The world of entrepreneurship has been transformed in a big way by the emergence of artificial intelligence. The numbers speak volumes. In 2023, AI startups worldwide raised an impressive $50 billion. And in Q1 2024, they had already scored $11.4 billion, roughly 17% of the total global funding.

Investors definitely have a soft spot for AI, which explains why it’s still attracting hefty financing during the venture capital winter. It’s no wonder that at Y Combinator demo days in 2024, a whopping 172 out of 247 projects were all about AI.

The AI boom — from niche to must-have

AI has come a long way from its days in science fiction and academia. What was once considered niche and impractical has blossomed into a massive industry. Whether it’s voice-activated assistants on our phones or recommendation algorithms that help us shop online, AI is now a vital part of our routines.

Generative artificial intelligence is the talk of the town, thanks to user-friendly programs like Google’s Gemini (formerly known as Bard) and OpenAI’s ChatGPT. This surge in popularity is expected to skyrocket the Gen AI market to a whopping $1.3 trillion by 2032, up from a modest $40 billion in 2022.

But it’s not just consumer products — in heavily regulated sectors such as healthcare, finance and government services, Gen AI opens up unprecedented opportunities to automate tasks and synthesize data. Take, for example, HCA Healthcare, one of the world’s largest healthcare providers, which is using it to speed up the process of drafting medical notes. And Moody’s, the financial ratings agency, has rolled out its Gen AI Research Assistant to help customers uncover fresh insights from credit research, data and analytics.

Startups are eager to leave their mark and bring innovation to the table. According to Tracxn, there are over 67,000 AI and machine learning projects, along with more established AI firms globally. The next wave of AI enablement market players is already emerging. Startups assist with Large Language Models training, deployment and evaluation, as well as tackle critical AI concerns, from preventing hallucinations to addressing ethical dilemmas.

The big question is, how do you stand out among this sea of competitors and avoid getting lost in the crowd?

Related: 4 Ways to Build a Successful AI Startup

The PR pitfalls to dodge in a crowded market

Effective public relations has emerged as a make-or-break factor for AI projects in a hypercompetitive environment. Yet, despite its importance, many startups miss the mark on PR, unknowingly sabotaging their efforts to attract and keep customers. These are the most common mistakes they make.

1. Putting all eggs in the product basket

Having cutting-edge tech isn’t enough to guarantee success anymore. Startups tend to assume that their product will naturally speak for itself. Sure, having a superior AI solution is crucial. However, neglecting the importance of strategic promotion and brand building can be a costly oversight.

To catch attention, AI projects should take the lead in engaging with their target audience. This means reaching out to potential customers through various channels, like social media, platforms such as Product Hunt and popular media outlets, including Forbes, TechCrunch, Entrepreneur and many others.

But it doesn’t stop there. In a truly competitive environment, it’s essential to stand out from the crowd. Following the same old routine as everyone else won’t do justice to your offering. One effective way to differentiate yourself is by not only growing your company’s brand but also your own personal brand as a founder. Your reputation is the bedrock of your influence, which can sometimes hold more weight than the product itself when it comes to attracting investors or partners.

2. Neglecting audience analysis

Another common mistake that many AI startups stumble upon is forgetting to personalize their communications for different audiences. Some projects go for a “one-size-fits-all” approach, hoping to catch everyone’s eye. However, this broad strategy often waters down the message and misses out on opportunities to connect with potential customers as well as investors.

Imagine there’s a startup developing AI-powered chatbots, aiming to serve both companies and individual users. However, in their PR efforts, they’re only talking about personal content creation. They’re overlooking enterprises by not highlighting how their product can assist in preparing marketing strategies and descriptions. Similarly, some AI projects might use complex jargon that only appeals to tech enthusiasts, instead of crafting compelling narratives that resonate with everyday users.

