Scoring with AI not enough to crack US enterprise code
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Indian artificial intelligence startups, which are making a beeline to the US to be close to customers, are taking longer to conclude deals and run pilots with US enterprises, amid rising competition and changing business landscape, founders and investors said.These startups are looking at strategic partners and investors who have deep enterprise networks and can help them connect with potential customers, they told ET.In SaaS, where the market had evolved and people were buying, founders were able to get a couple of customers through emails and messages, but in the AI world, confusion is high even for buyers, Accel India partner Shekhar Kirani said. 'So, they need assistance at least for the next 12-24 months, when it becomes obvious that the products work.' Enterprise sales have always been hard and required the founders to work on-site to gain trust.In the last couple of years, AI has changed the landscape by drastically bringing down the time taken to develop a product. This has resulted in proliferation of AI platforms and applications, cluttering the market, increasing competition and changing the enterprise sales dynamics.Pradeep Ayyagari, cofounder, SnowMountain AI , an agentic AI platform for banking and financial services, said with AI coming in, the time taken to close the deals have increased significantly, with some companies going as far as getting into code-level discussions to gain trust from customers.'Earlier it would take 6-9 months to get a signalling from a company, if they are interested in the product or not. Now that is taking 12-18 months. Even getting demos is hard now,' he said. He explained that more often than not enterprises are running multiple pilots and are beginning to put new pilots on pause till they have time.Venk Krishnan, founder of NuWare, a US-based IT services company, said during his conversations with the chief information officers of large enterprises in the US, he has found that they are often seeing over 20 companies that are selling similar products and hardly have time to have a demo with each of these firms.Recently, Vivek Khandelwal, cofounder of agentic AI solutions startup CogniSwitch , was in the market for a security compliance product and said he was confused.'This market is equally miserable for buyers. We are at a point where we have to flip a coin and go with whoever it is, because there are so many products and everyone's messaging is exactly the same,' he said.Khandelwal went ahead with a company that was known to him. But he agrees that the market is tough.Gaurav Agarwal, cofounder of Raga AI, which offers an agentic workflow testing platform, said though building enterprise-quality products is tough, the field has become noisy, confusing the buyers as well.To navigate this challenge, founders are looking to partner with investors and domain experts that can help with this.Ayyagari of SnowMountain AI said his company has partnered with domain experts such as former banking executives to get customers onboard.Sanya Abbey, founder of an AI startup catering to the banking and financial services companies, said she partners with strategic investors in the US that can make warm introductions.NuWare's Krishnan, who also runs investment firm NuVentures, said they are helping their portfolio companies with customer introductions, which are now becoming critical and a key differentiator as companies look to break into enterprises in the US.Alok Goyal, partner, Stellaris Venture Partners, said customer introduction is one of the most critical help portfolio companies need as they search for a product-market fit and early traction in an increasing competition for enterprise deals.While founders and investors are navigating a dynamic business landscape, there are other challenges as well.Unlike previous tech cycles, speed is the moat in AI, as the technology evolves at a rapid pace. This means startups need to iterate fast and that is one of the reasons founders are moving to the US.Abbey, who was cited earlier, said she flies in and out of the US to be closer to customers and iterate fast.Stellaris' Goyal said many enterprises are in a wait-and-watch mode as continued competitiveness of existing solutions is questionable with underlying technology evolving so rapidly. In addition, amid the uncertain macroeconomic environment, investments are being postponed; this presents a challenge as well.
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