Generative AI is proving to be a powerful tool, not just for AI-focused startups, but for entrepreneurs across diverse industries. Take the case of Michael Ammirati, a professor at Carnegie Mellon University, who has spent over a decade helping his graduate students launch startups. While this year’s projects ranged from personalized health apps to dating platforms for long-distance couples, something unique stood out—unprecedented progress among his students.
Ammirati, having mentored students for 14 years, remarked, “I’ve never seen students advance as quickly as they did this year.” What was different? The influence of generative AI tools, such as ChatGPT and GitHub Copilot, integrated into their workflow from the outset. He urged his students to think of AI as their “co-founder.”
The result was extraordinary. Students used AI for everything from marketing and coding to product development and early client acquisition. By the semester’s end, venture capitalists were actively scouting for opportunities on Carnegie Mellon’s campus, sparking excitement that reminded Ammirati of the early cloud and mobile technology boom of the mid-2000s.
Generative AI’s role in startup productivity
Though many businesses are still figuring out how to fully utilize AI’s potential, some entrepreneurs are already experiencing its impact. Generative AI has allowed them to accomplish tasks faster, including writing complex code, understanding legal jargon, creating social media posts, and even answering payroll-related queries. The result? Faster business launches and more streamlined operations.
AI’s capacity for boosting productivity has broader implications for the global economy. Startups, vital engines of innovation and job creation, are leveraging this new technology to scale faster and innovate more effectively.
Take the example of Steven Bright, the founder of Skittenz, a company producing colorful mitten covers. Bright conceived the idea during a ski trip with his wife but had no experience in launching a business. Turning to ChatGPT, he found answers to both basic and complex questions—from dyeing techniques to interpreting patent documents.
Though Skittenz hasn’t achieved profitability yet, AI has given Bright the confidence to navigate the entrepreneurial landscape without needing to hire expensive consultants. For him, generative AI offered reassurance in a daunting venture.
AI’s growing impact on startup ecosystems
While data on AI’s direct impact on startup ecosystems remains scarce, early evidence suggests its influence is growing. Research from the National Bureau of Economic Research indicates that AI adoption is higher among startups, where its low-cost and “general-purpose” capabilities make it particularly attractive.
Gusto, a payroll and benefits platform for small businesses, found that nearly 25% of companies founded in the last year are using AI to streamline tasks like job postings, market research, and contract reviews. Liz Wilke, Gusto’s principal economist, sees generative AI as a game-changer, stating, “There’s every reason to believe that startups will scale faster and reach profitability sooner.”
Practical applications of AI in startup growth
Jamie Steven, a Washington-based entrepreneur, is already benefiting from these advantages. While developing an app to monitor internet quality, Steven used AI to understand fundamental business processes. Although AI sometimes provided confusing answers, it also empowered him to ask “stupid questions” without hesitation, something he couldn’t do with human experts.
Steven’s company, Orb.net, saw rapid development thanks to GitHub’s Copilot, which helped him secure $700,000 in funding. AI’s role in startup growth isn’t limited to tech-related businesses. E. Darren Liddell, founder of financial coaching startup My Money Story, used AI to automate user pairings, saving valuable time and resources.
Experts like Erik Noyes see generative AI as a “bootstrapping technology,” enabling startups to do more with fewer resources. AI, once thought of as a tool mainly for tech-driven companies, is now helping entrepreneurs across various industries, driving faster innovation and growth.
(Tashia Bernardus)