This week, I met several aspiring entrepreneurs who’ve built software to solve niche problems they encounter daily. None of them knows how to write software code. All used AI to build their web apps in a matter of days. They all have normal day jobs and aren’t in the tech industry. My takeaways:

• The people who understand a problem deeply and have a vision for how the solution should work will build superior products.
• Distribution will be key for these individuals. Making potential customers aware that the product exists needs to be thought through.
• There will likely be a lot more competition. If anyone can build anything with AI, we’ll see more ideas, and good ideas get copied quickly.
• These people building solutions with AI don’t all want to be full-time entrepreneurs. They enjoy building things that solve problems they care about, but they don’t want the stress of being a full-time entrepreneur. These types of projects could be a good source of income to supplement their salary.
• Some of them will need a small amount of capital to grow these businesses; I’m thinking $50k–$100k. A gap in the market for providing capital to the best of these types of projects, as well as an opportunity for a new investment product, probably exist. But the returns will likely come from cash flows, not from selling the business.

AI is moving fast and democratizing the ability to create a product and a business in a way that will benefit people with an entrepreneurial spirit.

I was listening to a podcast today. An entrepreneur shared a quote that got me thinking:

Pessimists sound smart, but optimists get rich.

I’m not sure who said this originally, but I think it’s a great quote for entrepreneurs and investors to keep in mind. A disposition that considers the worst things that could happen or the potentially negative outcomes is valuable because it keeps the What could go wrong? and What risk am I taking on? questions top of mind. Managing downside risk is critical to surviving long enough to get lucky as an entrepreneur or investor, and you can’t survive if you’ve taken on more risk than you realize.

But being mostly pessimistic severely limits you, because you constantly think that things won’t turn out well. Surprise, surprise, when you think like that, things don’t turn out well. It’s a self-fulfilling prophecy.

The most successful entrepreneurs and investors I know are neither wholly optimistic nor wholly pessimistic: they’re about 80/20. They’re optimists 80% of the time, but 20% of the time they’re thinking about the downside to make sure they’re not going to do something that takes them out of the game permanently.

I thought about my post from yesterday a bit more. As an entrepreneur’s company grows, the demands on the entrepreneur grow. The brute-force style of work that was helpful when they were doing lots of execution doesn’t work as well as the business grows in complexity, the team grows, and, most importantly, the entrepreneur’s role evolves. The brute-force approach to work becomes insufficient, and the entrepreneur’s productivity declines as the scope and volume of their responsibilities grow.

I think entrepreneurs feel this more than others, given the nature of their work, but it happens to people working for a company they don’t own or lead too. The trigger isn’t the title, it’s the accelerated growth in a role’s complexity, number of reports, and scope and depth of responsibilities. Said differently, the more things and people you’re responsible for and the faster both increase, the faster you’re likely to fall short of expectations of your role if you’re using a brute-force work style. The faster a company grows and/or the faster you climb the ladder, the faster a brute-force work style will fail you.

I’ve chatted with three entrepreneurs in the last two weeks who shared their problems with what I’ll broadly bucket as productivity. How they initially described them varied, and they manifested in various ways. But they’re clearly impacting their business and personal lives negatively. As we peeled back the layers, we uncovered the likely root cause: their approach to work. How they work used to be sufficient, but as their companies and responsibilities have grown, it hasn’t kept up. Said differently, they’ve outgrown their working style.

These aren’t slackers by any means. They’re successful and have been entrepreneurs for several years. But these conversations highlighted for me that most people are never taught how to work. They’re taught skills for particular jobs, but no one sits them down and shows them how to execute by applying those skills day to day.

The more I think about this, the more I suspect that this issue afflicts a large swath of entrepreneurs and likely causes an operating inflection point. How they work stops being good enough for leading a growth company. So, one of two things likely happens: growth stalls (or worse, a decline begins) or the entrepreneur adapts by implementing a new approach to work that allows them to continue working efficiently as the demands on them as a leader grow and evolve. Often, the inflection point leads to their adapting a work style that’s less brute force and more sustainable in the long term.

I wonder what the trigger is for the inflection point? Is it revenue, number of employees, number of customers, or something else? Or a combination of things?

I listened to an interview this week in which an entrepreneur who recently sold his advertising agency shared an interesting insight. He thinks that a new wave is being ushered in for software companies and agencies. His premise is that B2B software is a tool that a customer buys in hopes of achieving an outcome. True value is created by the company that’s willing to be accountable for an outcome. Software doesn’t make that happen; it’s up to the customer to figure out how to use the software tool to get the outcome.

This entrepreneur believes that companies don’t want to pay for tools. They want to pay for results. Right now, the result is detached from their spending. More companies are wising up and saying they want to pay for the result, not the tool. They don’t care how it’s done; they just want the result.

He goes on to explain that when you buy software, you often must hire an employee to use the software to create the result you want. And the other way around: If you hire an employee, you must buy the software that empowers them to get the result you want. He believes that the future is software-enabled agencies. The agency hires the person and buys the software, which work together to get companies the result they want at a lower price than they could achieve on their own and with a higher level of execution because they do this all day across a broader base of companies. The software-enabled agency allows the company to pay for results at a lower cost than if they did it internally.

