HOWARD TULLMAN JOINS LISA DENT ON WGN RADIO TO TALK ABOUT HIS NEW INC. MAGAZINE COLUMN ON A.I. PLANNING

 LISTEN TO THE SHOW HERE

LISTEN TO THE SHOW HERE

NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN - AND A.I. ENGINE DEMOS

 

How to Start Smart With a Plug and Play AI Model

There is a better approach to AI for businesses that don’t want to shell out millions of dollars to Google or OpenAI to build their own custom version of ChatGPT.

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

Oct 7, 2025

It’s hard to say whether there are more columns arguing that, if you haven’t already infused your business processes with AI you may be too late and consequently doomed, or that the vast majority of corporate AI projects to date have been miserable and costly failures. The latter parade of horribles is led right now by recent M.I.T pronouncements asserting that something like 95 percent of the serious large organization efforts have failed.  

There are plenty of reasons offered for the failures of these initiatives, but they sound unsurprisingly similar to the explanations offered when the pace of adoption and implementation of any new tool or technology is slower than the hyped expectations—and when the promised payoffs in savings and enhanced productivity among others fail to materialize immediately. The real wonder is why resistance to change comes as any surprise to anyone at this late date.  

In the case of AI, there is another debilitating and discouraging aspect of the process, which is that even after all the time and analysis and reviews aimed at attempting to determine why some given project hasn’t worked, there’s almost nothing to be gathered or learned because the “black box” that you’re attempting to interrogate and explore is just that—a black box which performs its function in somewhat mysterious and unclear ways that no honest auditor would even pretend to fully understand. 

Needless to say, it’s hard to extract lessons or process improvements in order to achieve better future results when the underlying engine driving the outputs (a) has no memory, (b) doesn’t really “learn,” and (c) doesn’t accept or incorporate input, instructions, and corrections in any consistent or measurable fashion. It just is what it is and you’re offered the opportunity to take it or leave it. This isn’t the most appealing context or foundation to try to build the next phase of your business upon.  

To be clear, the opaqueness and obstinance of the primary AI foundational platforms aren’t even the most pressing concerns for most smaller companies and businesses which are trying to incorporate AI into their organizations. These firms — which is to say the vast majority of all the entities in the world except the mega-corporations — can’t afford to spend their scarce and critical resources on broad AI experiments which may or may not ever come to fruition. Even more importantly, they are facing a much more pressing set of risks and concerns within their own companies presented by the actions of their own people.  

Close to 60 percent of employees are using AI tools not approved by their employers, according to a recent Cybernews survey. Worse yet, more than half admit that their direct supervisors or managers know about their use and don’t object, while another sizeable group reports that their managers don’t care. In fact, the survey found that it was executives and senior managers who were the most likely to be using these tools. But the critical finding from the survey is that around 75 percent of the respondents using unauthorized tools admitted to sharing sensitive data with them. And the companies themselves have no control or even information about which team members are doing what. Once the data enters any of these AI platforms, the user has no control over whether the information is stored, reused or exposed to third parties. 

There is a much better and smarter approach for SMBs and, frankly, for just about any business not willing to shell out millions of dollars to Google or tens of millions of dollars to OpenAI to build their own custom version of ChatGPT. That’s what I call the “plug and play” solution. Simply stated, this is a “portable” query engine that any business can install on their own premises and in their own machines and networks.  

Typically, there is an initial fee for installation and implementation of the system—roughly $50,000 or less—and then a monthly or annual recurring cost which may vary with the volume of usage but which isn’t likely to be a major cost and can be cancelled at any time. This puts a known cap and realistic limitation on the entire cost of the experiment. 

