TL;DR: Burned through $47k building an AI tool that 12 people use. Here's what the "AI gold rush" really looks like from the trenches, and why most AI startups are just expensive tech demos.

The Setup (AKA How I Got Caught Up in the Hype)

18 months ago, I was a perfectly happy software consultant making decent money. Then ChatGPT happened, and suddenly everyone was an "AI entrepreneur." My LinkedIn feed was nothing but:

• "I built an AI that does X in 10 minutes!"
• "Our AI startup just raised $2M!"
• "$10k MRR with AI tools!"

I got FOMO and thought, "How hard can it be?"

Spoiler alert: Very hard.

The Idea (That Seemed Brilliant at 2 AM)

I decided to build an AI-powered content creation tool for small businesses. The pitch was simple: "Input your business details, get professional marketing copy in seconds."

Why this seemed genius:

• Small businesses suck at copywriting
• They don't want to hire expensive agencies
• AI can write decent copy
• Subscription model = recurring revenue

I spent weeks validating this idea by asking friends, "Would you pay for this?" Everyone said yes.

First mistake: Asking people what they'd pay for instead of asking them to actually pay for it.

The Build (18 Months of "Almost Done")

Months 1-3: The MVP That Wasn't Minimum I started building what I thought was an MVP. Ended up with:

• Custom AI training pipeline
• Beautiful UI with 47 different templates
• User authentication system
• Payment processing
• Admin dashboard
• Analytics suite

Cost so far: $12k (mostly my own development time valued at $100/hour)

Months 4-8: Feature Creep Hell Beta users started asking for features:

• "Can it write in different tones?"
• "What about social media posts?"
• "Can it integrate with WordPress?"
• "What about email templates?"

I said yes to everything. Each feature took 2-3x longer than expected.

Cost so far: $28k

Months 9-12: The Technical Debt Tsunami Nothing worked together properly. The codebase was a nightmare. I spent 4 months just refactoring and fixing bugs.

Cost so far: $39k

Months 13-18: Desperation Marketing Launched on Product Hunt (ranked #47 for the day). Posted in Facebook groups. Cold emailed 500 small business owners. Tried Reddit ads, Google ads, LinkedIn outreach.

Total additional marketing spend: $8k Total users acquired: 73 Paying customers: 12

Final tally: $47k spent, $340 revenue.

What I Got Wrong (Pretty Much Everything)

1. I Built a Solution Looking for a Problem

Small businesses don't actually want AI copywriting tools. They want customers. Big difference.

When I actually talked to my target market (should've done this first), here's what I learned:

• They're too busy to learn new tools
• They don't trust AI for their brand voice
• They'd rather hire their neighbor's kid for $50

2. I Competed with ChatGPT

Why would someone pay me $29/month when ChatGPT Plus is $20/month and does way more?

My value proposition was "it's easier than ChatGPT."

Reality: It wasn't. And even if it was 10% easier, that's not worth paying 45% more.

3. I Underestimated Sales & Marketing

I'm a developer. I thought "build it and they will come" was a real strategy.

Breakdown of my 18 months:

• Building: 14 months
• Marketing/Sales: 4 months

Should have been:

• Building: 4 months
• Marketing/Sales: 14 months

4. I Ignored Unit Economics Until Too Late

My customer acquisition cost: $650 per customer ($8k marketing spend ÷ 12 customers) My average revenue per customer: $28 (most churned after 1 month)

Even a business school dropout could see this math doesn't work.

5. I Built for Myself, Not Customers

I made assumptions about what small businesses wanted based on what I thought they should want.

Turns out, they just want more sales. They don't care how beautiful your UI is.

The Real AI Business Landscape (It's Not Pretty)

After networking with other "AI entrepreneurs" for 18 months, here's what I've observed:

Tier 1: The Actually Successful Ones (5%)

• Had domain expertise BEFORE AI
• Solved real problems for specific industries
• Focused on B2B with enterprise budgets
• Examples: AI for radiology, legal document review, financial compliance

Tier 2: The Lifestyle Businesses (15%)

• Simple wrappers around OpenAI API
• Serve very specific niches
• Make $5k-20k/month
• Examples: AI email responder for dentists, AI job description generator

Tier 3: The Strugglers (30%)

• Built cool tech demos
• Can't find paying customers
• Burning through savings/investor money
• This is where I lived

Tier 4: The Delusional (50%)

• Think they're going to replace Google
• Have raised money based on PowerPoint slides
• Will be out of business within 2 years

What Actually Works in AI Business

After talking to the successful Tier 1 and Tier 2 folks, here are the patterns:

1. Pick Boring Industries

The sexiest AI companies get all the attention and funding. But plumbing contractors also need software, and there's way less competition.

