our clients in the AI domain, we are impressed by many different AI approaches to products/services from our clients. So we love to classify them as a Blog Series for AI Business Models, our 1st Blog Series (S1) to bring a summary on this topic and share it with any AI founders, or entrepreneurs out there who dream of building their own AI kingdom. Some may already have their business but they can also refer to market research to grow their AI business.

Series name: AI Business Models, a detail guide and explanation
Series blogs:
- S1.01: AI Business Models Overview
- S1.02: AI Education Business Model
- S1.03: AI Consultant Business Model
- S1.04: AI Development Agency Business Model
- S1.05: AI Software as a Service (AI SaaS)
- S1.06: AI Platform as a Service (AI PaaS)
- S1.07: AI Infrastructure as a Service (AI IaaS)
- S1.08: AI Business Models Transitions (this blog)

AI Business Models Summary

Collecting market statistics of all 06 AI Business Models, we can see a bright picture of AI business, especially in AI Education, Consultant, Development Agency, and SaaS considering the significant growth rate. Again when you invest in any business with a great growth rate, you will get more room to expand your business because the market is growing and big enough for everyone. Continue with this growth rate, your scale speed is will be the success key.

From the market-size point of view, we seeing the 03 huge markets recently in 2024 and forecasted in 2030. These 03 AI Business models have a huge potential with the growth and the market size, and they all continue to grow after 2030.

Another highlight that got the win in all 04 Business Models is the fast-growing Region, all belonging to Asia Pacific. This is not only true with AI Business Models but we believe that similar to other global businesses, the economic eye now is watching Asia Pacific.

Transition use-cases

There is no limitation that we can merge or apply many different AI Business Models at the same time, this is fully depending on your business market and strategy. In this session, we are more focused on sharing some popular and successful transition use-cases which you can refer to as best practices and recommendations.

1. AI Education <> AI Consultant

AI Education and AI Consultant share the same skill set, they both need deep knowledge about some specific AI technologies and products. So doing AI Education, you can have your own brand, and community from your learners, and audiences, then from this network, you can provide AI consultant service and scale your client channel from your great courses, and content.

In a reserved way, you can start with an AI Consultant and support many clients. But this is very hard to scale because your consultant resources are limited. At this point, you may structure and group your consultant experiences and build a learning course with your knowledge and experiences. This can be posted as an online course or organized offline events for sharing this special knowledge.

2. AI Consultant <> AI Development Agency

AI Consultant and AI Development Agency are two business models that share the same group of clients. So this is an expansion of your business line from one to multiple services serving the same client.

As an AI Consultant, you may need to build the Development resources gradually from your projects and grow the team. This transition may be challenging because managing tech resources, especially AI engineers and other skills is new to you and you must learn and adapt to this.

However, from an AI Development Agency, you normally will be an expert in the field after many years of developing AI projects so the most experienced resources from your team will be your Consultant resources. This transition is less challenging in terms of resources but you need to look out to researching for more products, and services and build your partner alien. When you work in the consultant field, it is not a must to use your AI development services anymore, sometimes it is much more profitable and faster for your client to use some ready platform out there. This is more in the consultant mindset which always finding the best solution to your client, not creating new development projects for your own services.

3. AI Development Agency >> AI Education

AI Development Agency's success comes from its resources. This means that their secret success is more on the secret of hiring good resources and providing training, and roadmaps to develop the resources skills, and experiences. From this secret of building their own talents, AI Development Agency can structure to be a training course, that works both online and offline, the list of learners will be a great input to their talent pool.

AI Education, may be rare but still possible. Of course, this means that this transition may need to deal with quite a lot of challenges.

4. AI Development Agency <> AI SaaS <> AI PaaS

The great combinations of these 03 business models form a great AI ecosystem. Sharing the same skillset on the AI talent resources, if you are running 01 of these 03 business models, there is a full opportunity for you to try opening another business model. Again, the market of these 03 business models is super big, a total of $4T  and a great growth rate (around 40% yearly).

Sharing our story at Investidea, we have started our business as an IT Consulting and Development Company. With our investment in AI, we added AI Development Agency to our business lines and slightly adopted AI SaaS and AI PaaS to explore the ocean of opportunity out there in the market.

5. AI PaaS << AI IaaS

The last potential transition is from AI IaaS to AI PaaS, this is actually the game of the big giants like AWS, Google, and Microsoft Azure who play a strong role of providing AI Cloud services. From these clients, it will be easier for them to add a lot of AI platforms as added solutions to enrich their cloud services and increase client engagement.

The reverse side is possible but will be much more challenging, because in the end, investing in Infrastructure is not an easy game to play.

Conclusion

This session is also our last article on the Series "AI Business Models, a detail guide and explanation". We do hope this series captures a good picture of AI Businesses which is actually running in the big AI market. There may have some more Business Models which solve the different client's needs and we will always keep updated on this in our next articles.

From Investidea, we would love to talk more with other AI companies to open an AI Alliance. Together, we can fulfill the diversification of technologies, domains, and user cases, which can help us to grow together, and serve our clients better. Once again, let's connect and support each other in the journey of "Bring AI to life".