The firm designates and assigns an underlying selection of data for the engine (the corpus) to operate on, interrogate, and extract answers from. All employees have access to the system and can simply ask whatever questions about the data which they need further information about, request analytics or compilations of segments or selections of the data, or request the creation of documents, reports, or presentations of parts of the data which are relevant to areas or questions they are dealing with. One key consideration is that by limiting the dataset to material relevant to the specific business and activities of each company, the fit of the engine to the likely inquiry scope is better and the overall costs of operation as well as response time are reduced since there is no need to “search worldwide” or attempt to “boil the ocean” in order to develop and respond with timely and accurate information.  

Note here that the system has two critically important guardrails in place which govern every query. First, it knows what it knows, so it’s designed to report back that it can’t answer certain questions. Second, it knows the scope and limitations of what queries are proper topics for inquiry and rejects irrelevant or immaterial prompts. For example, the system doesn’t know the meaning of life. In addition, the system creates a log file of every query and every answer which can be reviewed by management to track activity and also readily determine how often and how effectively the system is being used.  

Other crucial elements of these systems are that there are evaluation, review and edit functions which in essence let the system “learn” and improve its answers and responses on an ongoing basis as well as allowing for corrections and updates—all within the control of the company itself and without ever allowing any such proprietary information to leave the premises. Security and control as well as demonstrable growth in efficacy are all central to the system. Because the system also permits any user to evaluate and rank the value and accuracy of any answer, there is a real time feedback loop that encourages and rewards employee use and engagement. This prospect makes it far more likely that team members will adopt and regularly employ the system especially as they see their own input and roles in the process incorporated into the system.  

Bottom line: you can put a toe in the water at a reasonable cost and try to expose your people to the upsides of these next-generation tools without incurring substantial expenses, without exposing your proprietary data to the outside world in an uncontrolled and unaccountable manner, and without encouraging or permitting your own team members to go outside the walls and waste time and energy randomly exploring the large LLMs without any particular guidance, support or benefit to your firm.  

I have installed two sample systems on my own website in the lower right-hand corner. These are free to use and to experiment with for all readers. The white link has a corpus which consists solely of my hundreds of Inc. magazine columns published over the last decade. The black link is a much broader corpus of all my books, columns, speeches and presentations, etc. which will attempt to answer a far broader range of questions. Give it a try before you decide to buy. Test before you invest.

 

NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

Why Now Is the Time to A.I. Audit Your Business

A.I. isn’t an optional add-on. It’s foundational and roughly equivalent to electricity or the internet.

 

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

Jun 17, 2025

 

In most of my conversations over the last year with new business owners and seasoned operators, all of whom are all concerned about ChatGPT’s impact on the economy, I’ve found an interesting contradiction in the way entrepreneurs are approaching the use and incorporation of A.I. I see a whole lot of wait and see.  Is it a genius or a clown?

While the novelty is starting to wear off, and the hiccups and hallucinations are certainly reasons for caution, the critical need to investigate, engage with and integrate these new technologies has yet to be fully appreciated and folded into the planning and operations of millions of businesses that really can’t afford to wait. They’re taking their time when the time to move is now and the timing couldn’t be more critical.

It’s not that hard to see why they’re conflicted. They’ve lived their entire business lives trying to be innovators, first movers and early adopters of new technologies in order to stay ahead of the competition. The “ready, fire, aim” attitude has mostly served them well over the years. But the truth is that smart entrepreneurs are far more careful and conservative than we’ve been led to believe. In fact, many are control freaks.

So, when they’re confronted with a pitch that basically says they should turn over some of their business processes to the “machine” because it will be good for their bottom line, they’re more than a little wary and reluctant to jump right in.  00:0001:49

Add to their basic mindset the fact that they understand almost nothing about how these black boxes really work, that they rarely have anyone presently onboard who can help them learn or who is up-to-speed on AI themselves, and that things seem to be moving ahead and changing at a ridiculously rapid pace. This makes for a perfect formula for angst and analysis paralysis. But, as is always the case, worrying never gets you anywhere and standing still is never the right solution.  A bad decision is often better than no decision at all. 

