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Are AI Automation Agencies a Scam?

I wrote in two previous posts about what AI Automation Agencies (AAA) are and if you should start one. As AAA content has grown exponentially on YouTube and social media in the last few weeks, many are asking a valid question off the back of this - "Are AI Automation Agencies a Scam" or potentially a fad?

I will answer this question by discussing three main points:

1) The business of what a genuine AAA should do is not a scam.

2) The spike in AAA content on YouTube and other social media is fad-like.

3) The accuracy of this AAA content and the AI knowledge of its creators needs questioning

A hooded man with his face not visible standing against a dark background with his hand outstretched and an AI generated text image saying "scam" appearing over his hand

What a Genuine AAA Does

The attention AI and its potential for automating business tasks & processes has garnered since the launch of ChatGPT in November 2022 has been immense. But does the data back up this attention being warranted? Are the potential benefits and efficiencies businesses can gain from adapting AI legitimate?

The infographic below is from the investment research firm MSCI. It shows the percentage share of tasks/processes in different US industries that AI could automate. A key point to note is the use of the word "tasks". When it states that 44% of the legal industry is exposed to AI, it does not mean 44% of lawyers, legal clerks etc., will be gone. It means 44% of the tasks they do today could be automated using AI:

Infographic  showing industries with the highest % of AI automatable employment in the U.S.

Imagine you are an AAA who has a client in the legal industry with ten staff. Your agency succeeded in automating 44% of the tasks using AI that MSCI said could be automated in legal firms. Does this mean the firm will lay off 4 of its ten staff? They certainly have that option. But they could also use the additional 44% of the day you have created for them positively. They could spend more time doing research to win their cases, more time providing expert advice to their clients, and more time soliciting additional business for the firm.

This time saving is why the services AAAs will offer are in demand and will continue to be in demand. Any work task that has a "process document" or "procedure document" for a human to follow mindlessly is ripe for AI to automate. Tasks that make people feel like an automaton at work will be done by a legitimate automaton, freeing humans up to focus on the more "human" task, providing real value to their business and employees. But the question arises: how has this revolution in task automation been translated and communicated in popular media?

The Fad-like Spike in AAA Content on YouTube

As we transition our discussion to explore the recent surge in AAA content on YouTube and other social media platforms, it's crucial to understand the discrepancy between the real business value of what an AAA can add and the rise in the use of buzzwords and trendy phrases, like AAA itself, that can overshadow the legitimate value a business in this field will provide.

The use of AI in business is not new. McKinsey published a report this year that shows 50% of larger firms already use AI in at least one of their business units or functions. So the idea that an AAA is some new type of "business model" is false:

Chart showing the percentage of companies who have adapted AI in at least one business unit or function.

What is new is the use of the term "AI Automation Agency". AAA is a catchy name and well suited to the YouTube and social media audience used to bro marketers pushing "agencies" in areas like digital marketing and social media marketing - SMMAs.

The firms currently performing automation services for businesses don't style themselves AAAs, but the services they offer are the same ones the "new" AAA business model pushes. So the only thing new about AAAs is the packaging and social media marketing behind them.

While the packaging and presentation of AAAs as a 'new' model might contribute to the current social media frenzy, another factor we must address is content creators' credibility, or lack thereof, in this space. Let's delve deeper into this concern.

Accuracy of AAA Content and the Knowledge of its Creators

The actual "scam" in AAAs is people publishing content about creating and running AAAs who know little about AI or the application of AI to automate business processes.

An easy tell is to look at the history of someone posting AAA content and see if any of the below are true:

  1. Have they previously posted content about NFTs, cryptos, SMMA, dropshipping, Amazon FBA etc.?

  2. When did they start posting about AI? Was it only after the launch of ChatGPT in November 2022?

  3. Do they mix AAA with other "agency models" like SMMA, affiliate marketing, digital marketing etc?

80%+ of AAA content on YouTube and social media is made to generate views on social media platforms. It is clickbait. Those creating the content are simply jumping on AAA to get clicks. These content creators have no experience in applying AI to automate business processes.

Much of the content mentions AAA along with agency models like SMMA, affiliate marketing, digital marketing etc., which are popular topics on YouTube. These videos discuss the merits of starting an AAA agency versus an SMMA agency. As mentioned in a previous post, the complexity of what an AAA does amplifies as the business matures. This complexity contrasts with an SMMA-style business, where the core mechanics of your business remain relatively static after an initial learning period of about six months post your first sale.

As a result of the above, these two "models" will be attractive to two completely different types of people. The idea of making a comparison between the two is, therefore, pointless. So someone comparing them on social media either a) lack the knowledge to understand these differences or b) understands the differences, but their actual goal is social media exposure, not providing accurate and helpful content. Neither is someone you want to take advice from on starting an AAA.

In Conclusion

The services and the core idea behind running an AAA is not a scam. The data suggests it will be lucrative over the following years as more firms, particularly small and medium-sized firms, adopt AI to automate and augment their processes and business.

While 80%+ of AAA content on social media is produced for clicks rather than as sound business advice, there will be a market for high-quality content that addresses and discusses the reality of what an AAA should actually do and what it takes to run such a business.

We expect the volume of AAA content to continue to spike in 2023. However, it will taper off as the realities of starting an increasingly complex business become apparent to those looking to make easy money by jumping on the latest fad early.


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