Regardless of the industry, artificial intelligence (AI) has become a critical factor in business success. AI adoption spans a broad spectrum. At one end sit foundation model companies, such as Anthropic and OpenAI, that build the core AI models. At the other end sit application-layer companies, such as Midjourney and Lovable, that build specialized products on top of those foundational models. In between, established businesses like RingCentral have rebranded themselves as AI leaders in their sectors, even as they continue to rely heavily on their core offering. One thing is clear: AI is here to stay.
For small and medium-sized businesses (SMBs) in Ontario and Sri Lanka weighing their next move, understanding where the real opportunity lies, inside AI or beyond it, is the first step toward building a business that lasts.
The AI Funding Boom: Why Investors Are All In
The business landscape is shifting heavily in favour of AI. In 2025, AI startups raised 52.7% of all global venture capital funding, an increase of 40% over 2024 and 27.5% over 2023. It is the first year that AI-related businesses have captured more than half of all venture funding worldwide. In Canada, a considerable share of new startups launched in 2024 and 2025 were at least partly AI-driven, since AI makes experimenting with and launching new products faster and cheaper than ever before. Even informal online communities, such as the r/canadasmallbusiness subreddit, show a growing number of small business owners offering AI-powered services and tools.
The Other Side of the Boom: Why Many AI Ventures Fail
Will every AI business succeed? Unlikely. AI funding is highly concentrated: 80% of it flows to just three regions — Silicon Valley (65%), Beijing (10%), and Paris (4%). In Canada, only 6% of companies founded in 2024 secured early-stage venture funding, largely due to a shortage of capital in circulation. Startup failure rates sit at around 80%, and AI startups are not demonstrably safer bets. Skepticism about the real benefits of AI also persists among business leaders. More than 80% of AI projects fail to deliver their intended business value, and 95% of organizations report no measurable profit and loss (P&L) return from their generative AI pilots.
Five Ways to Improve Your Chances of Success with an AI Business
If you are determined to pursue your AI business idea despite the odds, here are five ways to improve your chances of success:
Make proper planning and research a prerequisite for every major business decision. Before you commit capital or resources, validate your assumptions with real data: market size, competitive intensity, regulatory constraints, and technical feasibility. A decision made on instinct alone is far more likely to lead to a costly pivot later.
Augment any gaps in your founding team's experience and skills with the right people and tools. Few founders have deep expertise in every discipline a growing business needs, from technical development to sales and finance. Bring in advisors, contractors, or partners who can fill those gaps early, rather than learning expensive lessons on the job.
Conduct a proper demand assessment before finalizing your product or service, and stay ready to pivot if emerging trends turn unfavorable. Talk to prospective customers early and often, test your pricing assumptions, and track how the market is evolving. Demand can shift quickly in AI-driven categories, and businesses that watch these signals closely are better positioned to adapt.
Develop a product or service with clear originality, practical utility, and meaningful differentiation from existing alternatives. In a market crowded with AI tools built on the same foundational models, genuine differentiation, whether through proprietary data, a unique workflow, or an underserved niche, is what separates a durable business from a short-lived trend.
Think about marketing and branding from day one. Designing the right product or service is the first step toward good marketing; consistent execution and delivery is what preserves the momentum you build from there. A strong brand identity and a clear go-to-market plan help your business stand out long before your product is ready to launch.
Exploring Opportunities Beyond AI
For everyone else exploring alternatives to an AI-based business model, plenty of opportunity still exists outside the AI space. The sectors below share three traits: demand is generally constant, if not growing; the entire world presents opportunity; and strong demand and growth exist within specific niche segments.
Food and Beverage: The global food and beverage industry was valued at approximately USD 8.2 trillion in 2024 and is projected to reach approximately USD 12.7 trillion by 2033, a compound annual growth rate (CAGR) of roughly 4.9% for 2025 to 2033. Growth is broad-based but skewed toward higher-value segments, including health and wellness, functional foods, premium products, and convenience. Most of the volume growth will come from population and income gains in Asia and Africa, where urban areas will drive virtually all net population growth through 2030 to 2040. In North America, demand growth will come mainly through value-added options, such as premium, health, and convenience products, rather than through volume. Food demand also tends to be relatively price inelastic for staple foods but more elastic for higher-value items. In practice, economic shocks tend to shift consumer spending within categories, toward cheaper cuts or private-label products, rather than reduce total calories consumed. In short, opportunity will always exist in the food and beverage industry.
Travel and Tourism: The global travel and tourism industry's recovery within five years of COVID-19 is a testament to the sector's resilience and opportunity. By 2024, international tourist arrivals reached 1.4 billion, about 99% of pre-pandemic levels. The Middle East, Europe, and Africa even recorded arrival rates higher than pre-pandemic levels. Sri Lanka offers a particularly striking example: after COVID-19, the 2019 Easter attacks, and the 2022 economic crisis drove arrivals down by more than 80%, the industry rebounded by 2024 to record levels 7% above 2019. In Canada, tourism is in expansion mode, with both domestic and inbound segments growing and domestic travel remaining the largest component. Opportunity areas include experiential and Indigenous tourism, nature and adventure tourism, business events, and ‘bleisure’ travel, to name a few.
Professional Services and Trades: Professional services and skilled trades are both experiencing sustained demand growth in North America, with high rates of self-employment and small-firm activity. Professional services alone are valued at USD 6.65 trillion globally, with North America accounting for a large share. Management consulting is the largest segment of professional services, accounting for nearly 42% of global revenue. Other in-demand services include financial and accounting services, human resources (HR) services, legal and compliance services, and marketing services. These services, along with information technology (IT) services, are commonly outsourced by businesses, especially small and medium-sized enterprises (SMEs), creating a strong demand engine for independent professionals and small specialist firms. Among the trades, Canada continues to report persistent shortages in construction trades, industrial mechanics, welders, and heavy-equipment technicians. Professional services and trades are not AI-dependent, but integrating AI into these businesses can bring down costs, improve service delivery, and expand the service portfolio.
The Bottom Line
Whether you choose to build an AI-driven business or pursue opportunity in an established sector, such as food and beverage, travel and tourism, or professional services, the fundamentals of business success do not change. Careful planning, the right team, a genuine understanding of demand, real differentiation, and a clear go-to-market strategy remain the difference between a business that lasts and one that does not.
For ambitious business owners and SMBs in Ontario and Sri Lanka weighing their next move, the right growth partner can make that path considerably shorter. RedKnot Growth helps you validate your idea, sharpen your positioning, and build a go-to-market plan built for the Canadian market, before you commit significant capital.
Whether your next business idea sits inside AI or beyond it, RedKnot Growth is ready to help you find the right path forward.
About the Author
Malik Sheriffdeen is the Co-Founder of RedKnot Growth Inc. RedKnot Growth partners with ambitious business owners, startups, and SMBs who have something genuinely special to offer. They bring multi-industry senior expertise into a risk-aligned engagement model, working across the full spectrum of business development — from strategic positioning to on-the-ground execution.
“We are built for the pace and complexity of today's market. And we are invested in your success in the most direct way possible: we only win when you do.”
References
GrowVantage — “Startup Numbers in Canada Fall Sharply After Major AI Bump”
WiseGuy Reports — “Health and Wellness Food and Beverage Market”
Wiley Online Library — Research Article 10.1111/1477-9552.70044
UN Tourism Asia-Pacific — “World Tourism Barometer, January 2025”
Research and Markets — “Professional Services Market Report”