The good news is that there are simple and cost-effective steps forward –“toes in the water” if you will – that every company can take to get the ball rolling, and none are “bet the ranch” actions or expensive decisions. They’re simply smart ways to get smarter sooner.  

Every business today needs to conduct an AI audit if they don’t want to be left behind. AI isn’t an optional add-on at this point; it’s foundational and roughly equivalent to electricity or the internet. In the call center industry, for example, it’s now estimated that AI agents will handle 70 percent of all contacts by 2028. 

The first order of business doesn’t require technologists or AI experts. It’s simply a comprehensive review by your senior leaders of various areas of the business where AI may be able to help. Not, to be sure, by working immediate miracles (in spite of all the hype about eliminating hundreds of jobs overnight), but by helping you identify improvements, import better practices, and eliminate obstacles in your current operations.  

In my experience, this audit and review exercise also encourages your people to do some wishful thinking, to look forward to what could be, and to even think outside of their day-to-day, nose-to-the-grindstone activities and responsibilities. It’s a literal license to iterate and constantly improve.  

Broadly speaking, I’d break the critical categories down into four major buckets: automation of various internal processes, automation of various external processes, cleaning up and streamlining basic operations, and all your employee issues from augmentation, robotics, and realignment to concerns around recruitment and retention.

Once you’ve built a hit list and a wish list, you can bring in some professional help, a prompt engineer or two, and other AI resources to start building some solutions. Here are four examples.

Internal processes 

The long-term dream of a paperless digital world remains a remote and ambitious fantasy for millions of companies still drowning in reams of paper reports, receipts, requisitions, and records of all kinds. From the accounting department to the shipping center and personnel department, AI tools will create massive improvements in the traditional systems and antiquated procedures used in virtually every business, government agency and regulatory authority. Automation, digital records and AI-enabled identification processes will improve diagnostics in medical facilities, security in all of our transportation hubs and public areas, and in the entire finance world. 

External processes 

As the world becomes increasingly comfortable with ATMs, self-service checkout counters, and other forms of automation, AI systems can speed up, simplify, enhance and scale all of your front-of-house interactions with customers, clients and consumers including sales, service, and support. Millions of bank customers already acknowledge that they would rather not deal with a teller if efficient alternatives were available. AI tools can also streamline, simplify and optimize websites which, in many instances, companies haven’t reviewed or updated in years to improve customer experience and speed up the process.   

Basic operations 

Real-time review, ongoing support and enhancement, and timely intervention to avoid problems, breakdowns and other system interruptions are already being implemented in manufacturing firms around the world. The ability to project needs, demands and resource requirements will build even further upon the economic success of many just-in-time supply and warehousing chains and save huge amounts of time and money. Having AI systems review months or years of prior actions and activities and generate detailed analytics on the fly will provide insights, new directions, and even concrete suggestions for process improvements and better use of personnel and other materials and resources.  

People  

AI and related intelligent agentic devices and robotics can augment and supplement the work done by your employees to improve accuracy, capacity and safety as well as avoiding burnout, repetitive behavior injuries, and human errors. Systems are already being designed to identify, evaluate and categorize job applicants on a variety of criteria, to assist in scaling and speeding their documentation, onboarding and training, and to outline and create multi-year individualized career paths for each team member which serve as great recruiting tools and help to manage education, expectations and attitudes as well as improving retention. MIT and Nvidia Research have already developed a new algorithm that enables a robot to “think ahead” in a planning process and evaluate thousands of alternative paths in seconds. 

The bottom line is, you don’t know what you don’t know about your own business until you ask. Now’s the time to start asking. There’s no better, more cost-effective system than an AI system built for and based upon your own data as well as employing comparable data and other information drawn from the industry, your competitors’ reports and activities, and all manner of other external information and data sources. An AI audit is step number one.  

NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

Why Small Businesses Should Celebrate Genericide

Patent and trademark enforcement has become an important economic tool for entrepreneurs.

