Why AI Is Not Going To Make You Rich And What To Do Instead

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You know that feeling when there's a spark building inside of you, that you were meant for more? That's your own drive pushing you towards what's next. Capella University gets that. With their FlexPath learning format, you can set the pace and earn your degree without putting your life on pause. You've built experience and you know what you're capable of. Now, this is your time to turn that momentum into more. The only real question is, what can't you do? Learn more at capella.edu. Did you know that 95% of companies that rolled out AI last year got zero financial return from it? Yeah. If you haven't been told this yet, I'm here to tell you, you don't need to use AI for everything. In fact, I encourage you not to use AI for most things as a founder of your company.

Why?

And by the way, this is the biggest takeaway of the whole episode, and that's because the thing that actually makes you money AI can do, and that's making insightful decisions. The things that come out of your head, the ideas that are implemented in your business, are the things that actually make you rich, not what AI can do. Listen, I get it. Every business is feeling the same pressure. They feel like they have to use AI or they're going to get left behind. But AI is just a tool. It's a worker. It's just like hiring somebody on your team to do a job. It's not a creator of ideas. Your judgment is your taste, and your taste is what makes your business and your product and your offer special. That is what's going to make you money. And this is why I say you should never outsource that. You actually don't need to use AI for any of that. Today, I'm going to share with you the hard, cold facts, the data on why the AI gold rush is actually failing. And plus how to use AI the right way in your business so that you could leverage its power without losing your power as the founder. Let's go. Welcome back to the $100 MBA Show. I'm your host, Omar Zenhom, where I deliver practical business lessons 3 times a week, Monday, Wednesday, and Friday to help you start, grow, and scale your business. I got a quick favor to ask. If this show has helped you in any way, leave me a quick review. You could do so wherever you listen to podcasts. This helps me and my team reach even more people who need the same no-fluff practical business advice that you're getting from the show. It only takes a few seconds, but it makes a huge difference. Thanks for being a part of our journey to help others on their journey. There's a trend online right now that AI is like the silver bullet. It's going to solve all your problems. No, you need a product, right, in your business that solves a problem for your customers. Instead, you're being sold this idea that you need AI in everything you do. You need AI in the product itself. You need AI in the way you deliver your product. No, AI is just a tool, just like a microwave. A microwave will cook your food fast, But it can't come up with the recipe. It can't decide which ingredients go better together. It can't taste the dish itself to find out if it needs more salt or whatever it might be. A microwave is just a tool to cook things faster. And by the way, you can use the oven. The oven still works, right? The oven will still cook the food and it might even do a better job. So you need to see AI the same way. It's a tool that will help you produce something, but it's not going to produce the secret sauce. It's not going to come up with the actual formula of a great product. Listen, I've done more than one episode on how to build a software or a product through software with AI. And listen, AI can build me a software. It can do the grunt work for me and write the code. But what does the software actually do? What problem does the software actually solve? Who does it serve? Why would anyone pay any kind of money For that piece of software. That's my job as the creator of my business, as a creator of the product, is to answer those questions, not the AI's job. And that job and those answers to those questions is what's going to make you rich. That's what's going to make the money. The person that solves the problem better than others is going to get the lion's share of the market. It's going to actually make the money. that you're searching for. But AI is not going to come up with these ideas for you. They're not going to be able to understand the customer as much as you'll understand the customer. Yes, it could do some legwork for you. Yes, it could do some research. But at the end of the day, you need to make the decisions. You need to apply your taste and your discernment to make the right thing for your customer. Listen, we're going to geek out a little bit with some numbers, with some data. We're going to talk about what's going on right now in AI and how the gold rush is already failing for the market. MIT did this very interesting study I wanna share with you in 2025, recently, just last year. They analyzed over 300 AI adoptions across companies. So 300 different companies adopted AI in their business. 95% of these businesses rolled out AI and got zero measurable financial return, meaning they didn't make any more money when they applied AI and used it in their business. Only 5% of those 300 companies actually created real value through AI, and $30 to $40 billion were invested through these companies. Almost nothing to show for it. Sometimes as humans, we just see something in the news, we see something that's going on in the media, we get hyped up, we think, oh, there's an opportunity here. I should just jump on it. I should just do what everybody else is doing so I don't miss out. But we don't really evaluate if it's actually adding value to our business, to our lives, to our customers. And this is what today's episode's all about. So look at the numbers for what they are and understand how we can use this technology to actually help us so that we're one of the 5%. Here's the crazy thing about this study by MIT. What they