The explosion of interest in generative AI has inspired thousands of new startups promising to transform industries with artificial intelligence. But according to Mahesh Chayel, a product management lead at Meta who has mentored more than a dozen AI-focused startups since 2018, many founders are failing to articulate what actually makes their solution valuable. In the rush to integrate AI into everything, many are skipping over the basics of identifying a real customer problem and building a viable product.
Chayel argues that the best AI startups aren’t the ones that pitch the smartest algorithms. They’re the ones that understand how AI can solve real-world problems better than current alternatives. Drawing from his experience, he offers a practical three-step framework for founders to shape, refine, and communicate their AI vision in a way that resonates with users, investors, and potential partners.
1. Start with a Real Customer Problem
One of the most common mistakes Chayel sees is founders falling in love with AI as a technology without first understanding the customer pain point they want to address. “AI is a means to an end,” he says, “not the end itself.”
Many founders begin with a powerful language model or coding tool and then search for a problem to solve with it. This leads to solutions in search of a problem—a pitfall that often results in lackluster adoption. Instead, Chayel advises founders to spend time with their prospective users, study their workflows, and identify what causes friction in their day-to-day lives. Only then should they consider whether generative AI is the best way to remove that friction.
For example, a startup targeting healthcare might think it’s building an AI tool to summarize doctor-patient notes. But until they understand exactly what doctors, nurses, and administrators are struggling with—and how existing tools fail them—they won’t know whether AI is really the answer.
2. Focus on Product-Market Fit Beyond the Hype
Early signs of user interest or a few pilot customers don’t mean a startup has found product-market fit. Chayel defines true product-market fit as a product that users return to repeatedly, that becomes embedded in their workflows, and that creates tangible value.
Too often, AI startups are encouraged by viral interest or investor excitement and misinterpret that buzz as validation. But sustainable traction only happens when users are retained, not just acquired. If customers use a product once and never return, it doesn’t matter how good the AI demo looks.
Founders need to ask themselves hard questions: Are users willing to pay? Are they recommending the product to others? Are they using it daily, weekly, or only once out of curiosity?
In Chayel’s experience, AI tools that drive real behavior change—such as automating previously manual tasks, improving decision-making, or saving significant time—tend to achieve stronger retention and word-of-mouth growth.
3. Align Business Model with Buyer Behavior
A startup can build a brilliant product and still fail if it doesn’t understand who will pay for it. Chayel cites the example of a company that created AI-generated companions aimed at Gen Z users. The product was compelling, but the users weren’t willing to pay. The startup ultimately had to pivot toward licensing the underlying technology to mental health platforms and HR providers that had the budgets and willingness to pay for digital well-being tools.
In other cases, AI startups focus on end-users but fail to realize that the actual buyer is a department head, IT team, or procurement officer with entirely different concerns. The ability to understand the economic buyer, navigate their objections, and price the product accordingly is crucial.
Moreover, founders need to think beyond free trials and demos. A clear monetization path, even if it starts small, signals to investors and partners that the startup understands its market.
Final Thoughts: Vision Is Execution
Chayel’s message to founders is simple: vision is only valuable when paired with execution. A compelling AI demo might get you into the room. But to stay in business, you need a real solution to a real problem, sticky engagement, and a business model that scales. Founders who anchor their vision in empathy, product rigor, and business sense will be the ones who build the next generation of transformative companies.
Prepared by Navruzakhon Burieva