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

Jun 10, 2025

 

Nabisco’s Nilla Wafers have been a reliable staple in cookie jars since 1898, but the brand name is only 58 years old. In 1967, Nabisco rebranded the product from Vanilla Wafers to Nilla Wafers. Unlike “Nilla,” a protectable name that could be trademarked, “Vanilla Wafers” had become a victim of genericide—when a brand name loses its identity thanks to consumers using it to refer to all products in its category. Like Zipper, Aspirin, Cellophane, and Escalator—whose owners had failed to preserve their legal and proprietary status—the sweet treats had become so common and popular that the name came to be regarded as generic.

Today, Genericide is one of the only “-cides” that small businesses should cheer for. Patent and trademark enforcement has become an important economic tool for all manner of merchants. Last month, Mondelez International, which now owns and manufactures Wheat Thins, filed a federal lawsuit in Chicago to stop the multinational supermarket chain Aldi from selling store-brand products that blatantly copy and infringe on its trademarks. The crafty and innovative marketers at Aldi have been selling crackers called Thin Wheat, which Mondelez argues could be confused with Wheat Thins.

The classic examples of aggressive and successful litigants are Kleenex and Xerox (still protected) and, more recently, Google. It will be interesting to see what happens with ChatGPT and Ozempic. With millions of dollars in sales and huge investments made by large companies in building brand equity, you can be sure that the rip-offs, the hairsplitting, and the lawsuits are coming.

When patent and trademark enforcement is abused, as it has been for decades in the drug business, with the continued blessing of bribed Congressmen, it ends up costing consumers millions of dollars in inflated pharmaceutical prices. It also prevents important and widely used drugs that have been around for decades from becoming generic and subject to lower-cost production, duplication, and distribution of generic versions by other manufacturers.

Trademark or patent expiration is the worst nightmare of biopharmaceutical companies like AbbVie, AstraZeneca and Bristol-Myers. Low-cost competition is a close second. Mark Cuban’s Cost Plus Drugs might well be in third place. And to be very clear, this isn’t something trivial. There are thousands of lives hanging in the balance, even as MAGA enabler and Iowa Senator Joni Ernst snidely notes that “we all are going to die” eventually. High prices make it harder for millions of consumers who need the drugs to access and afford to pay for them.

One of the main ploys of the pharma frauds is to artificially extend expiring patents and trademarks (which would open the market to generics) to continue to suppress and exclude competition and keep prices as high as possible. This approach, often called “evergreening,” consists of reformulating the same drug into extended-release versions, creating new delivery methods, changing dosages, and seeking broader and additional uses for the drugs. All of these strategies are accompanied by massive ad campaigns and direct attacks on the efficacy of substitutes and any generic alternatives.

AbbVie, for example, was able to secure and maintain exclusivity in the U.S. market for Humira for over 20 years after initial approval. AstraZeneca built Nexium into a $5 billion annual product line by rebranding an older drug, claiming it was a new and improved version, and limiting distribution. Bristol-Myers litigated for years with various generics and conducted repeated lengthy trials to prop up and build Abilify into a $9 billion product line.

There’s some modest good news on the horizon, although much of it will need to await the departure of the Orange Monster and his flunkies, who are comfortably in the pocket of Big Pharma.

Increasingly, and especially after the pandemic, which effectively democratized and dissipated much of the mystery of medicine, millions of consumers are wising up and moving from the expensive brands to store brands, OTC products, and generics. Much more needs to be done to break through the ongoing consolidation of drug manufacturers; to break down the price-gouging medical oligopolies; and to reform, improve, and actively enforce all of the available legal and administrative regulations and limitations.

We can live with bands like the Eagles and Led Zeppelin extending their shelf lives and livelihoods by replacing dead band members with their somewhat talented sons, but our medicine is life-changing and lifesaving. We shouldn’t tolerate or accept parasitical pharmaceutical companies that delay and defer the availability of critically important drugs for years to maximize their profits.