To avoid falling into this trap, market players need to conduct thorough research, segment their audience based on relevant criteria like industry, demographics and pain points, and adjust their PR strategies accordingly. As I’ve mentioned in another article, think of your business like a Rubik’s Cube. Just like the cube’s various colors, your company can be showcased from multiple angles tailored to your audience. Always be ready to adapt and roll the dice.

Related: The Success of Your PR Campaign Depends on These 3 Essential Elements

3. Starting PR campaigns prematurely

Timing is everything when it comes to PR. Starting too early may do more harm than good. In fact, it’s a common mistake for startups to launch media campaigns when they’re still in the early MVP stages because they often fail to meet clients’ and investors’ expectations. As a PR specialist, I often see businesses struggling to provide me with answers about their activities, even when it’s for their own sake. Journalists, partners, investors and end users, who have different goals and standards, are much more demanding to satisfy.

Let’s consider an example. Recently, Krutrim AI unveiled the beta version of its highly anticipated LLM and an AI assistant similar to ChatGPT, but with a focus on Indian culture. Soon, the AI chatbot faced criticism from users who found inaccuracies in responses ranging from general queries to translations, mathematical problems and logical reasoning. The bot even claimed to be produced by OpenAI, with the company attributing these issues to problems in the training dataset.

Krutrim’s founder has a proven track record of success and has already founded two unicorns in India: Ola Cabs and Ola Electric. It’s highly likely that the company will improve its model and address any concerns raised. It may not be the case for smaller AI startups. It’s better to wait until you’ve built a solid foundation with clear positioning, reliable processes, and ideally some tangible results, before diving into PR.

4. Overhyping and underdelivering

In the race to grab attention and secure funding, some AI startups tend to exaggerate their products and capabilities, making big promises they can’t really back up. This often leads to disappointment among customers, investors and stakeholders when the startup fails to live up to its hype.

Last year, Inflection AI managed to raise over $1 billion at a valuation of $4 billion, with heavyweights like Bill Gates, Eric Schmidt and Nvidia backing it. Inflection’s flagship product was Pi, an AI chatbot designed to offer emotional support and advice to consumers. However, rumors are now swirling that the startup will abandon Pi less than a year after its launch. It seems the company wasn’t able to deliver on its promises.

Sometimes, taking a more cautious and transparent approach to communication is preferable. Instead of making lofty claims, focus on highlighting real achievements and milestones. By being honest and upfront, startups can build trust with their audience and investors, ensuring a more sustainable path to success.

5. Ignoring AI ethics and data privacy

In an AI-driven world, ethics and data privacy are more important than ever. We’ve even seen the rise of organizations like The Israeli Association for Ethics in AI, which work hand in hand with researchers, developers, policymakers and everyday users to ensure responsible innovation.

Sadly, not all AI startups are giving these concerns the attention they deserve in PR efforts. This oversight could lead to serious repercussions, including damage to reputation and legal troubles. Whether it’s mishandling personal data or failing to address ethical implications, negligence can push potential customers away.

Take OpenAI, which is currently facing legal challenges. Most recently, The New York Times sued them for copyright infringement. They’re also dealing with a bunch of lawsuits from authors, artists, music labels and others. One even alleges that the company improperly obtained massive amounts of personal data, such as medical records and information about minors, to train its ChatGPT model.

To avoid such risks, AI projects should make compliance and ethical conduct their top priorities. Adhering to guidelines and demonstrating a commitment to responsible AI development is one of the key factors to long-term success in the complex AI landscape.

Related: What Will It Take to Build a Truly Ethical AI? These 3 Tips Can Help.

Looking ahead

AI startups might face tougher challenges in the near future. Some leaders in the field begin to wonder if the industry is overhyped, as only a handful of companies have been able to build profitable businesses. In times of uncertainty, effective PR could become the deciding factor between success and failure.

By steering clear of common pitfalls and embracing strategic promotion strategies, AI startups can boost their visibility, attract both customers and investors, and ultimately gain a competitive edge in the market. Ultimately, it’s all about showing the world what sets you and your AI solution apart.