Selling AI Won't Make You Rich.. Unless

Summary

In this video, the speaker outlines three strategies for making money with AI. First, AI should be used to optimize existing profitable processes rather than create entirely new products. Second, AI excels in high-volume, low average order industries, offering better profitability. Third, building distribution—through cold emails, ads, and demand generation—is the key to success in the AI-driven economy. The most valuable asset in the future will be a business's ability to reach and engage customers, making demand generation the most important skill to develop in the AI era.

Takeaways

• 😀 AI makes things profitable, not necessarily possible. It helps you work faster and improve margins, rather than creating entirely new opportunities.
• 😀 To make money with AI, focus on optimizing existing profitable processes by integrating AI, rather than trying to create new AI products or services.
• 😀 Speed and efficiency are crucial. By using AI to accelerate deliverables (like copywriting), you can increase revenue and reduce operational costs, ultimately improving margins.
• 😀 AI can help transform previously possible but unprofitable processes into profitable ones. A great example is personalized email outreach, where AI automates research and increases efficiency.
• 😀 AI excels in high volume, low average order value industries. It’s less effective in low volume, high average order value industries due to the loss of nuance in complex sales processes.
• 😀 For high-value sales, AI's lack of nuance can result in a lower conversion rate, leading to significant opportunity losses. It’s important to assess whether AI can save enough costs to justify its use.
• 😀 Avoid applying AI in high-value, low-volume industries (e.g., private equity deals), where even a small decrease in conversion can result in substantial financial loss.
• 😀 AI is most effective in industries with lots of small transactions rather than big-ticket, low-frequency deals. In high-volume settings, AI can help optimize operations and generate better ROI.
• 😀 The future of business in an AI-driven economy will depend heavily on distribution, or the ability to get attention and reach customers. AI cannot replace the need for strong customer bases.
• 😀 Building distribution through demand generation, such as cold emailing or ads, is the most important skill to master in the AI era. This will be the key to success and wealth generation over the coming years.

Q & A

What is the main way AI helps businesses become profitable, according to the speaker?

AI makes things profitable by allowing businesses to perform tasks faster, improve margins, and optimize existing processes rather than creating new products or services from scratch.

Why does the speaker suggest using AI for pre-existing profitable processes rather than creating new ones?

AI enhances existing processes, making them faster and more efficient, which leads to increased profitability, rather than reinventing the wheel with entirely new AI products or services.

How did the speaker apply AI to their copywriting business?

The speaker integrated AI into the copywriting process to produce content faster, allowing them to deliver more work to clients in a shorter period, which resulted in quicker payments and higher revenue.

How does the speaker explain the benefit of improving speed in deliverables with AI?

By delivering services faster, businesses can increase the frequency of client payments, thereby improving revenue. The speaker illustrates this with the example of receiving payments every two days instead of three.

What is the example of something that was once possible but not profitable, and is now both possible and profitable with AI?

Personalized email outreach is the example. AI can now automate the research and personalization process, allowing businesses to send many personalized emails efficiently, which was previously time-consuming and not cost-effective.

Why does the speaker caution against relying on AI for low volume, high value industries?

AI may reduce conversion rates in high-value, low-volume industries, such as private equity deals, where the stakes are high. The cost of lost opportunities could outweigh the savings from AI, making its application less effective in such scenarios.

What is the mathematical difference between using AI and human setters for high-ticket sales?

With AI, the conversion rate might drop by 5%, leading to a potential revenue loss. For example, with 100 leads, a 5% decrease in conversion could result in a $125,000 loss, highlighting the importance of considering AI’s impact on high-value sales.

What type of industries is AI best suited for, according to the speaker?

AI is best suited for high-volume, low average order value industries where it can handle a large number of transactions, making processes more efficient and profitable, without significantly impacting the quality or conversion rates.

What is the main competitive advantage businesses will have in the AI-driven economy?

In an AI-driven economy, the main competitive advantage will be distribution, or the ability to generate and leverage attention. This will be the key differentiator for businesses, as AI can easily replicate products but cannot easily replicate established customer bases.

Why does the speaker emphasize the importance of demand generation and distribution in AI's future economy?

As AI democratizes the ability to create products, the key to success will be building and maintaining distribution channels. The ability to capture attention and generate demand will become the most valuable skill in the economy.