Don't Start an AI Company. Do This Instead

0:00What mistakes do you see entrepreneurs making around AI? Cuz I'll give you one. >> Huh. >> The the small business owners that I know that get too in like into AI and maybe they're listening to podcasts and they're on X and and and we're maybe doing this. >> to go. >> [laughter] >> Um they'll like they won't just apply AI to their business. They'll like start a new company that's like AI-oriented and

0:28>> and I just think that's like the worst possible mistake cuz they end up doing something that like the model just does well and that's like, okay, so you're going to compete just directly with like all the biggest companies in the world on something that you don't even know as well as the biggest companies in the world when you can when [laughter] you can just like and so and so there's like this like grass is greener thing happening where instead of seeing like, oh, I can just make, you know, these parts of my business, even if it's just 10% more efficient, uh I can I can, you know, keep compounding, but what are you seeing?

0:58>> All right. Uh one, they're using AI to do dumb things really fast. Um so they're doing the wrong stuff with AI. So even like they were like a small business owner that wasn't making money now still doesn't make money but has a lot more token cost than they did before. Number two, >> Like meeting meeting summaries. Like I've never been successful like I I've never >> That was my bottleneck. I just needed a summary of that. >> No, but but it's one of those things like like I think it's cool that these apps exist. I've never I've never needed to take notes to achieve my goals in business. [laughter] Like I'm just like, okay, what's the next most important thing to do? I'm going to do that thing.

1:33Okay, what's the next most important thing to do? I'm going to do that thing. I've never I've never been like, okay, like what did we say? I mean and and I've worked in like small companies, right? Only only been a founder. Um but but that's just such an example of like, yeah, my meeting notes system is like so dialed. I'm like, okay, like how much money have you made? >> Yeah. >> Okay. >> [laughter] >> So I'll I'll say you to to to counter answer the two things that I think are the right way to use it, which is number one, how do we take every [clears throat] function of the business

2:00>> take it from an org chart based thinking to workflow based thinking and then saying, okay, this editor used to be involved in these six workflows. We actually only need him to be now involved in three of those workflows and the other three we can have AI do the vast majority of the work. And so all of a sudden we can three five x output and so revenue per head count on service based businesses should decrease, which means margins should go up. Now there's this great opportunity window right now where prices aren't really going to adjust for a minute, which means that your margins get absolutely stupid and so like you should do that. So there's two flavors of that. One is the the I'm I'm an advocate of like don't tell people you're using AI.

2:35>> [laughter] >> Like go go have a service business that people think is all humans in the background and then charge human prices and then have costs of tech and have the scale and operational of the the lack of operational drag of tech. That's the good game, right? Or take it department by department so that you can just become more efficient at at it, right? So those are I think the two good ways of doing it. To your point of like, well, being distracted is still a terrible idea as a founder. And so this has just made it so much easier for people to get distracted because like I can start a business on this or that or that and then it's like, yeah, but you still have your dry cleaning store, dude. Like what are we going to like and to be fair, if you have if you want to be a trillionaire, you are going to need to get into bleeding edge tech and AI, but you probably should get rid of your dry cleaning store and go all in. And so they're trying to juggle two plates and not really succeeding at either.

3:19>> Totally. Totally. Yeah, the the dry cleaning example is like use AI to constantly be monitoring every possible new space that you could expand into within your area or in in the county over etc. and just do that do that do that, but it's like grass is greener. Like, oh, what if I what if I made the operating system the agent operating system for dry cleaners? It's like, no, just like do the thing. >> Just win at dry cleaning cuz it's also so much easier to compete against other dry cleaning owners cuz you for sure know that they're not adopting it the right way cuz they're doing the same thing with orange glasses and and banging out their their replica coded software, you know, like fine.

3:55>> Yeah. There's also like a fair amount of AI that a lot of small businesses are probably getting for free just in the sense of like if you have a CRM that's sending emails, like that company has probably adopted AI and is doing somewhat smarter targeting and so you might not need to go and build your own CRM that sends emails that are customized for every customer because like you get it for free out of the box. >> There's also this this tendency to rebuild the existing software that you're using. So it's like, "Oh, I've got you know, I don't I don't need to pay Calendly, you know,

4:27>> Yeah. >> $9 a month when I it's just like, "Oh, so instead you're going to use 200 hours to try and recode what they just did and if it breaks all the time >> error then you lose nine grand. >> Yeah. [laughter] But like that is what I'm saying all the time. If you like this video and you're a business owner who wants to break through your current revenue ceiling, I distilled every lesson from scaling 10 businesses past 10 million and three businesses past 100 million into a completely free scaling roadmap that I've used to go from zero to one, zero to 10, and zero to 100 plus. And so you can click here and you can check it out.

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