The emergence of AI in the global market has significantly transformed the business world. AI can now replace simple routine tasks and even some complex tasks. Many industry leaders have discussed AI implementation: business mistakes and opportunities to advance it in favour of businesses. Sergey Tokarev, the co-founder and partner at Roosh Ventures, shared three effective approaches to enhance businesses.
The entrepreneur compared AI use to creating a website: through trial and error. He highlights that failure and setbacks are a natural part of both business and life. The real issue arises when the same mistakes lead to repeated failures. Sergey Tokarev believes these errors can be transformed into valuable lessons, and AI offers powerful tools to make this transformation possible.
The businessman identifies three effective approaches to leverage AI for a business.
Identifying Cause-and-Effect Relationships
According to Sergey Tokarev,one of AI’s greatest strengths lies in its ability to identify complex, non-linear connections. He exemplifies a drop in sales which might be attributed to decreased demand or pricing issues. AI, however, can uncover unexpected correlations—such as the influence of weather, emerging trends, local nuances, or geographical factors.
This ability to detect subtle patterns is what powers Netflix’s recommendation engine, which keeps users engaged for hours. A similar approach can be applied to analyzing sales trends, production workflows, logistics, and much more.
Building an “Institutional Memory”
While the first method focuses on immediate issues, this one involves learning from historical data. Sergey Tokarev notes AI can thoroughly analyze the company’s previous successes and failures using defined parameters. Then, it identifies patterns and gives suggestions on strategies tailored to a specific context.
As an example of such an approach, the entrepreneur mentions UPS’s ORION. It integrates AI into logistics operations, analyzing customer data, route maps, pickup schedules, and historical performance to optimize delivery routes. This has enabled UPS to cut travel distances by millions of kilometers annually.
Tuning Into Customers
Sergey Tokarev notices that this approach is particularly effective for B2C businesses. Customer interactions—whether through sales teams, chatbots, or reviews—contain valuable insights for identifying and addressing mistakes. AI can extract insights from all communication channels to help refine the business.
The businessman underlines that AI is not a substitute for human oversight. Considering the case of Zillow’s real estate division, Zillow Offers, it can not perform properly without human intervention. It relies solely on algorithms to predict housing prices, and without humans, the system fails to adapt to unforeseen events like COVID-19 and labour shortages. This leads to massive losses, layoffs, and the division’s eventual shutdown.
AI offers incredible opportunities to learn from mistakes, but it is equally important to learn from others’ missteps. Striking a balance between AI-driven insights and human judgment ensures the best outcomes.