Amplification Intelligence
Hype, Vaporware or value for small businesses
It was one of those classic frigid winter days in Minneapolis In 2023, and I was visiting a college buddy. His house looked different—freshly painted walls, a few carefully placed sculptures from his last trip to Africa. His wife, as always, had outdone herself, preparing a three-course Kenyan meal. I poured each of us a bourbon on the rocks. As my friend swirled his glass, he asked, “So, how’s startup life going?” I told him things were good—we had just raised capital at a solid eight-figure valuation. He froze, squinted, and smirked, “What?” Then he asked about revenues. I obliged. He leaned back and said, “Venture capital (VC) investing isn’t real.” He argued that a company’s valuation should simply be the present value of its discounted cash flows and questioned how VCs justify these deals. I kept it simple, smirking: “Early-stage venture investing is more art than science.” He quickly interjected. “No, man. That’s not even real—it’s vaporware. As an investor, that makes no sense.”
My friend is one of the sharpest financial minds I know—no fluff, no nonsense, always cutting straight to the chase. As I wrote this, I kept thinking back to that conversation and the idea of communicating value. Venture capital has undeniably created immense economic value, yet a schism remains between finance fundamentalists like my friend and venture capitalists on how to drive value creation in investing.
We face similar issues today in communicating the value of AI. It is undeniably one of the most powerful technologies in the history of humanity’s existence. Yet I believe there is a schism between Mainstreet, Wallstreet and the Valley on the value generated by AI and what the intended benefits for small Mainstreet businesses are.
What is [Artificial] Intelligence
I started following AI development closely about four years ago after talking to my now brother-in-law who had just started a PhD in AI studying generative adversarial networks (GANs). Fast forward to today and the discourse in AI is still rife with technical Jargon like GANs and abstract anecdotes that fail to convey value to small business owners like the med spa owner in Multnomah County, Oregon.
So, what is AI in simple terms? Imagine you could make a perfect clone of yourself, one that can read every textbook, watch every video, and absorb every news article or blog post in the world and never forgot anything. You could ask your clone any question and get an instant answer, enabling you to make smarter and faster decisions. Now, imagine working with this clone every day in your business—think about how much more you could achieve. That’s essentially what AI is; It amplifies your intelligence and capabilities, allowing you to do more.
Why Should You Care
Skynet isn’t taking over, rather AI will usher in an era of abundance unlike anything we have seen before. The closest measure of abundance in any economy is its Gross Domestic Product (GDP). Simply put GDP is a measure of the total output of a country and that output is a product of labor and productivity. As stated above AI amplifies human output. Therefore, if we could empower every small business in America and around the world to harness AI effectively, this would create unprecedented abundance and spur economic growth in every community. As Jordan Crenshaw, Senior Vice President at the US chamber of Commerce puts it, “AI allows small businesses — who many times do not have the staff or resources of their competitors — to punch above their weight.”
This might be a contrarian thought today, but I believe Mainstreet businesses such as corner stores, family run shops, local enterprises and their communities will capture most of the value generated by AI.
THIS WEEK ON MAINSTREET
📰Mainstreet Minute:
According to the US chamber of Commerce Technology and Engagement Center, “As small businesses continue to reel from the effects of inflation, supply chain disruptions and talent acquisition, AI is emerging as a tool to help small business owners stay competitive in the marketplace”
📌Quick Win Tip:
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💡Aim the Spotlight:
Meet Levi, the owner of a boutique accounting firm in Texas. Levi’s firm helps clients file taxes, run payroll and close their books. Every week a new AI tool lands in his inbox, each promising to close books faster and eliminate errors. But here’s the thing, closing books already takes his bookkeepers just 20 minutes, it not the bottleneck in his business. What does keep him up at night is figuring out how to free his team from mundane tasks to improve operational cadence. For example, one of his longest standing employees spends hours each day on manual data entry, busy work that prevents her from proactively addressing client concerns when they arise.
The real issue stems from the fact that clients use different data taxonomies, making automation a headache. For example, some of his food and beverage clients use different POS systems, each with unique data structures and sometimes the same field has different names across businesses. Some clients can’t export their data at all and send screenshots which his team has to manually transcribe. Furthermore, tax filing is just as messy given these data formatting issues. State regulators require different data formats, forcing his team to manually reformat client data. Through all this, Levi also has to worry about data privacy for his clients.
He is not looking to replace his staff; she has longstanding institutional knowledge that’s key to driving client relationship management. However, he pays 15K+ USD a year today for an accounting practice software that still doesn’t fix this issue. He is hoping AI can help him streamline his data entry challenges and amplify his staff productivity.