found out is that the companies that failed, they didn't fail because of the technology itself. The models, the AI models, they actually worked. They're fine. But the failure was the learning gap. People didn't know how to use these models. They just thought that ChatGPT is going to solve their problems, right? They're just going to do the work for them. But you need to do something to make sure that the tool actually works for you. Just like I can't just buy a hammer and expect that all the pictures in my house are going to get hung up automatically. No, I have to apply the hammer. I got to use the hammer. I got to hammer some nails into the wall. Figure out where these photos or where these pictures should be hung in my house. What's the best placement? I gotta make sure it's straight. All this stuff, right? People are just relying on AI to solve the whole problem when AI is just a tool to help them through the process of building their product, of solving problems for their customers. So you need to understand that if you want to leverage AI, you gotta say, what's AI good at? How can I use AI to do that for me? Whether it's cleaning up my copy, Whether it's proofreading my work, whether it's writing code for an idea that I have come up with. We're gonna talk more in detail later about that, but that's a great takeaway from that study that the people that actually made it work understand how to use AI to be able to leverage their productivity. What about startups that are built on AI, like AI-driven startups, startups that use the technology of AI as their value proposition? As the reason why you should buy the product in the first place. Well, 80 to 95% of all AI wrapper startups fail. It's pretty crazy. And when I say AI wrapper startups, that's people that are using like the technology of ChatGPT or Claude and just putting a wrapper around it, putting an interface, putting a unique angle and saying, yep, here we go, this is a new product. Well, they actually fail because people realize I could just use ChatGPT without using this new product. They kind of shoot themselves in the foot. And actually 60 to 70% of these companies generate zero revenue. Zero. They're not even profitable. They're not even making a dollar. And only 3 to 5% of them reach $10,000 a monthly recurring revenue. So as you could see, it's not a silver bullet. The numbers don't lie. The average churn of these companies, of these AI wrapper companies, are 65% within 90 days. This is outrageous. That means At the end of 90 days, 65% of the customers that they got in those 90 days leave. So it's, they're constantly working with a leaky bucket, right? They're, they're not keeping any customers. You know, it was crazy because when I was running my software company, Webinar Ninja, our churn was at 7%, not 65%, 7%. And we were unhappy. We're like, this is too high. And we cut it down in half and got it down to 3.5%. The point here is, is that you gotta keep the customers cuz you work so hard and spend so much money. To earn a customer, to bring them into your business, that you don't want them to leave. You want them to continue to pay month over month. But 65%, that's absolutely insane. You spent money to get that customer's call. Ads, referrals, word of mouth, doesn't matter. The moment it rings out unanswered, that's not just a missed opportunity. 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That's upwork.com to connect with top talent ready to help your business grow. That's upwork.com. Upwork.com. So are all AI startups doomed? Well, actually, there's a right way to do this and a wrong way. And I'm going to give you 2 case studies, 2 examples To know what to do and what not to do. The funny thing is that the example of what not to do is a company I actually know. I know the founders of this company. I met them back in 2020. It's a company called Jasper, and they were a very, very powerful AI copywriting tool. They were like an early adopter of AI. They were kind of the poster child of generative AI when everything was kind of booming. And in 2023, their company was making $120 million in revenue. Every year. Okay. The valuation of the company was $1.5 billion. So they were considered a unicorn. I mean, founders everywhere were pointing at Jasper and saying, see, you can build a massive business building on LLMs, meaning that they used the technology of OpenAI, of Claude in the backend and allowed people to have like a nice interface through Jasper to be able to write great copy, copywriting sales copy for businesses. Then ChatGPT happened, right? ChatGPT came on stage and they totally destroyed their business. The revenue collapsed roughly $35 to $55 million. So it was a decline of 53%. Massive. Like in one year. Think about that. Layoffs, slashing of forecasts. There was a lot of turmoil happening in the business and the users started to realize that they could just use ChatGPT instead of Jasper for about 80% of the tasks they wanted to do. Now, the lesson that you can learn from Jasper's experience is that if your entire business is the AI, you are renting your business from OpenAI or Claude or whatever tool you're using in the background. And the landlord can just evict you at any time when they just make an update, when they decide, hey, I like what this person's doing with this company, we're just gonna add that as a feature inside of ChatGPT or inside of Claude. Now let's go to the flip side. Let's give you an example of a company that did it right. There's a company called Cursor. It's very popular in the vibe coding world. Cursor's basically an interface, a tool that you can use to be able to code and create software by just writing some prompts or writing English words, like saying, create me a software that does XYZ. And then it uses the technology of OpenAI and, uh, Claude in the background. Technically, this is also a wrapper with the same basic architecture of what we talked about in Jasper. And they've crossed roughly $2 billion in annual revenue. This is how much money they're making every year, $2 billion.

Why?