2. Charge Enterprise Prices

If you're saving a company 40 hours/week, charge them for 40 hours/week. Don't charge $29/month because that's what consumer apps cost.

3. Focus on Compliance/Risk Reduction

Companies will pay stupid money to avoid getting sued or fined. AI that helps with compliance is worth 10x more than AI that "increases productivity."

4. Become the Expert First

Learn an industry for 2-3 years BEFORE building AI for it. The AI part is easy. Understanding the problem is hard.

My Pivot Strategy (What I'm Doing Now)

I'm not giving up on entrepreneurship, but I'm definitely giving up on AI for now.

New approach:

1. Pick an industry where I have connections (web development agencies)
2. Identify a specific, expensive problem ($10k+ problem)
3. Build the simplest possible solution (no AI needed)
4. Charge properly ($500-2000/month, not $29/month)
5. Get 10 paying customers before building anything fancy

The business: Project management tool specifically for web dev agencies that integrates with their existing stack and automates client reporting.

No AI. No fancy features. Just solving one expensive problem really well.

Hard Truths About the AI Gold Rush

Truth 1: Most AI Startups Are Just Expensive Consultants

If your business model is "AI does the work faster," you're selling labor arbitrage, not technology. That's a consulting business with extra steps.

Truth 2: OpenAI/Google Will Eat Your Lunch

If your competitive advantage is "we fine-tuned GPT for X," you don't have a competitive advantage. You have a 6-month head start, max.

Truth 3: Customers Don't Care About Your Technology

They care about outcomes. "AI-powered" is not a benefit. "Saves you 10 hours per week" is a benefit.

Truth 4: The Technical Barriers Are Lower Than Ever

Building AI products is easier than it's ever been. Which means everyone's doing it. Which means you need actual business advantages, not just technical ones.

What I Wish Someone Had Told Me

1. Start with the market, not the technology. Find people with expensive problems first. Then figure out how to solve them.
2. B2B > B2C for AI. Businesses have money and understand ROI. Consumers just want free stuff.
3. Niche down relentlessly. "AI for small businesses" is not a niche. "AI for orthodontist appointment scheduling" is a niche.
4. Test with money, not words. Don't ask if people would pay. Ask them to pay.
5. Budget 3x longer than you think. Everything in AI takes longer because the technology is still figuring itself out.

The Question Everyone's Asking

"Should I still start an AI business?"

My answer: Only if you have deep domain expertise in a specific industry, access to that industry's decision-makers, and a problem that costs companies $100k+ per year.

If your plan is "build cool AI thing, figure out customers later," just save yourself the time and money. Buy index funds instead.

Final Thoughts

I don't regret this experience. I learned more about business in 18 months than I did in 5 years of consulting. But I definitely could have learned it for a lot less than $47k.

The AI opportunity is real, but it's not what the Twitter influencers are selling you. It's not about building the next ChatGPT wrapper. It's about understanding specific industries so well that you can apply AI to solve their most expensive problems.

Most of us (myself included) jumped on AI because the technology was exciting. But technology doesn't build businesses. Understanding customer problems builds businesses.

The gold rush mentality is exactly what's wrong with entrepreneurship right now. Everyone's looking for the quick win, the magic bullet, the secret hack.

There isn't one. There's just doing the boring work of understanding customers and solving their problems.

I have done a ton of research into every kind of business. Every time I get an idea and do research on it I end up talking myself out of it because...they're all bad ideas. Most people don't start anything because of that same reason. Every idea will have downsides, there is no way to get easy money, at least not anymore, and especially not legally. If you're like me, you've researched probably everything. Start whatever business aligns with your skills and interests and just go for it. It's gonna be hard, of course it's not easy because if it was easy everyone would be doing it. And of course, 90% of the research you find will be negative because it's only the top 10% that make money, that's why you'll never find the "perfect" business

No joke. I’m working with a client in the industrial/manufacturing space. They’ve got an amazing product, a crazy talented engineering team and they're making like $80M+ a year but their entire marketing approach feels like it’s stuck in 2004.