Now this is where it gets interesting. He goes on to make the case that some software companies will become agencies. These companies will do the work for their clients and focus on delivering results. They’ll use the software they’ve built (and that they’re super users of) to achieve results for their clients in a scalable and efficient manner. The rationale is that some companies don’t know how to use the software tool, so they’re not getting the desired result, which leads them to cancel the software subscription. If these software companies start selling services focused on outcomes, they can retain and attract more customers because their customers are paying for results, not tools.

This is a fascinating take on things that I’m thinking about more. I’m going to chat about this with my friends who are software entrepreneurs.

The interview discusses this concept in much more detail and touches on lots of other great stuff. Anyone interested in this section of the interview can listen or watch here.

In the past week, I’ve had two instances where someone has told me about a new technology or strategy that’s become huge and is gaining lots of traction. In both instances, I realized that they were things I’d learned about a year or two before. At the time, I got the gist of the strategy or technology, but didn’t understand it deeply or why it was different. I also had no idea that they could grow to become as large and important as they are today.

This got me thinking that I need to do a better job of spotting things that have large upside potential. I know it’s not possible to catch everything that will become big that crosses my desk, but I think there’s definitely room for me to improve in this area. I do a good job of finding new stuff because I like to research and learn, but I think I need to do better at understanding the current landscape and why these new things are potentially disruptive and game-changing given the current landscape.

I know several Atlanta entrepreneurs who made fortunes selling marketing technology companies. Think email marketing workflow, automation, etc. They nailed the timing because two major trends were happening at the same time. Software as a service (SaaS) was gaining traction thanks to cloud computing pioneer Amazon Web Services. And after the global financial crisis when companies were looking for inexpensive ways to market to customers, email was a perfect option.

The more I talk with people on the marketing front lines, the more I see that marketing is undergoing a huge shift again. I’ve been introduced to several factors, and  I’m trying to get up to speed on them. But even with my current shallow understanding, I can tell that the combination of these factors is upending how companies market to customers. It seems that a convergence of factors is creating white space. There isn’t any technology that helps marketers create, execute, and measure the latest marketing strategies. It’s all very manual, piecemeal, and painful.

Marketing is a requirement for all businesses because customers have to know about you. That means the shifting marketing landscape must be causing pain for a ton of people. Translation: a huge market opportunity.

I suspect we’ll see a new crop of marketing technology–focused entrepreneurs capitalize on the changing landscape. They’ll come up with new solutions that create, execute, and measure efforts in this new marketing landscape, and they’ll build massive companies in the process.

I’ve been looking into the current marketing landscape for selling physical products. From what I learned through my own research, things have changed considerably since I was selling physical products online. How companies reach customers has evolved materially.

After I felt like I had a high-level understanding of what’s changed, I reached out to an old friend who runs a marketing agency. He’s on the front lines every day buying ads on behalf of his clients. The conversation was great. He was able to give me a front-line perspective about what’s working and not working and share what he’s hearing from his peers who run agencies. It was also cool to hear his thoughtful approach to building his agency and structuring his team in a way that differentiates his services and better aligns his agency with his clients.

What I learned in a single call would have taken me tons of time to learn on my own (if I ever could have). Today was a reminder that when I’m trying to get up to speed on something fast, nothing beats talking with an entrepreneur who operates in the space. I just need to come to the meeting prepared so they don’t think I’m wasting their time.

An early-stage entrepreneur recently shared that being present with their friends and family can be a challenge because they’re thinking about work. This is something I’ve heard many times from many entrepreneurs. I had the same issue. When I wasn’t at work, I was thinking about all the things I needed to do and running through everything in my mind to make sure nothing had fallen through the cracks.

I found a simple hack to help me with this. I kept a list of all the “projects” I was working on in the notes app on my phone. Under each project, I listed all the “next-action items” I could take to move it forward. The important thing is that they were clear, tangible actions I could execute without putting tons of thought into how to complete them. On Sunday or Saturday, I’d go through that list and update the next-action items for every project.

One benefit of this approach was that it gave me the time to think about everything I was working on. Even though it was a ton of stuff, it made me feel like I was on top of everything, which made me feel like I was in the driver’s seat. Second, it gave me a hit list of actions I’d take when I got into work mode. This helped eliminate time wasted on context switching or trying to figure out what I should do next, maximizing what I could get done during work hours.

An eye-opening thing I’ve been thinking about recently is hit rate. In the context of investing, your hit rate is how often an investing idea or decision is correct. The concept isn’t new to me, but a book I read recently, Stock Market Maestros, contains a surprising stat. Using years of historical buy-and-sell data and a top-notch analytics platform, the authors established that the best stock market investors, who have gigantic returns, are right only about 50% of the time.

This got me thinking about my entrepreneurial decision-making hit rate. When I was running my company, I never measured my hit rate. But if someone had asked, I confidently would have proclaimed it was probably 70% to 80%. Reading this book humbled me, and I know that statement would be false. I’m pretty sure it was more like 40% to 49%. Maybe 50% at best. What I now realize is that as an entrepreneur, I was wrong a lot, and that’s normal, even for the most successful people.

I now think about decisions I make as having a higher probability of being wrong than I realize. That change has made me more open to alternative decisions and their higher probability of being right than I might naturally think. I also spend time thinking about the payoff ratio, also known as magnitude. What’s the magnitude of the consequences of a decision, right or wrong?

I think that hearing about this 50% hit rate is making me more flexible mentally, which I hope improves my decision-making.