The Problem With Being An "AI Company"

Customers want things done. They rarely care about how.

I try to keep tabs on AI bookkeeping startups. We compete directly with them so not doing so would be negligent on my part.

The most interesting thing I've noticed is how many of them either charge the same or more than we do. Why is that? Is it actually more expensive processing a query than it is to have a human do the work? Or do they believe people will pay a premium for AI over humans?

Dig past the marketing content and I've found that a lot of them also use humans. The AI exists to help with automation, but humans are ultimately there to ensure that the work gets done properly. They're basically doing what we're doing, we just don't market ourselves as an AI company.

To understand why, let's look back at the 3D printing industry a decade ago. I worked for a 3D printing company at the height of the 3D printing bubble back in 2013-2015. We had a compelling offering. People could upload their designs to a marketplace and consumers could purchase the 3D prints of those designs. We offered materials, such as steel and gold, that are completely unfeasible for a home printer. Designers could make an income with no capital investment and consumers could buy custom products they couldn't find elsewhere. Also there were fun things such as that a jeweler normally charges extra for an engraving, but we charged less because there was less material used.

The problem was our messaging. We focused so heavily on being a "3D printing company". Meanwhile, consumers did not care that the products were 3D printed. Their eyes glazed over any content we had about how sintering works. They didn't care about how the properties of each material affected what was possible to be printed (e.g. every part of the model had to be a certain thickness depending on the material). Consumers cared about what they were getting and how much it cost.

The advantage of 3D printing is the ability to customize the product, but that doesn't change the fact that 3D printing is significantly more expensive than mass producing something. We had all this content on our pages about 3D printing that consumers just ignored. They focused on the price and we didn't communicate the value enough. The value was the customization. The fact that 3D printing made that possible was irrelevant to consumers. The result for the business was a struggle to make sales.

I think most companies that market themselves as an "AI company" have fallen into the same trap we did in 3D printing. Very few customers of these companies are going to care that the product/service is provided by AI. They're going to care about what they get and how much it costs. The AI label is irrelevant to them.

Looking at the accounting world, a business that hires an accounting firm isn't going to be concerned whether AI is providing the service or not. They are worried about their next sales tax audit. They are worried about having visibility into their costs. They are worried about their margins. They are worried about the essentials to running their business. Whether they're using the latest trend (e.g. AI) is far from their mind unless it directly involves their business domain. For any accounting firm, the focus on marketing should be on what can be delivered to the client. How it is delivered can matter to prospective employees or investors, but not the client.

The AI label isn't just a distraction when marketing to customers. It can also pidgeonhole your implementation. There is the classic saying "when you have a hammer, everything looks like a nail." Generative AI is a great tool, but everyone is treating it like a hammer. AI is not appropriate for every problem. Even we make this mistake from time to time. We spent more time trying to get ChatGPT to accurately compare two spreadsheets than it took for me to just write a for loop that did the same thing.

Our focus is on solving our clients' problems. The solution could be using a human. It could be buying third party software. It could be AI. It could be a simple script. We use whatever is most appropriate for solving those problems. If we had labelled ourselves as an AI company, we'd be pressuring ourselves to use AI whenever possible, not just when it was the best tool for the job.

It's always tempting to jump on the latest trend. Hype can be helpful in marketing and gaining visibility. It can help find investors who use that hype to raise money. It can help attract employees who are interested in working on something everyone is talking about. Talking about how you use the latest trend is appropriate when approaching those two groups. Things are different with your customers though. With your customers, you should always talk about what's valuable to them.