A few weeks ago, I was out in Chicago to talk to a group of executives at a three-day class called “The AI-Ready Leader.” It’s been a long time since I was in a room of corporate employees, let alone with the job of serving as the voice of small business among 50 senior leaders.

In the first session, everyone was confident, positive, upbeat. People were excited about the possibilities. They could see the growth opportunity of AI. Everyone spoke highly of the efforts they were leading for their employers. 

To start my talk, I asked everyone to close their eyes and to answer a few questions by raising their hands:

I was supposed to lead a Q&A about small business opportunities. 

Instead, we talked about fear. 

When asked about how their teams were responding, many folks mentioned it hadn’t even occurred to them that people weren’t excited about AI transformation. Let alone that they might be quietly resisting or even sabotaging their efforts. But with 70% of Americans opposed to data centers and 50% concerned about AI, there’s clearly a lot of “somebodies” who don’t want this.

As we started to talk about our feelings as humans, there was less froth. Less enthusiasm. One person even took off his badge and said, “I am saying this as me, not my company.”

I’ve been thinking about this a lot, because while we talk about facts -- strategic growth, token costs, vibe coding, smaller human teams -- we’ve skipped over an awful lot of big feelings. 

The feelings conversation sounds more like… 

For most people, “being OK” means keeping a familiar job at the same or higher rate of pay. For a small business owner, it may also mean paying the mortgage, paying the team, and keeping enough cash flow in the business to stay alive.

This is why we have to be careful when we talk about AI.

AI strategy is not a business strategy. Sure, AI can become part of the strategy. It can change the tools, the economics, the staffing model, the customer experience, and the market. But it still has to sit inside a shared vision of what success looks like.

For the self-funded founders I work with, the discussions start there:

If we don’t plan around those things, no matter how shiny and promising AI might be, we lose them. And if you’re like many of the business owners I work with, the “why” behind your business, your values, and your vision for what you’re building are non-negotiable.

Yes, you adapt and evolve. And you can also draw a line in the sand of what parts of yourself and your business you’re not willing to push to the side.

Along with your excitement about an internal use case or an opportunity in the market, ask yourself: “Is this a good idea for this business, with this team, this cash flow, this risk tolerance, and this reason for existing?”

You also need to consider your risk, as well as your governance:

About a year ago, I rolled out a new, closed AI system to my team. We trained it on things like this newsletter and our SOPs. It could use a limited number of trusted outside sources, most of which we paid for. 

I brought the team to prompt training. We reviewed the internal cases where this would speed up our work and create some redundancy around things that had mostly lived in my head. I expected enthusiastic high-fives.

Instead, someone quit. 

I had considered the safety of our data. I thought through the client issues and the guardrails. But I had not considered that 25% of my workforce would simply decline to participate. And, it turns out, most of the people I was presenting to hadn’t considered this, either.

On the other side of this coin, I’ve had to shut down overly enthusiastic and rogue use of free and unapproved AI tools. Knowing that we’ve got some people who say “never will I ever” and others who stop thinking and start prompting, I changed our hiring requirements. 

Now, I look for curiosity, nuance, and respect. People who are curious but also wary of cognitive surrender.

They make us ask better questions, decide what the business can absorb, separate opportunity from distraction, and (most of all) ask what a human needs to do. As a team, we also ask what none of us want to do. If no humans want the job, how do we make sure we’ve really automated it to the point that we don’t need to be involved? 

This is the kind of AI conversation I think more small businesses need to be having:

These are better questions to ask at the outset instead of defaulting to: “Does it scale? Is there a market?”

Because most of us left corporate life for a reason. 

We were excluded, pushed out, or opted out. So we’re not trying to recreate a lighter version of corporate thinking or a 15-hour workday. We’re trying to solve interesting and meaningful problems in a way that gives us more control, autonomy, and sense of purpose, without re-creating the system that didn’t fit or have space for us in the first place.

Most corporations exist to take a pile of investor money and make it into a bigger pile of investor money. A problem might get solved along the way, but there’s always a market motivation. “Where’s the opportunity? How big is it? Who already has the capital? Who can buy? Who can scale?”

Small businesses and self-founded founders usually start somewhere else: with problems or communities that have not been well-served by historical wealth. 