 

NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

The Age Wave is a Better Bet for Entrepreneurs Than A.I. 

Money may be pouring into A.I., but if you’re looking to start a business, there’s a huge market in more mundane areas, such as serving the rapidly growing number of seniors.

 

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

MAY 6, 2025

It seems that every young entrepreneur these days is racing to imagine, build and deploy new AI-infused products and services to meet expected and often wished-for demands for solutions to unknown problems and cures for unknown diseases. They speed ahead whether or not it makes even the slightest sense to incorporate AI as a critical component of what they’re hoping to build. 

It’s also unclear that they even understand exactly what they’re pitching when pressed to explain the technology beyond the superficial buzzwords that ChatGPT will happily supply for them. But nobody wants to miss the parade. And equally anxious investors are chasing similar dreams and throwing money at these stories with reckless abandon, as long as the pitches contain those magic words. 

This frantic approach is costly, risky, uncertain, and the playing field is already grossly overpopulated with well-funded participants of all sizes. Yet because the underlying platforms that drive all these efforts are already largely controlled by a few tech giants, the ultimate economics of even the most successful efforts will be questionable.  

While all the challenges and obstacles are clear, no one honestly knows what the demand for any of these offerings will be, and how any startup will be able to differentiate itself, reach critical scale, and avoid being crushed or obviated by the big guys. This is going to be a heavy lift and a long haul for rewards that are speculative at best. 

The opportunities in our aging population

Forget the shiny objects: there are huge unmet opportunities to create simple, inexpensive and effective offerings for the immediate problems of millions of older consumers in our rapidly aging population. Businesses that represent attractive investments at considerably lower risk. Where entry and minimum viable product (MVP) costs are low, milestones and success metrics are easy to define and measure, and it should be clear in a relatively short time whether the dogs are interested in eating the dog food.

In 2025, more than 11,000 Americans will turn 65 every single day, or about four million folks a year, driven by the Baby Boomer generation, (born between 1946-1964). New and important products and services for boomers don’t require the capital, compute, natural resources, or technical expertise associated with chatbots, LLMs or next-gen AI models. These people have problems, plenty of cash, are still inexpensively reachable through traditional media channels and membership organizations, and they acknowledge both their needs and the need for solutions. They don’t require convincing as much as they simply need to be informed, educated and encouraged to act in their own best interests.

Apart from bragging rights, shiny object syndrome, and peer pressure, you have to wonder why more new business builders aren’t focused on meeting these massive, albeit mundane, needs.  They could make a great living while they’re at it. I realize that good, solid businesses might sound boring to certain people looking for the next moon shot, but it’s hard to miss some of these substantial market gaps when they’re staring you right in the face.

You can call this strategy “catching the next age wave” and it reminds me of a great Warren Buffett quote. He said: “I don’t look to jump over seven-foot bars; I look around for one-foot bars that I can step over.”

Three considerations about the market

Broadly speaking, especially if you’re an involuntarily unemployed grown-up looking for a new challenge, I’d suggest investigating three critical areas of non-medical, elder assistance where there are immediate openings to set up shop without even leaving your home or neighborhood. A little planning, some modest preparation, and a little research will save you a lot of time, money and shoe leather. Your friends, family and neighbors will readily support leads, suggestions and recommendations as well as introductions to more prospects and target customers and consumers than you can imagine.

Why? Mainly because there are no communities in this entire country without thousands of individuals in need of these kinds of services and support. Three initial observations to provide some context.

First, many of these services may exist for high-end, well-banked and connected individuals, but they are virtually non-existent for middle-class consumers of any advanced age.

Second, to the extent that any of the vendors purport to offer any in-person services along these lines for technology products or mobile devices as opposed to tele-support, the delivery personnel are universally abrupt, impatient and unempathetic kids who no one wants to deal with, or welcome into their homes and private matters, and who are typically somewhere on the behavioral spectrum. There’s a reason Best Buy’s guys are called the Geek Squad.

