SMB Adoption 39%, End of SaaS Era, Teens, Search & AI

Survey: Nearly 40% of SMBs Using AI

According to a new survey from Verizon, 39% of US small and medium-sized businesses are using AI, compared with 14% in 2023. The remainder either "are considering" or don't/wouldn't use. Survey respondents express a mix of optimism and concern about AI. They see time savings, improved revenue and reduced hiring needs as current or potential benefits. But they're also worried about security and operational-integration challenges.

The survey explores a range of issues beyond AI, including economic outlook, general technology adoption, hiring, holiday sales prep and others. We're most interested in the AI findings and comparing them with our survey.

Here are the top AI use cases Verizon found:

• Marketing / Social Media – 30%
• Data Analysis – 29%
• Customer Service / Digital Personal Assistant – 28%
• Inventory Management / Supply Chain Operations – 28%
• Product or Service Recommendations – 26%
• Order Processing – 24%
• Cybersecurity – 24%
• Financial Management / Accounting – 24%
• Recruitment and Talent Sourcing – 21%
• Fraud Management – 18%

The major AI usage categories in our survey were:

1. Marketing + Advertising
2. Sales + Customer Experience (CX)
3. Business Operations
4. Accounting + Finance
5. HR + Employee Relations

Our survey found (in January) that 31.4% of SMBs were actively using AI, and 29% were testing it, which varies somewhat by headcount and industry. There's limited segmentation in the Verizon report.

The Verizon survey was conducted roughly eight months after ours. New SMB survey data we haven't yet fully analyzed show adoption numbers closer to the Verizon figure, indicating continued adoption and growth.

Both surveys generally reflect AI optimism. However, the Verizon survey spends a good deal of time on risks, partly because risk mitigation and cybersecurity are products Verizon is selling to its customers.

News & Noteworthy

• Perplexity seeking $500M against an $8B valuation – The company sees about 15M queries a day compared to Google's billions.
• How Google is changing to compete with ChatGPT – Google has reorg'd to better compete with ChatGPT; DeepMind's Hassabis in line for CEO job.
• The SaaS Era of 2013-2022 is Over – SaaStr founder on how AI is changing SaaS (customer expectations), is consistent with what we've been arguing.
• How generative AI could reshape B2B sales – A McKinsey report that, despite the firm's characteristic hype, does point to the future of AI-assisted sales.
• AI scams targeting SMBs on the rise: 26% victimized through gen-AI email, voice, or video impersonations of business owners or employees.
• AI has become central to MSFT's strategy – Geekwire reviews the history of AI development at Microsoft and how it underestimated its rivals.
• Apple is still two years behind in AI capabilities – Why Apple Intelligence launch next week is likely to underwhelm.
• NotebookLM now lets you customize "podcasts" – Google's most successful AI product now lets users (somewhat) customize the output.

Data & Discovery: Teens' AI Usage

Students have been early adopters of AI tools, chiefly (though not exclusively) for homework. Common Sense Media's "The Dawn of the AI Era: Teens, Parents, and the Adoption of Generative AI at Home and School" examines how US teens are using generative AI. The survey, conducted in April, featured responses from 1,045 parents and 1,045 teens.

For our purposes, the data on search (vs. ChatGPT) are most interesting:

• 56% of teens have used AI-enhanced search engines; 51% have used chatbots (e.g., ChatGPT, Google Gemini).
• 20% of respondents use AI-enhanced search daily vs. 11% for chatbots​.
• 63% who use gen-AI for school rely more on chatbots; 57% use AI-search.

Chatbots are preferred for their more versatile and personalized output; search engines are utilized for general research and quick fact-finding.

These teens appear to make clear distinctions between use cases for search and for chatbots. And while search has a slightly larger audience overall, chatbot usage is broader. This side-by-side use of search and chatbots is significant because it's shaping the expectations of a new generation, with future product/UX and competitive implications.

Dialog: ICYMI

• How Daisy Is Using AI to Make Its Franchise Business Bloom – The smart home integrator on track to reach $100M ARR and aiming for $1B.

Fun | Funny | Weird

• OpenAI Is A Bad Business – Nearly 11K words on OpenAI's financial struggles, unsustainable growth strategy and questionable viability.
• How San Francisco Learned to Love Self-Driving Cars (WSJ) – Google's Waymo is the future of ride-sharing; drivers will be gone in 5 - 10 years.

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