5 Tempting AI SaaS Ideas I’d NEVER Build (here’s why)

Summary

In this video, Simon Horberg, an AI SaaS entrepreneur, warns against pursuing five overly common and risky AI SaaS ideas: AI copywriters, AI coding tools, AI therapists, AI detectors, and AI summarizers. He emphasizes that while these ideas may seem appealing and easy to implement, they face oversaturation, high operational costs, ethical concerns, and limited market potential. Drawing from his experience, Simon advises aspiring founders to avoid these saturated fields and suggests focusing on more innovative, non-critical AI solutions. His insights aim to guide creators toward more sustainable, profitable ventures in the AI space.

Takeaways

• 😀 AI SAS ideas can appear deceptively simple and easy to build, but they may ultimately lead to failure.
• 😀 AI copywriters are highly saturated in the market, and it's difficult to stand out in this space, leading to a race to the bottom on pricing.
• 😀 Tools like AI copywriters work as great features in larger products but should be avoided as standalone products due to high competition and low differentiation.
• 😀 AI coding tools like Cursor face significant financial risks for bootstrap founders due to high operational costs associated with AI usage.
• 😀 AI coding tools often rely on substantial financial backing, making it hard for bootstrap founders to compete without large investment.
• 😀 AI therapists face significant ethical concerns, as AI can potentially offer harmful advice and lead to real-world negative consequences.
• 😀 There have been real-life incidents where AI chatbots have given harmful suggestions to vulnerable individuals, raising serious ethical issues for AI therapy products.
• 😀 The AI therapist market is fraught with risks, and as a bootstrap founder, it’s better to stay away from products that involve people’s health, both physical and mental.
• 😀 AI detectors designed to detect AI-written content have major flaws, including being ineffective for SEO and harming content quality.
• 😀 AI summarizers are widely available as features in productivity ecosystems like Google Workspace, making them less valuable as standalone products for new entrants.
• 😀 Competing with major players like Google or Microsoft in the AI summarization space is difficult due to the already established trust users have in these platforms.

Q & A

Why does Simon Horberg suggest avoiding AI copywriter tools as a business idea?

Simon advises against AI copywriter tools because the market is already oversaturated with established players like Copy.ai and Peppertype. These tools often rely on OpenAI’s API, resulting in products that don't offer unique value, making it difficult to stand out and leading to high churn rates and low pricing.

What is the main reason Simon suggests staying away from AI coding tools like Cursor and Wind Surf?

The main issue with AI coding tools is the financial burden of running them. The operational costs of using AI APIs scale with usage, which makes it financially unsustainable for bootstrap founders. Tools like Cursor are backed by significant investment funding, allowing them to absorb losses while striving for market dominance, which small businesses cannot afford.

Why does Simon caution against creating AI-based therapy products?

Simon highlights the significant ethical and legal risks involved in AI therapy products. There have been incidents where AI chatbots have given harmful advice, and such products can lead to serious consequences. This makes AI therapy too risky for a small business, especially in handling sensitive issues like mental health.

What are the key flaws of AI detector tools, according to Simon?

AI detector tools suffer from three main flaws: they do not address the real issue (low-quality content), they are caught in a constant cycle of trying to outsmart Google’s algorithms, and they may degrade content quality by attempting to rewrite it, which is counterproductive.

What makes AI summarizer tools a bad idea for new businesses?

AI summarizer tools have already been integrated into major platforms like Google Workspace, making it difficult for new businesses to compete. Additionally, there are trust issues with gaining access to sensitive user data, like emails and meeting content, making it an unappealing space for small businesses to enter.

How does Simon differentiate between AI copywriting as a feature versus a standalone product?

Simon suggests that AI copywriting works well as a feature in a larger product, like in FeedHive, which is a social media management tool. However, as a standalone product, it is unlikely to succeed due to market saturation and the lack of unique value.

What is the challenge of scaling AI coding tools for bootstrap founders?

Scaling AI coding tools is challenging because the cost of AI APIs increases with the number of users. For small businesses, this results in a financial burden as user growth can lead to rapidly increasing costs, making it difficult to achieve profitability without significant funding.

Why does Simon consider AI therapy tools unethical or dangerous?

AI therapy tools can be dangerous because of the potential for the AI to give harmful advice, as seen in real-life cases where chatbots have caused distress or worse. Mental health issues require careful, human handling, and AI chatbots could easily make situations worse, posing ethical risks.

What does Simon think about the viability of AI detector tools in the SEO space?

Simon believes that AI detector tools in the SEO space are not viable because they focus on the wrong problem—Google is concerned with content quality, not whether it was written by AI. Furthermore, these tools engage in a constant battle with Google’s algorithms, making them an unreliable foundation for a business.

What is Simon’s advice for finding better AI SAS ideas?

Simon advises focusing on small, micro-level AI SAS ideas that address specific, less-saturated markets. He suggests exploring ideas that offer unique value, avoiding highly competitive or ethically questionable areas, and looking for opportunities where AI can genuinely improve existing products or services.