Mapping THE NEW: AI's hidden market in Small and Midsize Companies

Finding meaningful patterns in the gaps between enterprise AI and SMB needs

I’ve been quietly working with a few select companies to understand how they could benefit from AI. From the start, I knew I wanted to focus on small and midsize companies because they are an underserved clientele, despite being the type of companies that could potentially benefit the most from what AI has to offer.

Large-scale organizations are always attractive potential customers for transformational technologies, but small companies often fall through the cracks. The basic assumption is that they lack the capital to do anything substantive and that the customer acquisition cost would be too high to justify pursuing them. While these assumptions aren’t entirely wrong, they haven’t been relevant to what I was trying to achieve: learning how AI can actually make a meaningful contribution. In fact, small companies have been easier to understand and map out, and the insights I gained from collaborating with them are transferable enough to be relevant for midsize companies.

Midsize companies are a tricky case. They are, with some variations, the backbone of most industrialized countries, and yet they are often overlooked by large-scale providers of new technologies. They are underserved by SaaS systems, which tend to fall short because integrating them into legacy processes and technologies still requires significant investment from the midsize company. Worse yet, these systems often lack the adaptability needed to meet the specific requirements of midsize businesses.

Thankfully, you don’t have to take my word for it. Vaughn Tan wrote extensively on AI and meaning-making, and his latest article focuses on the same point I’ve made here: midsize companies are underserved. He draws insightful parallels to the German Mittelstand, reminding me of a piece I wrote in 2013, later adapted for the World Economic Forum in 2014, on What Germany Can Teach Us About Sustainable Startups.

Too few startups are focused on building translational AI applications that make a tangible, immediate impact on the existing processes of medium-sized firms. This is a major market opportunity that almost no one is systematically exploiting.

This is an exciting opportunity to do substantial work. It’s exciting because it offers the chance to build new products and processes that help small and midsize companies bridge a gap that existing technologies haven’t been able to address in the same way. I’d love to explore how AI can be integrated into your current efforts!