AI_Scout_Official•This week
I run an AI automation agency (AAA). My honest overview and review of this new business model
I started an AI tools directory in February, and then branched off that to start an AI automation agency (AAA) in June. So far I've come across a lot of unsustainable "ideas" to make money with AI, but at the same time a few diamonds in the rough that aren't fully tapped into yet- especially the AAA model. Thought I'd share this post to shine light into this new business model and share some ways you could potentially start your own agency, or at the very least know who you are dealing with and how to pick and choose when you (inevitably) get bombarded with cold emails from them down the line.
Foreword
Running an AAA does NOT involve using AI tools directly to generate and sell content directly. That ship has sailed, and unless you are happy with $5 from Fiverr every month or so, it is not a real business model. Cry me a river but generating generic art with AI and slapping it onto a T-shirt to sell on Etsy won't make you a dime.
At the same time, the AAA model will NOT require you to have a deep theoretical knowledge of AI, or any academic degree, as we are more so dealing with the practical applications of generative AI and how we can implement these into different workflows and tech-stacks, rather than building AI models from the ground up. Regardless of all that, common sense and a willingness to learn will help (a shit ton), as with anything.
Keep in mind - this WILL involve work and motivation as well. The mindset that AI somehow means everything can be done for you on autopilot is not the right way to approach things. The common theme of businesses I've seen who have successfully implemented AI into their operations is the willingess to work with AI in a way that augments their existing operations, rather than flat out replace a worker or team. And this is exactly the train of thought you need when working with AI as a business model.
However, as the field is relatively unsaturated and hype surrounding AI is still fresh for enterprises, right now is the prime time to start something new if generative AI interests you at all. With that being said, I'll be going over three of the most successful AI-adjacent businesses I've seen over this past year, in addition to some tips and resources to point you in the right direction.
so.. WTF is an AI Automation Agency?
The AI automation agency (or as some YouTubers have coined it, the AAA model) at its core involves creating custom AI solutions for businesses. I have over 1500 AI tools listed in my directory, however the feedback I've received from some enterprise users is that ready-made SaaS tools are too generic to meet their specific needs. Combine this with the fact virtually no smaller companies have the time or skills required to develop custom solutions right off the bat, and you have yourself real demand. I would say in practice, the AAA model is quite similar to Wordpress and even web dev agencies, with the major difference being all solutions you develop will incorporate key aspects of AI AND automation.
Which brings me to my second point- JUST AI IS NOT ENOUGH. Rather than reducing the amount of time required to complete certain tasks, I've seen many AI agencies make the mistake of recommending and (trying to) sell solutions that more likely than not increase the workload of their clients. For example, if you were to make an internal tool that has AI answer questions based on their knowledge base, but this knowledge base has to be updated manually, this is creating unnecessary work. As such I think one of the key components of building successful AI solutions is incorporating the new (Generative AI/LLMs) with the old (programmtic automation- think Zapier, APIs, etc.).
Finally, for this business model to be successful, ideally you should target a niche in which you have already worked and understand pain points and needs. Not only does this make it much easier to get calls booked with prospects, the solutions you build will have much greater value to your clients (meaning you get paid more). A mistake I've seen many AAA operators make (and I blame this on the "Get Rich Quick" YouTubers) is focusing too much on a specific productized service, rather than really understanding the needs of businesses. The former is much done via a SaaS model, but when going the agency route the only thing that makes sense is building custom solutions. This is why I always take a consultant-first approach. You can only build once you understand what they actually need and how certain solutions may impact their operations, workflows, and bottom-line.
Basics of How to Get Started
Pick a niche. As I mentioned previously, preferably one that you've worked in before. Niches I know of that are actively being bombarded with cold emails include real estate, e-commerce, auto-dealerships, lawyers, and medical offices. There is a reason for this, but I will tell you straight up this business model works well if you target any white-collar service business (internal tools approach) or high volume businesses (customer facing tools approach).
Setup your toolbox. If you wanted to start a pressure washing business, you would need a pressure-washer. This is no different. For those without programming knowledge, I've seen two common ways AAA get setup to build- one is having a network of on-call web developers, whether its personal contacts or simply going to Upwork or any talent sourcing agency. The second is having an arsenal of no-code tools. I'll get to this more in a second, but this works beecause at its core, when we are dealing with the practical applications of AI, the code is quite simple, simply put.