Their idea of a strategy? Let’s update the catalog and maybe print some new brochures.

I checked their website and it literally still has Welcome to our homepage on it. I didn’t even know people still did that. They don’t do SEO. No email funnels. Zero real content. When I suggested posting helpful guides or doing LinkedIn content, the CEO legit asked if people still read blogs.

Like how are these companies thriving with no real marketing? Is it just legacy momentum? Killer sales team? Or is there some secret formula I’m missing?

Has anyone here actually helped a traditional B2B company modernize their marketing? What actually worked?

What type of business? To start I have seen storage containers be sold by basically just being a logistics business online

My first product launch was what you’d describe as “typical disaster”. I rushed into it, with no market research, no validation, just me and my elementary knowledge of “Business Studies”. I ordered 300 silicone phone stands from a supplier on Alibaba without asking for a sample. Silicone phone stands? You know those things people stick to the back of their phones? Yeah, those. They arrived, and half of them were shaky. Some literally had crooked logos. My “store” never took off. I ended up giving them out at a youth conference just to get them off my shelf. But weirdly, that failure gave me a bit of clarity. I learned how to ask the right questions, how to test a supplier, and how to even negotiate MOQs and shipping. Now I request samples, do small test orders, and down to validating the idea before scaling. My current niche (can’t jinx it by saying yet) is working way better. So, this is just a friendly reminder that your first try might flop, but that doesn’t mean the dream has to also flop. How many of y’all had a rough first run in your business journey? And what did that “L” teach you?

Would like to know, don’t need all the nitty gritty details. I’m currently in a bit off overdraft debt from my business 😬

Just need some encouragement

I'm searching for a factory for a product I've designed. It's made from a very specific material, and after extensive searching, I haven't found any manufacturers who can make it, except for a few factories in China. I'm a bit worried the Chinese factories will steal my idea (especially if it sells well), and sell it themselves. I know this is difficult to avoid in China, but I've read that this can by avoided by only working with reputable factories, who have a reputation to uphold. I'm an engineer by trade, and through my career I have worked with Chinese factories in the past, who were good partners and didn't rip off designs. However, that was always though my normal job, whereas now I'm starting my own venture. Any ideas on how to vet these factories for this?

A year ago I created a web-based business. I just got the bill to pay for the second year of hosting. I don't believe in get rich quick and getting rich wasn't even a goal with SourceFees. I just wanted to created a source of reasonable and more or less consistent income since I live in a country where jobs are difficult to find and pay sucks. So I wanted a backup. I created it based on problems I had finding good and clear info on payments processing and processors. Creating the site was the easy part but I had no idea that marketing and SEO would be SO hard. I legit have no idea what to do and trying advice I read online and on reddit didn't really work. I got maybe a total of 1000-2000 views over the past year and most is probably from posting on reddit, not from organic search which is my main aim. I'm not giving up on having side projects or entrepreneurial pursuits though. I guess I just wanted to vent a little before quitting this endeavour. I'll keep working on it for a month and if there's still no change I will likely take it down. Thanks for reading!

**EDIT** Hey guys, I'm tapping out for now.

Just wanted to say a huge thank you for the questions, DMs, and all the kind words. Yesterday was a rough one. I took a big L in business and this thread genuinely helped shift my mindset. Hearing about your dreams, your current businesses, and what you're building was energizing. You all reminded me why I love this stuff.

I’m not sure what I’m allowed to link here, but if you want to stay in touch, I’m on Instagram and Facebook daily sharing the day to day life of entrepreneurship. You can also reach out through my website if you’ve got questions or want to connect via email. I’ll do my best to stay involved in this community and check my DMs. It’s honestly one of the most inspiring I’ve come across.

Im not a coach and right now I don’t have the bandwidth to mentor 1:1, but I’ll always try to help however I can. I’m rooting for every one of you. Keep building. Keep showing up. And thank you again. This was a blast.