Finally, and more generally, the ideal entrepreneurs and operators of new service providers in these areas will not be young people. They are mature individuals, disciplined and hardworking, coming from prior careers in the corporate world, insurance, banking, and even government, and who are organized, well-groomed, seasoned and presentable.

Three services the market needs now

The key areas where I see very few players, but lots of potential, are assisted access, assisted giving, and assisted relocation.

Assisted Access Businesses are those primarily addressing the needs of seniors who have been left behind by the rapid advances in technology. Services can include simplified tech support and user education; hands-on, hand holding and in-person training; application installations and regular updates and upgrades of equipment.  Seniors need all manner of confidentiality protection, device security and storage, as well as recording, retention and retrieval of critical information regarding their finances, passwords, bank and service accounts, and other verification procedures and scam warnings.

Assisted Giving Businesses address a different area in which seniors and homeowners in particular are uninformed, unsupported and largely incapable of acting efficiently and intelligently. While there are zillions of criminal and fraudulent schemes targeting seniors that purport to be serving charitable and philanthropic causes, here again my focus is on some much more mundane, but no less important, services. Boomers have needs and concerns regarding the timely, pre-death disposition of personal property, artwork, family heirlooms, and jewelry, for example, which may be generically addressed in formal wills and estate documents, but which typically are much better and efficiently addressed while the owners are still living.

Unfortunately, here again, with the exception of a tiny percentage of precious objects and works by well-known artists (which are still difficult to have appraised or sold, even at auction), there are simply no organizations, services or other providers to help seniors plan, inventory and then rationally and prudently dispose of these objects. Of course, some portion of the property and other possessions may be desired by family or heirs, but in most cases – even if nearby family members have some modest interest in assisting – the burden of all the effort ultimately falls on the seniors.   

Assisted Relocation Businesses help seniors quickly and efficiently sell their homes at realistic prices and also simultaneously provide guidance and support for these individuals to move into smaller owned or rented properties or into assisted living facilities. Moving Station is one of the smart early players in this space. This is a very complex area and, in most cases, requires close coordination to ensure smooth transitions. One other difficult and emotional part of these transactions is how painful and agonizing they can be for all of the parties concerned and especially other younger family members. Having objective, independent and supportive intermediaries is a crucial component for closing these kinds of deals in a timely fashion.

Ultimately, what the most successful operators of these new businesses will be selling are themselves as well as comfort, reassurance, and attention to detail. No one’s gonna care how much you know until they know how much you care….about them, their affairs and their future.

NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

Time to Ask Some Tough Questions About AI 

Has there ever been as much hype about a product that has yet to prove its value for most businesses? That doesn’t mean you shouldn’t take a hard look at what AI might do for you. 

 

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

MAR 4, 2025

You just might need AI to help you list all of the issues and concerns that surround AI today.  

One of the most persistent worries in the business community is whether any of the various large language models (LLMs) are really ready for prime time and for widespread adoption by companies looking to incorporate these new technologies into their day-to-day operations.

Even if you are willing to put aside all of the commentary about hallucinations and false references, and the circularity problems raised by these systems blindly ingesting the garbage already being generated by other AI systems and thereby diluting the value and accuracy of their own outputs, you still reach the fundamental question of which version of the “truth” your own people can rely upon. Or even choosing among competing offerings that are now creating and delivering inconsistent and conflicting results.

It’s a very tough choice for the IT department to decide which LLM, if any, to endorse and adopt at this point. While a segregated sandbox to be experimented with wouldn’t cost a bundle (apart from the overhead and personnel time), once any firm tried to incorporate these systems into their own workflow at the enterprise level and install it in hundreds of seats, you’d be talking about a few hundred thousand dollars.

