How AI Will (Probably) Make Your New Business Fail | Noemi Kis

At 17 years old, I arrived in America, dreaming of starting a business. And it was hard, really hard. Starting a business took time, money, and technical expertise. And it's always been this way, until recently. Advancements in AI have made it easier than ever to start a business. With the click of a button, you can create anything instantly and perfectly. And yet, businesses are still failing in record numbers. In the first year, we lose 2 out of every 10 new businesses. After 5 years, half are gone. And after a decade, only 3 of them are left. With all the new tools now at our fingertips, why is it still so hard to succeed in business? In 2012, I started my first business with no experience distributing water filtration products in the industrial sector. And I did everything I could to get that business off the ground. And I don't mean the hustle culture version you see on Instagram. I wasn't waking up at 5 a.m. and jumping into an ice bath or chugging bulletproof coffee. The reality was way less exciting. I had to cold call for hours, send hundreds of emails, travel constantly to trade shows, and try to build relationships with people who didn't even want to speak to me. It was brutal. But eventually, I got some clients and started making some money consistently. And once I felt I knew what I was doing, I used technology to build systems and automations, and the business took off. Like many entrepreneurs, I had many ideas. So now that my first business was a success, I felt that I could give them a go. But this time, I decided to use technology right from the beginning to help me. In very little time, I had a website, a team of remote programmers, and it looked like I had a real business. But as soon as I started speaking to giant companies, I realized that my solution wouldn't work for them. And for a while, I kept rolling that boulder up a hill until I finally had to realize that the business was going nowhere. I was devastated. So why couldn't I make it work this time? Throughout my entrepreneurial journey, I've connected with many aspiring business owners. In the early days, I used to hear things like, I haven't got the perfect idea yet, or I don't have the money to get started, or I've got a job. How am I supposed to find the time for a new business? And many would just say that the reason they hadn't gotten started yet was because they just didn't know how to build a website or start an email list. But lately, the conversations have changed. Recently, a new entrepreneur came up to me, and she said, hey, check it out. I use AI to build my app. What do you think? I said, looks very fancy. Who are you going to be your customers? She hesitated and said, hmm, I haven't quite figured that out yet. She had an idea, used AI to create it in just a few days. But when she launched, crickets. And this is happening to many new businesses. And there are a lot of them. Since the pandemic, when many of us were locked at home, the number of new businesses skyrocketed. But even though millions of people have gotten started, and the overall numbers for business formations actually doubled, the success rate has stayed the same, and the failure rate has not come down at all. So what happened? When I started my first business in water filtration, the technology just wasn't there for me to take any shortcuts. I had no choice but to put in the work and speak to lots of potential clients. So I deeply understood what they needed. But in my second business, I barely spoke to any customers. I had a solution, and I was searching for a problem. Like so many, I used the technology crutch to jump straight into something that looked like a business, but didn't have any substance. I realized that we shifted the challenge from lack of resources to lack of reason. What do I mean by that? Entrepreneurship used to take time, money, technical know-how. Now it's as easy as sending a text. So you get a website, you build an email list, you create an app, you get arms of drones to fly to all your customers at the press of a button. But you struggle because your business lacks a reason to exist, and you didn't do the work to figure out if it should. When Airbnb got started, they had no idea if anyone would be willing to stay at a stranger's home. In order to test this, they hosted people on air mattresses in their flats. When DoorDash started, instead of jumping to fancy technology, Tony Hsu personally spoke to customers and restaurant owners and delivered the meals himself. That's how he first learned the challenges he would need to solve. Aspiring business owners are getting distracted by all the shiny things that make it look like they have a business, but they aren't putting in any of the hard work first. They are faking it before they make it. And it's never been easier to fake it. I used to think that all the hardship that I went through in my first business was terrible, and that it should have been easier. But now I realize that it can't be easy. If you never had to answer tough questions and go through tough times, then what's stopping anyone else to getting to where you are? It will be difficult. It must be. Now, I don't know exactly what that difficulty will look like for you. Maybe it's sleepless nights. Maybe it's facing the fear of rejection. Maybe it's having to go much deeper to figuring out if anyone even needs what you're selling. I know it won't be easy. But once you create a business that's worth existing, you can use all the incredible power of AI to help you grow, which is what I've done in my first business, which is still going strong, and which is what I'm doing with all the new ideas I've had. So, before you worry about all the amazing things AI and tech do for you, try this. Actually do the thing and get paid for it. Airbnb hosted people in their flats. DoorDash manually delivered orders. Get one happy customer, then get more. I wish I could tell you it was easier, but as a 17-year-old arriving in America, dreaming of starting a business, I already knew if you make something that matters, you will never have to fake it again. Thank you.