Sep 30, 2024 5 min read

Dialog: Exchange #1

This is our inaugural Dialog newsletter.

This is our inaugural Dialog newsletter. We were on the fence about creating yet another email newsletter for your inbox. But there are so many things going on, we needed another way to capture and comment on them. We'd love your input and feedback.

Also: Last call for input into our consumer survey. If you'd like to give us feedback, please let us know and we'll share the Google Doc. The survey will go out October 9. Thanks to those who've already provided input.

Workers: AI Not Improving Our Productivity

Small businesses and agencies both cite increased efficiency and productivity as primary AI benefits. And that's certainly been true for us as well. But not everybody agrees. Several months ago Upwork released findings from a global survey of 2,500 "c-suite executives," salaried employees and freelancers from the US, UK Australia, and Canada. It found a meaningful disconnect between executives and workers' attitudes toward AI.

The great majority (85%) of the executives were either "mandating or encouraging" use of AI tools (no discussion of company size). C-suite leaders saw/see AI as a way to boost productivity; 81% said AI had in fact improved productivity. But their employees disagreed:

47% of employees using AI say they have no idea how to meet their employers' productivity expectations.
77% of employees said AI tools had actually decreased productivity and added to their workloads.

Workers felt like they were spending lots of time "reviewing or moderating AI-generated content (39%), invest[ing] more time learning to use these tools (23%), and [were] being asked to do more work (21%)." And 40% thought their bosses were asking too much "when it comes to AI."

AI utopianists promote the idea that it will free up time for workers and improve the quality of work-life balance. But, as is often the case with technology, the time freed up gets quickly consumed increased output expectations.

AI & Local: What's New?

Open AI will lose $5B this year on $3.7B in revenue; however the company is currently raising $6.5B and projecting 2025 revenues of $11.6B.
CA Governor Newsom vetoes landmark AI regulations that would have been strictest in the US.
Google paid $2.7B to Character.ai to get back one person, Noam Shazeer. It's the most expensive "acquihire" of all time.
SOCi Local Visibility Index 2024 – company's sixth annual report benchmarks franchise brands across search, reputation, and social channels, with recommendations for improving online visibility.
Artisan raises $11.5M to deploy AI ’employees’ for sales teams – the company's AI assistant automates tasks now handled by BD representatives (i.e., lead research and personalized outreach).
Will A.I. Be a Bust? Goldman Sachs' AI critic Jim Covello thinks AI can't deliver the ROI to justify current massive spending and investment levels.

Datum & Data

Oxford Economics and Adobe surveyed 1,500 executives and 4,000 customers from 13 countries for the report The State of Digital Customer Experience. Generative AI features prominently in the findings. One section explores barriers to adoption. The data were collected in 2023 but are still instructive.

Q. To what extent have the following factors acted as barriers to the implementation of generative AI within your organization?
“Large barrier” and “Medium barrier” responses from executives.

Time to implementation — 65%
Lack of technological maturity — 62%
Length of the expected ROI — 59%
Regulatory requirements — 57%
Compatibility with existing systems — 57%
Customer resistance — 55%
Security concerns — 55%
Inability to keep consistent with brand standards — 55%
Lack of available skills in the workforce — 52%
Lack of support from leadership — 47%
The cost of technology upgrades — 46%

Many of these issues are most prevalent in large organizations and enterprises.

Companies: New | Interesting

Last week we spoke to Grant Freeman, President of Thryv and Chief Product Officer, and Rees Johnson about where and how they're implementing AI and their messaging to customers about it. They told us they're being judicious with when and how they talk about it to small business owners. AI is an enabling technology, not a service or outcome, which is what most local business owners are focused on.

Everyone is pitching their AI capabilities. As companies rush to promote AI, it ironically adds another level to the challenges of telling competitors apart. But if you don't talk about it when others are, you may drop out of consideration.

We also spoke to Alex Bellini, the founder of GetDandy, which launched a few years ago as a negative review removal service but has expanded its capabilities and is now repositioning (somewhat) as AI-Powered Reputation Automation service. While there are several companies that promise negative review removals GetDandy is using AI to identify reviews that violate Google's terms, including fake reviews.

We had a very interesting conversation with Emily Small, VP of Technology for Daisy, which is building a new kind of franchise operation in the "smart home" vertical (reportedly a $30B industry), with automation and AI at the core. The end-to-end vision we heard about was impressive though they're not yet ready to discuss it publicly.

We've been debating the thesis that AI-first companies will have clear operational and even product advantages over legacy providers that simply layer in AI over existing software. Daisy appears to validate that. By the same token, established companies have awareness and brand recognition advantages; the best product doesn't always win.

Along the same lines, Kayak, Expedia and others in travel are starting to roll out AI assistants. But Mindtrip, which recently raised $12 million, has built a fundamentally different travel planning experience with AI at its core. There are dozens of new AI-powered travel sites and most of these will come and go. But AI's impact on the travel industry will be permanent.