At this year's Upper Bound conference, AI researchers, engineers, and entrepreneurs gathered to share the latest advancements and opportunities that artificial intelligence offers in their fields. 

This year’s “AI in Startups” track highlighted how artificial intelligence is creating new opportunities for startups and helping teams become more efficient. It’s also changed the economics of startup companies, offering new paths for sustainable growth.

The Art of Early-Stage Investing: A Decade’s Worth of Insights

In her session, Janet Bannister, founder of Staircase Ventures, shared insights from her career as a founder and investor, emphasizing that a startup's most critical asset is its team and their mindset. Known for her success in launching  Kijiji,  Bannister shared insights for founders looking to succeed in today's landscape. Bannister stressed that in the past, having a clear, long-term competitive advantage could be the software they built. But now, software is easier to replicate.

Data, she argued, is much more durable. Proprietary data is difficult for competitors to copy.

Bannister also highlighted a significant shift in the startup lifecycle, driven by AI. By leveraging AI tools for things like marketing, code development, and accounting, startups can grow much more quickly and cost-effectively. And that’s changing the way funding works.

 "What we're seeing right now is companies that are raising a pre-seed and seed rounds and using that capital to get the cash flow positive," she explained. The funding environment has recently been “rocky,” she noted, and many startup founders are using AI tools to grow more efficiently, meaning they are much less reliant on later rounds of funding to reach a sustainable company.

“ This was almost unheard of just five years ago,” she said.“A lot of founders just don't want to count on follow-on funding. They don't want to bet the future of their company on getting that Series A round [of investment].” 

AI Startups in Retail

In a panel discussion, founders Melanie Morrison of Better Cart Analytics and Grant McDonald of Bobo offered an on-the-ground look at how AI creates opportunities for startups in the retail sector. Both founders shared their key success metric in using AI in retail: make sure it is not a gimmick. Instead of including AI for AI sake,  use it to solve specific problems and provide meaningful value for customers. 

Morrison noted that her company, which provides competitive intelligence for the grocery industry, builds its insights from over 55 million data points a week — a task that would be nearly impossible without machine learning. Morrison explained that this allows them to provide real-time insights on pricing and promotions, enabling smaller brands to compete with giants in a low-margin industry where manually tracking competitors is impossible.

Grant McDonald explained how his parenting app, Bobo, uses AI to create a "digital village" for parents. The app collects complex data—from a child's developmental milestones to a family's social cues—to provide insights and connect parents with expert services or relevant products. 

Both founders agreed that while their businesses are fundamentally different, their success hinges on using AI to distill overwhelming amounts of data into targeted, valuable insights. McDonald noted that his company was originally hesitant to use AI until they could make sure they could use it to add value for the customer. “Not just so that we can slap it on a pitch deck or our website or charge a little extra money,” he said. Instead, they made sure the addition of AI to their platform added actual value.

Both Morrison and McDonald also noted that using AI tools and strategic partnerships with organizations like Amii has allowed their startup teams to remain lean at a critical time in their growth. “You can do incredible things with small numbers of people if they're talented,” Morrison said.