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Is AI Automation Agency a Legit Business Model?

There are a lot of questions surrounding AI Automation Agencies (AAA) and whether they are a legitimate business model. Several YouTubers began posting videos on "starting your own AI Automation Agency" over the summer. The volume of videos on the topic has grown exponentially, and many of these videos are of questionable quality. Certain YouTubers are merely posting videos about AAAs to get views rather than provide valuable insight.

Despite the low quality of content, I have written previously about the overall idea behind AI Automation Agencies being sound. If you ignore the noise and the dubious online claims, there is a legitimate business model there if you target the correct niche.

In this post, I will fact-check four claims made about AI Automation Agencies to see if they are legit. By clearing these points up, we can make an informed answer to the question, is AI Automation Agency Legit?

Close up of a green AI generated human-like  face

Claim 1 - You can start an AI Automation Agency with $0

While technically accurate, the reality in the real business world is you need to spend money to make money with an AAA. The AI tools you will use in your agency all cost money. Charges for using AI tools are monthly, annual or per-usage basis. Before approaching potential clients, you must test and get familiar with these AI tools. Therefore, you must pay to get started and use these tools.

Some tools do offer free trials or freemium versions. However, if you are serious about starting a business, you must create samples/prototypes to show potential clients what you can do for them. Solely depending on free trials or freemium versions is not a sustainable business strategy.

You must also pay for basic business necessities, like a website and branded email address. You could use a free website builder and a Gmail or Outlook mail address. But these look cheap and unprofessional. Businesses will trust agencies that invest in a professional online presence. In business, as in life, first impressions matter. If you want to be taken seriously, you need to look serious. So the claim you can start an AAA with $0 is not legit in the real world.

Claim 2 - AI Automation Agency is a brand-new business model

YouTubers and content creators are using creative licence here. The term "AI Automation Agency" is new. It first started appearing online over the summer of 2023. The idea of companies/agencies automating tasks and processes for other companies using AI is not new. Large consulting firms like McKinsey, Deloitte and PWC have offered AI automation services for years.

AI Automation Agencies are different because they are not targeting the large firms that McKinsey, Deloitte and PWC are. AAAs will target small and medium-sized businesses instead. These businesses are too small to be attractive to the large consulting firms. So an AAA can slide in and offer AI automation services to these companies instead.

So while the AAA terminology and online buzz suggest a novel concept, in reality, it's a repackaging of an existing idea. They are scaled-down, focused versions of businesses that are already operating. This does not mean there is no opportunity to target small and medium-sized companies; I absolutely believe there is. However, it's essential to debunk the notion that an AI Automation Agency is an entirely novel concept.

Claim 3: You can start an AI Automation Agency with zero experience

No certification or qualification is needed to set up an AI Automation Agency. It is different from becoming a doctor or lawyer, where you need to pass exams to get credentialed. However, you need to know about AI, how AI is applied to automate business processes and how the AI tools used to automate business processes work.

If you're unfamiliar with terms like machine learning, natural language processing, large language models or training data, then you don't understand the basics of what an AI Automation Agency does. Understanding the fundamentals of AI is a prerequisite to running a business that sells AI services.

Before you go and pitch a basic service like an AI-powered customer service chatbot to a potential client, you need to understand how these chatbots work. Because you can be guaranteed, the client will ask you how they work. No one will use an AI Automation Agency if the owner does not understand the basics of the service he claims to offer. Clients want expertise, and they will only hire an agency whose owner is well-versed in the fundamentals of their services.

So the claim you can start with zero experience is not legit. You need to understand AI, AI tools and what specific problems and pain points AI tools can solve for a business. If you already have these, then great, you have experience. If you do not have this experience, you need to learn about AI, start using the tools, and automate some of your own tasks to test the business model and see if this is really for you.

Claim 4: You can hire a person or team to do the technical part

If you have the thousands or tens of thousands of dollars, it would cost to pay a person or team to do the technical part; this claim may be valid. For 99% of people, this claim is not financially feasible. Most people will not have the cash to invest in hiring people from day one.

The only realistic scenario for this to happen is to team up with technically-minded people to co-found your agency. For instance, combining forces—a marketer and a software developer—offers an agency a balanced foundation. In that case, it makes sense that the marketer leaves the technical work to the developer.

Relying on freelancers from platforms like Fiverr or Upwork without a clear understanding of AI is also a poor approach. You will be talking with potential clients, looking at their processes and determining what you can automate. You need to understand how AI automation tools work to determine what you can do for clients. You only have a business if you can figure this out.

I hope that by addressing these four claims, I have helped clarify whether AI Automation Agencies are legit. For the right people, there is a great opportunity out there. However, the idea that someone can jump in with $0, zero experience and no intention of getting involved on the technical side is erroneous. AI Automation Agencies are legit and represent a valid and promising business model. It is essential to differentiate between the accurate information written about them and misleading content.


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