Why is this a completely different outcome than Jasper? Because the AI was never the actual product. What's the product that they're offering is an interface that's easy to use so that you can be able to code and ask questions about the code and fix bugs and be able to add features quickly. And then use the power of the AI of those models in the background. Tool, different thinking, opposite result. And another example is the company that I ran and sold, Webinar Ninja. Webinar Ninja is not the first webinar software. We didn't invent webinar software. The actual technical software or technology was called WebRTC, which was like low latency video, right? But we created an interface and an experience for our customer That was different from what's out there. People don't want to create landing pages. They don't wanna create the actual chat experience or creating an offer or automatic emails. We did that for them, and that's why we were valuable. Hey, I hope this episode is cutting through the noise, giving you a little bit of a wake-up call that you don't need to use AI for everything. If so, I want you to subscribe 'cause we have an upcoming episode I don't want you to miss, and it's actually pretty interesting. This episode is all about why the best way to master anything isn't through video. Yeah, I'm saying this as somebody who runs a YouTube channel and has published over 500 videos in my lifetime. Yeah, video is good for certain things, but if you want to learn something really deeply, not the best way. And I'll explain why. Subscribe so you don't miss it. So where does AI actually belong in your business? I want to be super clear about this. I'm not anti-AI. I actually use AI a lot. In my daily life, in my work, but I use AI like I use a washing machine.

Okay?

It's a brilliant thing to do repetitive, boring tasks. I don't wanna wash my clothes manually, you know, whether it's in the tub of my bathroom and scrubbing, you know, my clothes and washing 'em and rinsing 'em and then having to wring 'em out and then hanging 'em up. No, a washing machine does all that grunt work for me. And I look at AI the same way. It genuinely will speed up your work by doing A lot of things autonomously, a lot of mundane work. But right now, it's not going to replace you as the creator. You have to tell the AI what to do, and what to do is everything. You have to see your work as 2 different things: as thinking, as planning, as ideation, and then there's implementation. AI is great for the implementation, not so great for the thinking and the planning and the ideation. This is where you come in, right? Where you come up with the ideas, you come up with the solutions, you come up with the direction you wanna move in. And then once you make a decision, then you go ahead and you tell them to go ahead and implement through AI. Another way I learned this back in the day is the concept of, as an entrepreneur, you have to have 2 hats. The first hat is the CEO mode where you are making decisions, where you are thinking deeply about the solution. To the problems you're trying to solve. And then you have a different hat called the worker bee mode, where you just go ahead and implement the decisions that you made earlier. I learned this from a buddy named Chase Reeves. Chase Reeves has a great YouTube channel if you wanna check him out, but it's a great concept. And now you can use this concept with AI where you have to put on your CEO hat, make decisions, come up with the ideas, come up with the concepts. And then when it's time to be worker bee, when you're in worker bee mode, this is where AI can help you a lot to just implement the decisions. that you have already made. So what are some examples? Well, for example, I'm running a Christmas party, a Christmas party for entrepreneurs. It's called the Crazy Ones Christmas Party. And I need to send an email out to all the people I want to invite. Now I have some good ideas of how I want to write this email. And I have some, maybe some witty lines I want to include. And there's a tone and there's some things I want to make sure I mention, like the link to RSVP and the dates.

Mm-hmm.

And what we're going to do during the party. And I dump all this stuff in a document. And then from there, I can give it to AI to say, hey, clean this up for me so that it's a cohesive email. It could draft this email for me. And it comes back with a great drafted email in seconds. Okay. And then once I have that email, I can go ahead and modify it so it sounds like me. So I'm happy with it. So it doesn't look cheesy or, you know, it doesn't sound like my voice. And then I just pop that into my Gmail and I send the email. That saves me a ton of time because I'm not so good at the details. I'm not so good. At typos. If you know me personally, you know that I'm the typo king. So this is a great example— drafting emails. It's also great at writing code. I mentioned this several times on this podcast. My user experience is fantastic when it comes to asking AI to come up with great software for ideas I came up with, with decisions that are driving the AI. It's also good for repurposing content like stripping a transcript out of audio or video. It's great at summarizing a meeting. Like if you record a meeting with using a tool like Granola, for example, great at summarizing what was said and what are the to-dos. Again, this is great for boring tasks you don't want to do grunt work, but when it comes to coming up with what you're going to talk about in that meeting, that is your job as the leader. Notice the pattern of all these examples. I bring the judgment, AI brings the grunt work. I come up with the decisions, I come up with the ideas. AI then rolls up its sleeves and does what I tell it to do. And this is one of the most important parts of the whole episode. Okay? The reason why I'm pushing you to do this is that decision-making is a muscle. You don't want that muscle to fatigue. You want to continue to use your decision-making muscles in your head so that you get better and better at it. And you don't just delegate decision-making to AI, because as soon as you do that, it's a slippery slope and you Aren't able to make really tough decisions in your business. I have to say, through the failures I've had, through the tough days I've had through my 20 years of entrepreneurship, the best thing I got out of it is that building of that muscle of being able to make decisions and also make decisions quickly without second-guessing myself. So here's your prescription. Start with the problem, not the tool. Every time you are starting any kind of business, starting any kind of project, never ask, how can I use AI in my business?