I guess that if you don’t care where you end up, and you’ve got money to burn and want to tell your board that you’re doing something, any road will get you there.

A free consumer offering and a novelty accessed by millions of curious users is one thing. People will try anything for nothing, especially folks with plenty of time on their hands and nothing to lose. But this is not a sustainable solution for serious operators on either side of the equation and – as we have already seen – it’s also not a remotely profitable model for the primary providers, since they lose money on every inquiry.

Why They’re Trying to Get Everyone Hooked on AI

All the big guys are racing to create a viable AI assistant for the little people in the hopes (as has happened in the past) that adoption from the outside in (remember all the ad world creatives using Macs) will eventually dictate which larger solution a given business will adopt. If your people all love Perplexity, you don’t really want to start swimming upstream and pushing some other choice.

The civilian population is already reaching the point of confusion and fatigue because there are at least half a dozen major offerings in the market with more variations and versions coming every day. ChatGPT presently towers above the rest with more than 350 million monthly active users.

But Microsoft, Google, and DeepSeek are already reaching some reasonable levels of scale and it’s never smart to bet against fast followers when they are as deeply entrenched and well-funded as these guys are. Watching Microsoft Teams slowly eat Slack’s lunch is a good indicator of where these things often end up.

Microsoft’s decision to shut down Skype and put the functionality into the Teams package is another good indicator of the old tech rule that winners take all. Remember that Microsoft itself spent $8.5 billion in 2011 to buy Skype to replace its own mediocre video offering.

The AI Race Is Still Wide Open

No one is there yet in the AI race. The main riddle is to make the assistant contextually savvy, and surprisingly Amazon is a player in this race because of Alexa. With more than 600 million Alexa-enabled devices, the world is already comfortable asking Alexa for help. And with new tech, familiarity builds acceptance and comfort rather than contempt. It’s still a “go with what you know” world.

All the major players aspire and claim to be delivering the most accurate and comprehensive responses to carefully crafted prompts. In fact, the demand for prompt architects and prompt engineering  has exploded as it becomes clear that even the best answer is useless if you’re asking the wrong questions.

We’re also seeing a surge in new businesses aiming to deliver industry-specific AI tools like GPT-4o for Law and also startups that offer to help companies build their own small and custom models based on their own proprietary data.  The idea is to avoid the generic overkill and costs of the major LLMs. You don’t have to boil the ocean and burn big bucks every time you need some straightforward answers about your own business and customers.

One other interesting new startup, Avatar Buddy,  builds low-cost, task- and role-specific “buddies” for sales and support people, as well as experts and digital twins for educators, which provide real-time assistance and direction to folks in the field.

But all these conversations tend to return to the core issue, which is: How is a buyer supposed to evaluate and decide between these many alternative tools when even extensive, comparative tests are inconclusive or contradictory? There’s very little credible guidance so far; the players keep updating their solutions and moving the measurement goal posts.

Which means that for the foreseeable future, if you want to hold your nose and jump into the pool, you’re probably best advised to follow Yogi Berra’s classic advice: When you come to the fork in the road, take it.     

NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

Are You Still Wasting Your Ad Spend in Search? 

There’s too much junk generated at the top of searches—and AI isn’t helping. Focus first on developing your own organic content, for both the web and offline. 

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

FEB 4, 2025

I continue to be amazed by the number of smart entrepreneurs and new business owners, as well as plenty of people who’ve been in business for decades, who are so clueless about how they spend their advertising and marketing dollars. These are people who work their butts off, who think that they’re watching every penny of expense in their businesses, and who understand how critical every dollar saved and wisely spent can be to their continued survival in these very tough times.

But I swear they’d jump out of the nearest window if they understood even the most basic mechanics and economics of today’s ad tech world — and how badly they are being served by their own people, who are advising them on their ad spends. In a world where machines are increasingly doing the searching, and it’s becoming harder and harder to game the algos, paid search is simply not the way to go, even if it’s easy, quick and common. Instead, you’ve got to be creating, positioning and successfully exposing organic content if you want to be authentic and remain attractive to the latest algorithms.