There is no pile of money. There might not be a known or obvious market. AI might offer a way to solve a neglected or overlooked problem, with fewer resources, so that it becomes an interesting place to apply a pile of money. But there might be literally no sensible application of AI for some of these problems, too, or a community that wants their problems to be solved that way.

Unlike hyperscalers, you’re probably not itching to take out the largest loan you can to plunge into your AI strategy. 

It would be one thing if AI were the only change, but you’re also navigating access to health insurance, tariffs, rising costs, a shrinking labor force, and general fatigue from an unstable US environment. You can’t operate at a deficit for years, let alone even for a couple of months. 

So when someone says every employee should have a paid AI tool, I want to know what that does to the business. Most of us spend less than $125 a month on all of a team member’s subscriptions. Doubling that may sound small in some rooms. In a small business, it’s not small at all. 

Adding AI has to make financial sense:

We don’t have money to set on a fire. We’re not living in the land of “Oops, we used our $2 billion annual token budget Q1, but look at how many agents are active on our leaderboard!” We need to know how these investments turn into revenue.

This is hardly a new story. A new tool is priced to get you to build around it, with the expectation that the subsidized ride will last forever. But of course, the price goes up, the product changes, the service gets worse, and suddenly you’re stuck.

Ye olde enshittification has struck again.

It sucks for everyone, but small businesses disproportionately feel the effects.

Suddenly you’re paying extra to speak to a human. You have fewer features at a higher price. The thing you built into your workflow becomes another private equity cesspool and then doesn’t exist at all.

Sometimes yes. Sometimes no. We still have humans, and in some companies that may be the point.

You undoubtedly still go to some businesses that have avoided 30 years of digital and mobile transformation and are going strong. They have a shop land line and a carbon copy receipt book. They use QuickBooks Desktop and don’t advertise. 

And guess what? They’re fully booked. Why? Because the customers like the throwback personal experience. Their history is on a notecard. The appointments are written in a book. A human answers the phone. And they do good work.

Still, it’s something you should think about. 

Some customers want a frictionless experience -- no humans, no waiting, no “nos.” And yet, there are increasing numbers of people who are opting back into discomfort. They want less tech, more humans. They’re buying simpler phones and using browsers that allow them to opt out of AI tools. They’re buying from a shop on the corner, even if it costs a little more. They’re standing in line for an hour and talking to, gasp, strangers.

When it comes to AI, I don’t think there’s one small-business answer “to rule them all.” Some companies will radically transform the way they work. Some will use it carefully and narrowly. Some will lean into what small business has always been best at: being more human and building community. 

All of those paths are valid.

Is this a chance to amplify your purpose? Solve a bigger problem? Have more impact? Enjoy your life more? The key here is stepping out of fear and asking yourself what path is right for you.

If you want to have a deeper conversation about AI in your business, let’s talk. Book a free 20-minute strategy session, and we can get you pointed in the right direction.

Word of mouth. How do people find you? Referrals, networking, and re-engaging past customers remain at the top of the list. It’s important to try new things, but don’t forget the old ones. Doing a good job and asking your customers who they know that might need you is still astonishingly effective.

Ranch dressing. Or “ranch sauce” as our international guests say. Evidently, the rest of the world wants to join us in this quintessentially American part of Flavortown. To the point that the TSA is already advising people that they must check their ranch on the way home. At least one of you will become an international ranch supplier.

Sports. Let’s be real -- if you like sports, you’ve been watching four or five things a day at an uncasual level for the past few weeks. I popped into a bar with my dad at 1:30 in the afternoon and Knicks fans had already taken all the tables. I am now monitoring people who use bars as co-working facilities.

ICYMI, here are resources you should know about:

The student loan deferral party is over, folks. We’ve known for a while that Biden-era student loan forgiveness is dead. But when a slate of new OBBBA rules take effect on July 1, the party will really be over. Most importantly, if you’ve been enjoying forbearance under a SAVE plan, you’ll need to opt into one of the new (likely more expensive) plan options and resume payments. On top of that, the Grad PLUS program has been terminated, and the Parent PLUS program has been significantly limited. There are other changes going into effect on July 1, so read up now. Even if you don’t have student loans, your customers might, and this is yet another hit to their disposable income.