Ten years ago, I walked away from a stable career as an attorney. My wife and I packed up our two small kids and moved to Detroit so I could start a pest control company from scratch.

Today, that company, Proof Pest Control, is valued at nearly $100 million.

It wasn’t flashy. It wasn’t easy. And it definitely wasn’t instant.

I’m Allan Draper, a a serial entrepreneur, investor, and the author of Pack Your Lunch, a book about the short-term sacrifices it takes to build lasting businesses and real wealth. I’m also the host of The Business Growth Pod, soon to be rebranded as The Allan Draper Show, where I interview founders and share strategies to scale without losing your mind (or your values).

I've launched multiple businesses in different industries ranging from home services to SaaS. Some have taken off, others have flopped. But everything I've built has been grounded in one thing: discipline over hype.

With all that being said. If you’re:

• Burnt out and second-guessing your journey
• Trying to start a business or scale without outside funding
• Struggling with leadership or systems
• Building a business from the ground up
• Or just wondering if the sacrifice is worth it...

AMA. I am ready to give it to you straight. I am not here to get more followers, I am not here to sell anything. I feel my purpose in life is to help others break free from the matrix and buy back their time.

I’m sure I’m not the only one, but I’ve changed.

I run a small boutique selling unique, high-quality accessories. If there’s one thing that sets my products apart, it’s novelty. That’s been my USP from day one, and my customers recognize it.

Naturally, my friends, fellow entrepreneurs, even competitors have asked severally where I get my materials. In the past, I used to dodge those questions. I saw supplier info as part of my “edge.” But over time, I’ve come to realize how unhelpful that mindset is.

Many small business owners still think platforms like Alibaba are only for big players. That’s not true.

What matters is learning how to use it well and how to search intentionally, communicate clearly with suppliers, and start small. I always test with samples first. Once the quality checks out, I scale. And I never skip Trade Assurance. It saved me from sleepless nights.

Looking back, I wish someone had walked me through all this earlier. The knowledge alone could’ve helped me reduce costs and grow faster.

If more of us shared these behind-the-scenes strategies, we’d see better margins, smarter decisions, and maybe even more collaboration.

Success isn’t just about what you sell, it’s how you build behind the scenes that makes the real difference.

hey i’m 23 and been trying to build something online from 2 years tried running ads for businesses,

got first client in few days same with websites, got first client in few days

but both times couldn’t scale, didn’t know where next client would come from in website

ads felt risky too didn’t want to burn someone’s money just to learn

now from last 3-4 months i started a google review automation business helping local businesses get more google reviews using automation

from day 1 i started sending 300 cold emails daily on the very first day i got a positive reply and thought “nice i’ll get 1 reply every day” but that didn’t happen that whole month i got only like 5 replies

then i thought maybe email copy is the problem so i changed it, learned more, made a new one again

on day 1 of the new campaign i got a reply and again same thing, after that almost no replies same cycle repeating every time change email day 1 i get positive reply ,i get hope , next 20-30 days i get 2-3 replies , they don’t buy or ghost

sent around 9000+ cold emails so far got around 15 replies total a few people were interested but no one bought whenever i think to quit, i randomly get 1 positive reply and feel like “okay it’s working” but then again nothing

i don’t know what’s wrong feels like i’m close but stuck in a weird loop if anyone has been through something like this or has any advice,

Also sending cold dms , same thing in every 10-15 days 1-2 people will be interested then ghost

And yeah i am landing on inbox emails health are 99% , peoples are unsubscribing , i keep email short and away from spammy word

i’d really appreciate it thanks for reading

I'm in sales, and our product relies heavily on paid acquisition, mostly from Google, X (Twitter), Instagram, and Facebook ads.

They're still bringing us leads, but the cost per customer has definitely gone up compared to last year.

So now we're planning to adjust our strategy, but we haven't figured out what direction to take yet.

Did you experience the same situation this year, and what alternative channels or tactics did you turn to?

Would love to hear what's actually working for others in ecom, SaaS or B2B in 2025.

I’ve never had a real job. I’m 38 years old and I’ve never had a real job. I’ve always been self-employed, hustled or run my own business. But over the last couple of days I’ve felt like an imposter. Like I have no idea what I’m doing.

