The lesson learned with Command AI

The odds of starting your business with paradigm-shifting aspirations and actually succeeding are lower than most founders realise.

It’s a lesson I had to learn myself. Four years ago, my company, Command AI, which has recently been acquired by Amplitude, started as a product called CommandBar that plugged into other software and let users search the software using natural language. We felt that most software products were, and still are, too hard to use and we felt CommandBar solved that problem. We imagined a future where this search function would become a new universal building block for interfaces. We were creating our own category. Then we got stuck. We found moderate momentum (exciting customer wins, good revenue growth, strong Series A funding) followed by the realisation that it wasn’t scalable.

The company’s growth only took off when we stopped trying to create a brand-new category and started competing within two existing ones: chatbots and “digital adoption” software (aka pop-ups-as-a-service, or software that allows you to put pop-ups on your website).

Once we changed tack, our revenue growth rate doubled, and growth became much more effortless. We’ve been able to take our original vision, “make software easy to use”, and connect it to people who care. Debunking the myth that startups can’t succeed if they look too similar to other companies has never been more important. The emergence of generative AI as a foundation technology offers up a more straightforward playbook for category disruption than ever existed before. Here’s how we did it.

Avoiding the trap of irrelevance

Let’s say I’m building sales software, and I have a point of view about how to help salespeople close more deals by being more organised. I have two options: I can compete in the customer relationship manager (CRM) category and build a product that specialises in organisation, or I can create a category by building a sales platform that lives alongside the CRM.

In order to pull off the first option, you need a product – a differentiated replacement for general purpose CRMs like Salesforce – and marketing to stand out from the noisier players in the space. The second option seems a lot less daunting, as you won’t get squashed by incumbents. But, at the same time, you risk irrelevance with this second option – with huge amounts of time being spent on trying to convince and educate buyers about your product’s value and viability.

These problems are exactly what we faced at Command AI. We tried to educate the market in so many ways, but it always felt like we were limited to customers who were explicitly looking for new user interface tools like our search product.

To combat these problems, we instead asked ourselves: “What have we learned about the existing tools that try to solve the same high-level problem we’re solving?” Our conclusion was that those tools were, well, annoying. Take customer service chatbots. They always respond with long passages of text. We decided to build one that could browse alongside users with its own cursor to demonstrate how to do things, like a tour guide. It was the same insight with a different product, and suddenly we had competitors – but also a lot more people who cared.

Roadmap for building an AI startup

Here are the steps I would follow on day one as a founder aiming to disrupt an existing category.

Step One: decide on the category

If you stop creating a category and start disrupting one, you’re presumably accepting competition in exchange for guaranteed demand. But you should look out for warning signs before making the switch.

The first red flag is if the demand isn’t there. If you enter a declining category or cater to yesterday’s trend, you’re getting the worst of both worlds: no demand, plus built-in competitors. The best sign that there’s room for a billion dollar company to be built in a category is the pre-existence of a billion-dollar company already there.

Secondly, you want to avoid categories that are too “solved”. They’re too hard to enter, too crowded, and the customers are too satisfied. To find a good category, there should be some level of dissatisfaction with the incumbents.

Step Two: create a valuable product

You've picked the category and created the dartboard of your competitors. Now you need to build a viable product to replace theirs. Here’s how:

• Build the stuff that checks boxes, even if they’re not particularly cutting-edge. It’s not clear until you speak to customers which features they actually use. So build something that seems viable, market it, do some demos, let your prospective customers point out what you’re missing. You can’t build a competitive product without the feedback loop of sales cycles
• Where possible, eliminate functionality that some of the market doesn’t care about. At Command AI, we chose to compete only on the chatbot itself instead of the software that lets humans talk to users, too. So we’re competing in a more narrowly defined slice of the category that requires us to build less to be a substitute for others
• If you have built an AI-first company from the very start – as we did with Command AI – take shortcuts that your lagging competitors cannot. The most obvious example is to lean heavily on prompt interfaces instead of traditional button-and-menu-laden interfaces.

Step Three: make your mark in your chosen category

Creating a category means your product is a novelty that people pay attention to. To disrupt an existing category, you need to tell your customers:

• That you’re here to stay: It may sound obvious, but to compete in an existing category, you have to say you are part of it. At every opportunity. Include the category name at the top of your marketing site, come up with a tagline that references the category, ask to be included on every venture capitalist’s market map for the category
• What you see as the main problem of the category: This is the first step in positioning yourself to disrupt a category: State the problem nobody else is talking about. As a startup founder with fresh eyes, you’re the only one in a position to do so
• How you’re solving this problem: If you’re articulating a novel problem, you should have a credible solution for that problem. This is why AI is so powerful for category disruption. It lets you build differentiated solutions. A lot of buyers are open to the idea that AI is cool and makes products better, so if your differentiated marketing message includes claims about how AI makes your thing better, they are probably more likely to land than other claims (all else being equal)

On your founder’s journey, remember that the path to success often doesn't lie in creating shiny new categories. Instead, focus on building something that lasts by identifying problems in existing categories, understanding customer needs better than anyone else, and being ready to pivot as the market inevitably evolves.

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