Start cold sales. Unless you have a network already, this is not a step you can skip. You've already picked a niche, so all you have to do is find the right message. Keep cold emails short, sweet, but enticing- and it will help a lot if you did step 1 correctly and intimately understand who your audience is. I'll be touching base later about how you can leverage AI yourself to help you with outreach and closing.
The beauty of gen AI and the AAA model
You don't need to be a seasoned web developer to make this business model work. The large majority of solutions that SME clients want is best done using an API for an LLM for the actual AI aspect. The value we create with the solutions we build comes with the conceptual framework and design that not only does what they need it to but integrates smoothly with their existing tech-stack and workflow. The actual implementation is quite straightforward once you understand the high level design and know which tools you are going to use.
To give you a sense, even if you plan to build out these apps yourself (say in Python) the large majority of the nitty gritty technical work has already been done for you, especially if you leverage Python libraries and packages that offer high level abstraction for LLM-related functions. For instance, calling GPT can be as little as a single line of code. (And there are no-code tools where these functions are simply an icon on a GUI). Aside from understanding the capabilities and limitations of these tools and frameworks, the only thing that matters is being able to put them in a way that makes sense for what you want to build. Which is why outsourcing and no-code tools both work in our case.
Okay... but how TF am I suppposed to actually build out these solutions?
Now the fun part. I highly recommend getting familiar with Langchain and LlamaIndex. Both are Python libraires that help a lot with the high-level LLM abstraction I mentioned previously. The two most important aspects include being able to integrate internal data sources/knowledge bases with LLMs, and have LLMs perform autonomous actions. The two most common methods respectively are RAG and output parsing.
RAG (retrieval augmented Generation)
If you've ever seen a tool that seemingly "trains" GPT on your own data, and wonder how it all works- well I have an answer from you. At a high level, the user query is first being fed to what's called a vector database to run vector search. Vector search basically lets you do semantic search where you are searching data based on meaning. The vector databases then retrieves the most relevant sections of text as it relates to the user query, and this text gets APPENDED to your GPT prompt to provide extra context to the AI. Further, with prompt engineering, you can limit GPT to only generate an answer if it can be found within this extra context, greatly limiting the chance of hallucination (this is where AI makes random shit up). Aside from vector databases, we can also implement RAG with other data sources and retrieval methods, for example SQL databses (via parsing the outputs of LLM's- more on this later).
Autonomous Agents via Output Parsing
A common need of clients has been having AI actually perform tasks, rather than simply spitting out text. For example, with autonomous agents, we can have an e-commerce chatbot do the work of a basic customer service rep (i.e. look into orders, refunds, shipping). At a high level, what's going on is that the response of the LLM is being used programmtically to determine which API to call. Keeping on with the e-commerce example, if I wanted a chatbot to check shipping status, I could have a LLM response within my app (not shown to the user) with a prompt that outputs a random hash or string, and programmatically I can determine which API call to make based on this hash/string. And using the same fundamental concept as with RAG, I can append the the API response to a final prompt that would spit out the answer for the user.
How No Code Tools Can Fit In (With some example solutions you can build)
With that being said, you don't necessarily need to do all of the above by coding yourself, with Python libraries or otherwise. However, I will say that having that high level overview will help IMMENSELY when it comes to using no-code tools to do the actual work for you. Regardless, here are a few common solutions you might build for clients as well as some no-code tools you can use to build them out.
Ex. Solution 1: AI Chatbots for SMEs (Small and Medium Enterprises)
This involves creating chatbots that handle user queries, lead gen, and so forth with AI, and will use the principles of RAG at heart. After getting the required data from your client (i.e. product catalogues, previous support tickets, FAQ, internal documentation), you upload this into your knowledge base and write a prompt that makes sense for your use case. One no-code tool that does this well is MyAskAI. The beauty of it especially for building external chatbots is the ability to quickly ingest entire websites into your knowledge base via a sitemap, and bulk uploading files. Essentially, they've covered the entire grunt work required to do this manually. Finally, you can create a inline or chat widget on your client's website with a few lines of HTML, or altneratively integrate it with a Slack/Teams chatbot (if you are going for an internal Q&A chatbot approach). Other tools you could use include Botpress and Voiceflow, however these are less for RAG and more for building out complete chatbot flows that may or may not incorporate LLMs. Both apps are essentially GUIs that eliminate the pain and tears and trying to implement complex flows manually, and both natively incoporate AI intents and a knowledge base feature.
