It has become popular for companies to align themselves with AI. For good reason! AI has the potential, and ever increasing likelihood, of fundamentally transforming the way that companies work. The hype is out of control! People breathlessly compare AI to the internet and the industrial revolution. And who knows; they could even be right!
At AuthZed, a rapidly growing segment of our customers are AI first companies, including OpenAI. As we work with more AI companies on authorization for AI systems, we often get asked if we will rebrand as an AI company.
Companies have realigned themselves to varying degrees. SalesForce may one day soon be called AgentForce. As an April Fool’s joke, one company started a rumor that Nvidia was going to rebrand as NvidAI, and I think a lot of people probably thought to themselves: “yeah, that tracks.” Mega corps such as Google, Meta, and IBM have .ai top level websites that outline their activities in the AI space.
It can make a lot of sense! After all, unprecedented shifts require unprecedented attention, and a rising tide floats all boats. Well: we’re not. In this post I will lay out some of the pros and cons of going all in on AI branding and alignment, and explain our reasons for keeping our brand in place.
A Rational Choice
When considering such a drastic change, I believe each company is looking at the upsides and downsides of a rebrand given their specific situation (revenue, brand value, momentum, staff, etc.) and making a calculated choice that may only apply in their specific context. So what are some of the upsides and downsides?
Risks
The risks that I’ve been able to identify boil down to two areas: brand value and perception. Let’s start with brand value.
Companies spend a lot of time and effort building their brand value. It is an intangible asset for companies that pays dividends in areas such as awareness, customer acquisition costs, and reach, just to name a few. Apple is widely considered to have the most valuable brand in the world, and BrandFinance currently values their brand at $575 billion, with a b. That’s approximately 15% of their $3.7 trillion market cap.
When you rebrand by changing your company’s name, you can put all of that hard work at risk. By changing your name, you need to regain any lost brand mindshare. When you change your web address, you need to re-establish SEO and domain authority that was hard fought and hard won. If Apple rebranded to treefruit.ai (dibs btw) tomorrow, we would expect their sales, mindshare, and even email deliverability to go down.
The second major risk category is around perception. By rebranding around AI you’re signaling a few things to the market. First, you're weighing the upside of being aligned with AI heavily. Second, you signal that you’re willing and able to follow the hype. These factors combined may change the perception of your company to potential buyers: from established, steady, successful, to trendy, fast-moving, up and coming.
On a longer time horizon, we’ve also seen many such trends come and go. Web 1.0, Web 2.0, SoLoMo, Cloud, Crypto, VR/AR, and now AI. In all cases these hype movements have had a massive effect on the way people perceive technology, but they have also become less hyped over time, as a new trend has arrived to supplant them. With AI, I can guarantee that at some point we will achieve an equilibrium where the value prop has been mostly established, and the hype adjusts to fit. Do you want to be saddled with an AI-forward brand when that happens? Will you have been able to ride the wave long and high enough to establish an enduring company that can survive on its own? One of my favorite quotes from Warren Buffet may apply here: “Only when the tide goes out do you discover who's been swimming naked.”
Rewards
There are many upsides that companies can expect to reap as well! Hype is its own form of reality distortion field, and it causes a lot of people to act in ways that they might not have otherwise. FOMO, or fear of missing out, is a well established phenomenon that we can leverage to our benefit. Let’s take a look at who is acting differently in this hype cycle.
Investors. If you are a startup that’s hoping to raise capital, you had better have either: insane fundamentals or an AI story. Carta recently released an analysis on how AI is affecting fundraising, with the TL;DR being that AI companies are absorbing a ton of the money, and that growing round sizes can primarily be attributed to the AI companies that are raising. Counter to all of the hype, user Xodarap over at LessWrong.com has produced an analysis on YC companies post GenAI hitting the scene, that paints a less rosy picture of the outcomes associated with primarily AI-based companies so far. It’s possible (probable?) that we are just too early in the cycle to have identified the clear winners and losers for AI.
Vendors. If partnerships are a big part of your model, there are a lot of dollars floating around for partnerships that revolve around AI. I've had a marketing exec from a vendor tell me straight up: “all of our marketing dollars are earmarked only for AI related initiatives right now.” If you can tell a compelling story here, you will be able to find someone willing to help you amplify it.
Businesses. Last, and certainly not least, businesses are also changing their behavior. If you’re a B2B company, your customers are all figuring out what their AI story is too. That means opportunity. They’re looking for vendors, partners, analysts, really anyone who can help them be successful with AI. Their boss told them: “We need an AI story or we’re going to get our lunch eaten! Make it happen!” So they’re out there trying to make it happen. Unfortunately, a study out of MIT recently proclaimed that “95% of generative AI pilots at companies are failing.”
Mitigating Factors
The world is never quite as cut and dry as we think it might be. The good news is, that you can still reap some of the reward without a full rebrand. At AuthZed, we’ve found that you can still tell your AI story, and court customers who are looking to advance their AI initiatives even if you’re not completely AI-native, or all-aboard the hype train. Unfortunately, I don’t have intuition or data for what the comparative advantage is of a rebrand compared to attempting to make waves under a more neutral brand.
Our Calculus
At AuthZed, our context-specific decision not to rebrand was based primarily on how neutral our solution is. While many companies, both AI and traditional, are having success with using AuthZed to secure RAG pipelines and AI agents, we also serve many customers who want to protect their data from unauthorized access by humans. Or to build that new sharing workflow that is going to unlock new revenue. Or break into the enterprise. Put succinctly: we think we would be doing the world a great disservice if our technology was only being used for AI-adjacent purposes.
The other, less important reason why we’re not rebranding, is that at AuthZed we often take a slightly contrarian or longer view than whatever the current hype cycle might dictate. We try not to cargo-cult our business decisions. Following the pack is almost by definition a median-caliber decision. Median-caliber decisions are likely to sum up to a median company outcome. The median startup outcome is death or an unprofitable exit. At AuthZed, we think that the opportunity that we have to reshape the way that the world thinks about authorization shouldn’t be wasted.
With that said, I’ve been wrong many times in the past. Too many to count even. “Never say never” are words to live by! Hopefully if and when the time comes where our personal calculus shifts in favor of a big rebrand, I can recognize the changing landscape and we can do what’s right for the company. What’s a little egg on your face when you’re on a mission to fix the way that companies across the world do authorization.