No.

Ask what painful problem do I solve? Who do I solve it for? And then ask, does AI help me deliver this faster, better? If so, then I will use AI. If not, you don't have to use it, right? You're not obliged to use AI in everything. The tool comes last, always. The solution, the decisions, the problems that you're trying to solve, these are top of mind. These are the things that you are going to deal with. Number 2, if you're building a company, a product, a service using AI, you're AI-powered, right? You want to make sure you ask yourself one question. Let's say, for example, the models that you're using inside this product, if you're using OpenAI or Claude or whatever it might be, if those companies just shipped your product as a new feature next month, would your customers cancel your service? Would they cancel your product? If Claude all of a sudden started doing what your product does, would they cancel? Or do you create some sort of uniqueness in your business? And I'll give you an example. I had a hobby project. I created a product called Spoken, spokenhq.com, if you want to check it out. And this is a product that I don't really sell. I just created it for fun. But what it does is that it reads out your newsletters. It's a little widget that you can add to your newsletters where people can click a play button and and they can hear somebody read, an AI or yourself, the, your voice or an AI version of yourself reading out emails. Now, the reason why I created this product is because I thought that a lot of people might be busy. They don't read your emails or your newsletters, and a good idea is just to get somebody to read it out to them. Maybe they're driving, maybe they're eating their breakfast, and it's a time saver. Now, why does this have a moat around it? Because there's very low chance that Claude or ChatGPT is gonna create this as a feature where it's like, You can copy and paste something and then create some code and put it inside a newsletter and be able to, uh, read out any text. It's a little bit far-fetched. Why? Because it's very niche. I'm solving a specific problem for people that send out newsletters. It's not as general as what ChatGPT or Claude normally does for their customers. So this is what I mean by creating a moat. And a good way to do this is to niche down, is to just serve a specific problem or pain for a specific customer. Next, I want you to start thinking as using AI as leverage and not as your product itself. I'm not selling AI. I use AI to serve people better and faster. That's a good way to look at it. That's the difference between the 5% and the 95% that we saw from the MIT study. So use AI as leverage to help do what you normally do using your expertise better. And lastly, you want to protect and sharpen your judgment. You want to read, you want to study your customers, talk to your customers, make that hard call and speak to them and find out why are they using your product or service? Why did they cancel your product and service? What are they using instead? How are they solving this problem now that they're not using you? These questions, these conversations are gold because they're going to help you create better solutions for your next customer and the customer after that and the customer after that. I have to say that those conversations that we've had over the years through any product that we sold have helped us tremendously be able to create a better solution for customers. Maybe not the customer that left, but the customers that will come in the future. They're gonna think twice before canceling because we're solving their problem completely. To wrap up, I just wanna say a few things. Yes, AI is incredibly powerful. I think AI is one of the most powerful tools ever handed to entrepreneurs. And that's exactly why it will not make you rich because it's just a tool. It's up to you to come up with the solutions, up to you to come up with your own discernment, your own taste. Listen, think about the things that you love, the things that you appreciate, the things that you enjoy, whether it's your favorite artist, musician, and you love their songs, whether it's your favorite director. I'm going to see Odyssey this weekend. I can't wait. Christopher Nolan's my favorite director. Why do I watch his movies? Because I love his judgment. I love his taste. I love the fact that he doesn't use CGI as much as possible. That's why I watch his movies, not because of any of the tools he uses or the type of cameras he uses or any of that kind of stuff. So that same idea, the way you consume information, the way you consume things that you love, is applied to your business and your products and services because you're just on the other side of the coin. Your customers are going to love using you because of you and because of the decisions you make. Thanks so much for tuning in. I hope today's episode kind of cut through this AI noise. Listen, you don't have to do anything, okay? This is why you became an entrepreneur in the first place, is that you want the freedom to choose what to do. And if you feel like AI is not helping your business or helping your customers, you don't have to do it. That simple, right? You don't have to be bossed around by what's being said on social media. If you want to continue learning, there's a great episode we recently published and you can find it on whatever platform you're on right now, whether you're on Apple or Spotify or YouTube. It's called Why Doing the Opposite of Your Competition Works. I know that sounds a little bit nuts, but it actually works, and I explain why in the episode. Go ahead and check it out. If you found today's episode helpful and you want more practical business lessons to help you start, grow, and scale your business, the best thing you could do is subscribe to this podcast. Hit subscribe or follow on your favorite podcast app, the one that you're using right now, whether it's Apple or Spotify or By hitting subscribe, you get our next episode automatically, and it's the best way to support the show. It's absolutely free, and it's a way for you to commit to growing your business. And now that you've subscribed, I'll check you in the next episode.

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