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AI-Native vs. AI-Infused Products

Knownwell

With AI seemingly everywhere, how can you distinguish between true AI-native products and AI-infused ones? And how can understanding the distinction impact your business and AI strategy in the first place? The AI Knowhow team gives answers to these questions and many more on Episode 52 of the show, plus Pete Buer talks with Peter Armaly of Valuize about his new book called Mastering Customer Success.

But first, let’s do a little table-setting on AI-native vs. AI-infused products.

What Are AI-Native Products?

David DeWolf kicks off the discussion by explaining AI native products. “AI native means that from the ground up, from the very, very beginning, the product has been built to leverage, depend upon, and take as a primary aspect the value proposition of artificial intelligence,” he notes. Essentially, AI native products are designed with AI at their core, free of constraints that often limit the innovation of traditional, non-AI products.

Mohan Rao elaborates, emphasizing that AI native products integrate algorithms and data as fundamental components of their value creation right from inception. This allows for a blank canvas approach, spurring greater innovation and functionalities that are deeply embedded into the product’s architecture.

What Are AI-Infused Products?

In contrast, AI-infused products are existing products upgraded with AI features, or as Courtney Baker describes them, “SaaS products with a sticker on it.”

David points out that these products often involve layering AI technology onto traditional software, which creates certain limitations. Mohan adds that these products generally work within the boundaries of the existing data in the software application. They may offer valuable automation and enhancements, but they lack the foundational AI integration that characterizes AI-native products.

Real-World Examples

To clearly illustrate the difference, the team discusses some real-world examples. Adobe Photoshop, enhanced with AI for image editing, serves as an example of an AI-infused product. In contrast, Midjourney, an AI-native platform, enables creative image generation and manipulation using AI from the ground up. Both tools are geared towards image creation but approach the problem from fundamentally different angles.

Mohan also highlights the differences in transcription services as an example to illustrate the difference. Traditional transcription services now must compete with AI native, real-time transcription tools. The latter may not yet match the accuracy of human transcription, so it may not be suitable in areas like legal. But it does offer real-time processing and additional functionalities, like generating summaries and to-do lists, that create new value.

Choosing Between AI-Native and AI-Infused

Courtney poses an important question: How should businesses decide between AI-native and AI-infused products? David suggests considering whether the business process being addressed requires a proven, reliable solution or if there’s a need for a cutting-edge approach to future-proof the business.

Mohan advises that if an existing, data-driven SaaS application meets your needs, an AI-infused product might suffice. However, for those pursuing new, innovative value creation, AI-native products could offer significant advantages.

David cautions that while AI native products can offer future-proofing, they also come with risks. “There are going to be a lot of companies that make the wrong bets and get it wrong, too,” he says. For businesses, this means balancing the potential for innovative advantage against the risk of investing in a product that might not stand the test of time.

Expert Interview: Peter Armaly on The Future of Customer Success

The episode concludes with a discussion with Peter Armaly from Valuize, who discusses how AI can revolutionize customer success. By predicting customer needs and providing intelligent guidance, AI can help organizations retain customers and reduce churn, especially in SaaS models.

“You have to be able to provide guidance at the time that customers need it, and ideally even before they need it,” Peter says. “If you understand their needs and what their experience is at the point in the journey that they’re in, you can provide information for them to help them avoid problems that other customers are having at that point.”

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