Ex. Solution 2: Internal Apps
Similar to the first example, except we go beyond making just chatbots but tools such as report generation and really any sort of internal tool or automations that may incorporate LLM's. For instance, you can have a tool that automatically generates replies to inbound emails based on your client's knowledge base. Or an automation that does the same thing but for replies to Instagram comments. Another example could be a tool that generates a description and screeenshot based on a URL (useful for directory sites, made one for my own :P). Getting into more advanced implementations of LLMs, we can have tools that can generate entire drafts of reports (think 80+ pages), based not only on data from a knowledge base but also the writing style, format, and author voice of previous reports.
One good tool to create content generation panels for your clients would be MindStudio. You can train LLM's via prompt engineering in a structured way with your own data to essentially fine tune them for whatever text you need it to generate. Furthermore, it has a GUI where you can dictate the entire AI flow. You can also upload data sources via multiple formats, including PDF, CSV, and Docx.
For automations that require interactions between multiple apps, I recommend the OG zapier/make.com if you want a no-code solution. For instance, for the automatic email reply generator, I can have a trigger such that when an email is received, a custom AI reply is generated by MyAskAI, and finally a draft is created in my email client. Or, for an automation where I can create a social media posts on multiple platforms based on a RSS feed (news feed), I can implement this directly in Zapier with their native GPT action (see screenshot)
As for more complex LLM flows that may require multiple layers of LLMs, data sources, and APIs working together to generate a single response i.e. a long form 100 page report, I would recommend tools such as Stack AI or Flowise (open-source alternative) to build these solutions out. Essentially, you get most of the functions and features of Python packages such as Langchain and LlamaIndex in a GUI. See screenshot for an example of a flow
How the hell are you supposed to find clients?
With all that being said, none of this matters if you can't find anyone to sell to. You will have to do cold sales, one way or the other, especially if you are brand new to the game. And what better way to sell your AI services than with AI itself? If we want to integrate AI into the cold outreach process, first we must identify what it's good at doing, and that's obviously writing a bunch of text, in a short amount of time. Similar to the solutions that an AAA can build for its clients, we can take advantage of the same principles in our own sales processes.
How to do outreach
Once you've identified your niche and their pain points/opportunities for automation, you want to craft a compelling message in which you can send via cold email and cold calls to get prospects booked on demos/consultations. I won't get into too much detail in terms of exactly how to write emails or calling scripts, as there are millions of resources to help with this, but I will tell you a few key points you want to keep in mind when doing outreach for your AAA.
First, you want to keep in mind that many businesses are still hesitant about AI and may not understand what it really is or how it can benefit their operations. However, we can take advantage of how mass media has been reporting on AI this past year- at the very least people are AWARE that sooner or later they may have to implement AI into their businesses to stay competitive. We want to frame our message in a way that introduces generative AI as a technology that can have a direct, tangible, and positive impact on their business. Although it may be hard to quantify, I like to include estimates of man-hours saved or costs saved at least in my final proposals to prospects. Times are TOUGH right now, and money is expensive, so you need to have a compelling reason for businesses to get on board.
Once you've gotten your messaging down, you will want to create a list of prospects to contact. Tools you can use to find prospects include Apollo.io, reply.io, zoominfo (expensive af), and Linkedin Sales Navigator. What specific job titles, etc. to target will depend on your niche but for smaller companies this will tend to be the owner. For white collar niches, i.e. law, the professional that will be directly benefiting from the tool (i.e. partners) may be better to contact. And for larger organizations you may want to target business improvement and digital transformation leads/directors- these are the people directly in charge of projects like what you may be proposing.