Entrepreneurs May Be Their Own Worst Enemy

Part of the problem, of course, is that so many of these operators suffer from the classic entrepreneur’s disease. They think that they’re smart enough to direct and handle these matters and make the critical buying and placement decisions themselves. Another concern is that they’re lemmings in this area and perfectly happy to do what everyone else is doing and pray for the best. Truthfully, even if they really had the time to focus on this stuff and even if it was an efficient use of their own scarce time (as opposed to having it done by knowledgeable professionals), what they’re still missing is how dramatically and radically the game has been altered in the last few years. They think that they understand the situation; what they don’t understand is that the situation has changed.

Businesses that are still relying on sponsored results and other paid ads need to recognize that that boat sailed a while ago. Only a tiny percentage of searchers click through on any paid ad placements. Better than 90% of prospective buyers now click through on organic search results.

Consumers Have No Patience With Machine-Generated Responses

It’s important to know that the target audiences that businesses are trying to address aren’t standing still and that they’re more than a little cautious about AI-driven results. The demands, desires and requirements of today’s users are changing — and they’re becoming more particular and choosier in terms of what kind of results they’re looking for. Simply stated, they’re not interested in or engaging with machine-generated responses or summaries that are so high-level and generic that they basically fail to answer any searcher’s specific question.

As a result, most people – regardless of their degree of sophistication – have already learned to jump past the clutter, garbage, and verbiage at the top of the search pile and scroll down to the good stuff.  It doesn’t do any good to be shouting your messages and spending a ton of money on them if no one is engaging with them and if the few folks who stuck around aren’t really listening. The smartest anglers fish where the fish are most likely to be, not where they’ve always fished, not where the fish used to be, and not where there’s a crowd of other flustered fishermen.

Can Google Keep Its Advantage?

Google still owns more than 90% of the search market and basically runs the game. The new AI-first search engines like ChatGPT, Copilot and Perplexity are basically peanuts, while Google’s latest Gemini 2.0 release has taken major steps forward, especially in terms of accessing and delivering multi-modal results.

In the same way that Tesla will forever be advantaged by the data it has captured over the years from millions of drivers, Google will always have a Knowledge Graph edge in capturing and employing historical search results.  And the company now also has direct searchable access to YouTube’s vast world of content – written, audio, and video, even without transcripts. This allows for some amazing and speedy turnarounds, deep, rich results, and gives Google an even further competitive advantage and substantial differentiation. That’s good news for Google, but these continued tech advances make it even more challenging for business owners to keep track of and keep up with what choices are best for their businesses.

Because Google and the rest of the techies keep moving the goal posts, smart operators need to be careful not to jump too far ahead of their own target customers, whether Google likes it or not. Google’s latest offerings, AI Overviews, are AI-generated summaries that appear at the top of search results pages. I can tell you that the initial results from serious searchers who’ve been watched, measured, and surveyed is that these vague, vanilla summaries are just as easy to skip as all the rest of the sponsored material. They’re no more trusted or instructive than the paid stuff.

Google is trying to improve the outputs and the credibility of these pro forma packets by shifting its own internal processes to first interrogate authoritative material from established institutions and organizations in verticals like medicine and tech. But they need to improve their substantive value quickly, and also get the word out to the marketplace, or risk having millions more consumers reject this entire effort.    

The bottom line is that because the technology and the ground keep shifting around so quickly in the ad tech space, the best idea for most businesses is to take it slow. Be wary, because there will continue to be dozens of new vendors pitching you varieties of exciting stories and unproven approaches. Instead, invest in your own web and offline presence, and create your own valuable, informative and palatable organic content. Let the serious buyers beat a path to your door. It’s better to invest in making your business better than to spend money chasing someone else’s pipe dreams.