The AI automation industry is red hot right now, with businesses rushing to implement AI and automation to improve efficiency and boost profits. AI adoption grew over 270% in the last 4 years alone. This has created a lucrative opportunity for "AI automation agencies" that promise to deliver turnkey AI solutions to clients. However, the reality is that many of these agencies are scams preying on eager but naive businesses, as revealed in a recent YouTube video by industry expert Joe Leek.
The Allure and Pitfalls of AI Automation Agencies
The appeal of AI automation agencies is obvious. They promote visions of advanced algorithms seamlessly running businesses on autopilot. A recent survey found that over half of executives believe AI will substantially transform their companies within 3 years. Agencies promise struggling businesses an easy way to tap into this transformative power without needing to hire scarce and expensive AI talent.
The True State of AI Automation
- Over 50% of companies say AI is very or critically important to their business strategies today
- However, only 4% have extensively incorporated AI across processes
- Top challenges include data issues (37%), talent shortage (34%), and understanding AI use cases (32%)
However, the promises made by many AI automation agencies greatly oversell current real-world AI capabilities. As Leek explains, most agencies rely on an unsustainable business model that takes advantage of their clients.
The typical model involves using ads to attract clients with tantalizing offers of "effortless" AI solutions. But developing truly customized AI is complex, time-consuming and expensive work. Most agencies lack the in-house expertise or data resources to deliver on their AI promises.
Common Shortcomings of AI Automation Agencies
- Insufficient data science and engineering talent
- Little model governance and oversight expertise
- Overpromise cutting-edge deep learning apps despite limitations
- Lack cloud infrastructure to manage complex model deployments
- Struggle with model monitoring, updates and drift prevention
Instead, they sell generic, off-the-shelf AI tools that provide little real value. They hook desperate small businesses with cheap initial offers then trap them in expensive long-term contracts. It‘s a classic bait-and-switch that leaves clients stuck with subpar solutions.
Why The Model Sets Up Beginners to Fail
For beginners hoping to break into the automation agency business, the traditional model spells almost certain doom according to Leek. Most new agencies struggle to attract clients in the first place. AI is still poorly understood by much of the public. Mass advertising rarely succeeds in clearly communicating the concrete benefits AI can provide for most businesses.
Percentage of Executives That Say They Understand AI Use Cases and Benefits
| Department | % Saying Yes |
|---|---|
| IT | 24% |
| Sales | 19% |
| Finance | 17% |
| Marketing | 15% |
But even if a fledgling agency does land a few clients, beginners lack the skills and resources to meet inflated expectations. Disappointed clients cancel their contracts, word spreads, and the agency goes under. Unrealistic expectations combined with lack of expertise is why over 80% of agencies fail in the first year according to studies.
As Leek notes, this model essentially sets beginners up to fail. It depends on medium-to-large advertising budgets and deep AI expertise — things no startup has.
A Sustainable Alternative: Start With Services Businesses Actually Need
Rather than chase the AI automation dream straight away, Leek advises new agencies to start with more realistic, beginner-friendly services. The key is to provide things regular small businesses already know they need — basic digital optimization, web hosting, CRMs and online marketing.
Real Business Needs AI Agencies Can Address Initially
- Website and shopping cart optimization
- Sales data tracking and analysis
- Email and social media marketing
- Basic CRM and database solutions
- Reporting automation and analytics
The beauty of this approach is it allows beginners to ride the growing wave of digital transformation even if clients aren‘t ready for advanced AI. Better yet, it establishes client relationships and generates crucial case studies.
Once a consulting practice matures, agencies can strategically introduce AI tools as a premium add-on. This allows them to cover heavy AI research and deployment costs while demonstrating additional value.
With clear success stories under their belt and client trust established, agencies can then upsell more involved AI automation contracts. Starting with realistic goals focused on client needs paves the way for advanced AI transformation down the road.
Sidestep The Hype: Focus on Proven Automation First
The most common mistake beginners make is buying into AI hype without grounding themselves in what‘s possible first. Cutting-edge deep learning makes for great headlines but often poor business plans.
The most effective approach for first-time automation agencies is to focus on proven, familiar technologies instead. As Leek explains, robotic process automation (RPA) has become a gateway drug to enterprise AI adoption for good reason.
The Power of Robotic Process Automation
- Streamlines repetitive digital tasks through scripted bots
- Relies on simple if-then logic – no advanced intelligence
- Delivers 20-30% efficiency gains consistently
- Fast payback period of 3-6 months in many cases
RPA simply mimics repetitive human tasks to free up employee time. The tech has been around for decades in some form and most businesses already rely on some basic automation.
The great thing about RPA is that it delivers huge efficiency gains without requiring advanced AI skills. Agencies can start automating mundane business processes almost immediately without big research investments. And because the tech is proven, it‘s an easier sell to skeptical clients reluctant to buy into AI hype.
As client needs evolve, agencies can then layer on more advanced machine learning and AI automation tools. But RPA delivers value quickly, establishes agency credibility and paves the way for more cutting-edge engagements down the road.
Selling AI The Right Way: Set Realistic Expectations
At the end of the day, successfully selling AI solutions comes down to setting realistic client expectations. AI automation agencies can absolutely help businesses unlock value — but only if they have the expertise and strategic roadmap to back up claims.
Rather than sell an AI dream they can‘t yet fulfill, new agencies should focus on proven tech that solves here-and-now problems. As lined out above, this means starting with basic process automation and digital services, then evolving into advanced AI as client needs and agency capabilities mature.
How To Ethically Sell AI Solutions
- Understand limitations of AI technology
- Audit data and infrastructure readiness
- Start with basic automation to build trust and credibility
- Co-build roadmaps focused on incremental value
- Be transparent about capabilities, limitations and risks
Transparency is key — overpromising but underdelivering erodes client trust in AI. By outlining realistic milestones and being clear upfront what AI can and cannot yet achieve, agencies set both themselves and their clients up for AI success over the long-haul.
It‘s not as sexy as promoting fully automated enterprises from day one via AI magic. But for building sustainable agency businesses that responsibly move customers towards AI adoption, it‘s the only model with long-term viability.