Okay- so you have your message, and your list, and now all it comes down to is getting the good word out. I won't be going into the details of how to send these out, a quick Google search will give you hundreds of resources for cold outreach methods. However, personalization is key and beyond simple dynamic variables you want to make sure you can either personalize your email campaigns directly with AI (SmartWriter.ai is an example of a tool that can do this), or at the very least have the ability to import email messages programmatically. Alternatively, ask ChatGPT to make you a Python Script that can take in a list of emails, scrape info based on their linkedin URL or website, and all pass this onto a GPT prompt that specifies your messaging to generate an email. From there, send away.
How tf do I close?
Once you've got some prospects booked in on your meetings, you will need to close deals with them to turn them into clients.
Call #1: Consultation
Tying back to when I mentioned you want to take a consultant-first appraoch, you will want to listen closely to their goals and needs and understand their pain points. This would be the first call, and typically I would provide a high level overview of different solutions we could build to tacke these. It really helps to have a presentation available, so you can graphically demonstrate key points and key technologies. I like to use Plus AI for this, it's basically a Google Slides add-on that can generate slide decks for you. I copy and paste my default company messaging, add some key points for the presentation, and it comes out with pretty decent slides.
Call #2: Demo
The second call would involve a demo of one of these solutions, and typically I'll quickly prototype it with boilerplate code I already have, otherwise I'll cook something up in a no-code tool. If you have a niche where one type of solution is commonly demanded, it helps to have a general demo set up to be able to handle a larger volume of calls, so you aren't burning yourself out. I'll also elaborate on how the final product would look like in comparison to the demo.
Call #3 and Beyond:
Once the initial consultation and demo is complete, you will want to alleviate any remaining concerns from your prospects and work with them to reach a final work proposal. It's crucial you lay out exactly what you will be building (in writing) and ensure the prospect understands this. Furthermore, be clear and transparent with timelines and communication methods for the project. In terms of pricing, you want to take this from a value-based approach. The same solution may be worth a lot more to client A than client B. Furthermore, you can create "add-ons" such as monthly maintenance/upgrade packages, training sessions for employeees, and so forth, separate from the initial setup fee you would charge.
How you can incorporate AI into marketing your businesses
Beyond cold sales, I highly recommend creating a funnel to capture warm leads. For instance, I do this currently with my AI tools directory, which links directly to my AI agency and has consistent branding throughout. Warm leads are much more likely to close (and honestly, much nicer to deal with).
However, even without an AI-related website, at the very least you will want to create a presence on social media and the web in general. As with any agency, you will want basic a professional presence. A professional virtual address helps, in addition to a Google Business Profile (GBP) and TrustPilot. a GBP (especially for local SEO) and Trustpilot page also helps improve the looks of your search results immensely.
For GBP, I recommend using ProfilePro, which is a chrome extension you can use to automate SEO work for your GBP. Aside from SEO optimzied business descriptions based on your business, it can handle Q/A answers, responses, updates, and service descriptions based on local keywords.
Privacy and Legal Concerns of the AAA Model
Aside from typical concerns for agencies relating to service contracts, there are a few issues (especially when using no-code tools) that will need to be addressed to run a successful AAA. Most of these surround privacy concerns when working with proprietary data. In your terms with your client, you will want to clearly define hosting providers and any third party tools you will be using to build their solution, and a DPA with these third parties listed as subprocessors if necessary. In addition, you will want to implement best practices like redacting private information from data being used for building solutions. In terms of addressing concerns directly from clients, it helps if you host your solutions on their own servers (not possible with AI tools), and address the fact only ChatGPT queries in the web app, not OpenAI API calls, will be used to train OpenAI's models (as reported by mainstream media). The key here is to be open and transparent with your clients about ALL the tools you are using, where there data will be going, and make sure to get this all in writing.
have fun, and keep an open mind
Before I finish this post, I just want to reiterate the fact that this is NOT an easy way to make money. Running an AI agency will require hours and hours of dedication and work, and constantly rearranging your schedule to meet prospect and client needs. However, if you are looking for a new business to run, and have a knack for understanding business operations and are genuinely interested in the pracitcal applications of generative AI, then I say go for it. The time is ticking before AAA becomes the new dropshipping or SMMA, and I've a firm believer that those who set foot first and establish themselves in this field will come out top. And remember, while 100 thousand people may read this post, only 2 may actually take initiative and start.
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