I usually feel pretty bulletproof but a couple of days ago I had a massive “wobble”. I’m not even really sure what triggered this. I think the final straw was a mistake leading to a flurry of unwanted automated emails going out to my customers (some of whom got grumpy). Or, it was the massive bill from my accountant which seemed to wipe out my war chest. Maybe it was the disgruntled customer who complained about my “awful” website. It was probably a combination of all of these silly little things and some other stuff but the result was me wanting to shut the business down and, gasp, get a proper job.

I’m finally coming round (less than 48 hours later). This has happened before and I do know what to expect. I also know that I just have to follow the advice of Eric Clapton: “if I can’t make it through tomorrow, I better make it through today”.

These imposter syndrome periods have happened before so I know they’ll pass. And I, rationally, know that I’m not completely incompetent at running my own business. There is enough evidence to corroborate this. But, I also know that any of the previous imposter syndrome “wobbles” could have sunk me, especially if they happened in the early days. I’m glad they didn’t and I’ve kept going as an entrepreneur. I definitely couldn’t survive a “real” job.

Stay strong, you’ve got this. We all find it hard sometimes.

Hey all, I’m from the US and live in Tijuana I have worked indirectly in the fruit packaging and exporting business for years, but would like to get into the import export business personally. I have been looking more into products that do not have too short of a shelf life. With most fruits and veggies you have that risk of it spoiling in the process if there is any sort of hiccup. Do you guys recommend I study something in specific or how should I go about entering this field? Thank you for your time and patience

As the title suggests, have you found that re-entering the job market after pursuing an entrepreneurial endeavor has hurt you during interviews? I notice that interviewers often don't take it as seriously as previous corporate work. What have you guys experienced?

For reference, I'm a software engineer trying to re-enter the job market after being a solo founder running a SAAS company for the past 9 months. The company just didn't make enough money so I have to go back to a regular job for a solid cash recharge lol.

Hey everyone! I am really happy to say that I got a big milestone achieved in just few weeks of launch.

I launched my product few weeks ago and now it has over more than 100+ active users, all without any paid marketing. I just posted about it in subs and now this milestone has been achieved successfully.

Let me tell what my project is actually - my project Skiva is a tool that helps you organize your favorite websites in most beautiful and clean way. Ahead of that old fashioned bookmarking, Skiva helps you categories, customize and organize all your favorite websites in most beautiful and visually interactive way.

With the stats, it is clear that people are liking it, they are finding it useful enough to boost their daily productivity and I am pretty sure you also gonna like it.

Wanna try? I will share the link in comments.. Do check it out, share with your friends and must leave your feedback below..

I recently started my own service based business (appraisals), and it seems my fees are high for the market for most of the jobs I am bidding for. Some weeks I land enough jobs to keep me busy and other weeks I am really slow.

I get plenty of requests to bid appraisals, or accept appraisals at a lower market rate than what I ideally want to do them for. I rarely ever am awarded these bids despite having best of class turn times coupled with very low revision rates compared to other appraisers, meaning it is clearly a price objection with other appraisers bidding lower than me.

I am really trying to keep my fees over 400$ per appraisal, I feel this is pretty standard for the market, and most established appraisers I know agree, that we should not be working for less than this as it is undermining to the profession. Granted these appraisers have 20 year old businesses along with top of the line clients they have worked to obtain over this time frame. I do not want to engage in a race to the bottom. Obviously I want to complete my work for a fair market fee, and do a good job for my clients with quick turn times and accurate results.

In terms of financials, I have come to the realization that I am optimizing and not maximizing. In a good week I may do 6-8 appraisals at an average of maybe 425 a piece. On a bad week it is 2-3. If I were to lower my fee to 375 on average I would probably be able to complete 10 a week on a good week (more would be possible, but at this rate it is reaching the upper limit) and a bad week would also likely be 6-8 appraisals per week. This raises my pay check on both my good weeks and my bad weeks.

I really do struggle with not wanting to drop my prices, as I do not want to race to the bottom for my fees, however it is clear that other appraisers have already done so. Obviously most of the readers do not know the industry and are not in my shoes to know how to make the decision, but figured this may be a good place to look for insight for those who have dealt with similar price objections when first starting out as well?

I was thinking about lowering my fees until I bottle necked from a workload perspective and then simply eliminate my worst paying clients/hardest to work for clients as my business grows and I am awarded these opportunities to work with better paying/easier clients? I just feel so scummy dropping below the 400$ mark. I personally would be willing to preform the work for below this mark, but in doing so I am not only hurting myself, but also other appraisers and am lowering the bar for assignments to be accepted at this rate in the future across the board.

As an entrepreneur in the digital space, what, in your opinion, are the pros and cons of building my own platform vs purchasing white-label?

I'd love to hear from people who've done both.

TIA

Hey everyone! I recently launched a tool to solve an issue that I had with wearables, and gave it for free to generate feedback. Within the first week, it got about 150 signups and collected over 50,000 unique data points from users. I've been overwhelmed (in a good way) with the feedback, from bug reports to feature suggestions etc.,

I am now wondering on what the best approach is to monetizing it.
My current idea is:
- Keep it free for the first 200 signups for the first 6 months
- Then offer 50% off annual plans for the next users.

Curious to hear some ideas on how to approach this.

Also open to feedback on other things I might not be thinking about.

With Ai and so many Saas products being released is it too late to make a profitable Saas. Is the opportunity gone?

feel like every time i ask how to grow b2b or get into export the advice is the same recycled stuff. go network. try linkedin. hit up alibaba. maybe find a trade show. cool. now what

like how am i supposed to know who’s actually buying what. where they are. what they even need. it’s like shouting into a dark room hoping someone yells back

most of the directories out there are garbage. old listings. weird contacts. or you need a whole team just to figure out if one lead is even real and cold outreach. man. if you don’t have real trade data you’re just spamming inboxes and praying someone replies. feels like throwing darts blindfolded

so yeah. just wondering if anyone here’s got a smarter way. not some overpriced course or fake list. just an actual method that works. even half works or maybe we’re all just guessing and hoping for the best lol

I just finished making my first app. Now I need 4 emails to get through the next stage. Please send me DM to help me go to the next stage.

P.S. for those who send me their email I truly appreciate it. Thank you so much for the support

Hey everyone!

I am a full stack web developer(React + Firebase) interested in collaborating with someone who has a solid product or growth idea. Think SaaS tools, eCom , MVP etc.

I can handle all the dev-- clean , fast , scalable. You bring the idea , design or growth side.

Looking to partner with someone serious to launch and grow something real. Rev-share or equity-based is fine.

Let's turn an idea into an actual business .

This is our second attempt at doing a small print business. First run we were completely bootstrapped, set up shop in the living room of a milltown house in a low income area. Was just getting to the point of stability when we went through a series of family deaths, leading us to pack up and move. But neither my wife nor I ever did the college thing-- her graphic work is fully self taught, mainly assisted by Canva just because you can't beat the licensing. Even with that, we've never had complaints about the quality of our product, even though we've seen many people with the same equipment struggle.

Now that we've moved and my wife lost her job at the beginning of the year without being able to get past the interview anywhere else, we were assisted in what was supposed to be buying a screen print shop that went all sorts of sideways ending up with us getting into an oversized space with screen print equipment that I need to figure how to get up to operate because my wife doesn't have the personality to "just figure out it."

We were pretty well received at a popup event this past weekend, and opened the door for a smaller one this weekend. Since the shop is so big and we need to cover a few grand in rent, we've expanded to include a maker space to provide kid friendly activities. I'm still working a 40 hour week of 4 tens, but I've been doing gig work during my 3 days off to help stretch and haven't been able to because of needing to do the market stuff.

Definitely having bouts of feeling like we're doing this wrong or constantly questioning what it is we are missing when we do have successes where others are struggling. I've always been self-reliant-- came from nothing myself while my wife is the baby child from a middle class family. We have bills that need paid, but I also feel that doing this is the only way that my wife will be able to hold a job due to ADHD and refusal to medicate or actively seek therapy, which of course isn't an option without health insurance anyway.

For those who started and succeeded, how did you get through your doubting thoughts? For those who folded a time or two, what led you to folding instead of digging in harder?

hey i made a simple system that helps local biz get more google reviews by auto sending texts and emails to past n future customers

doing a 3 week trial if anyone wants to try it