Micro Business Owners Embrace AI to Compete with Large Corporations

In a recent 2024 survey by Venture Forward, GoDaddy's research initiative, more than 3,000 owners of micro businesses—that is, businesses with less than or equal to 10 employees—shared their experiences with using generative artificial intelligence (GenAI) to push back against the dominance of larger brands across various industries.

The Emergence of AI in Micro Businesses

According to the survey, 44% of these small-scale entrepreneurs believe that AI technology will play a substantial role in growing their business within the next year. Half of the participants have experimented with AI in recent months, illustrating a growing trend among small ventures to adopt this breakthrough technology. However, there remains a lack of widespread knowledge about this trend, as 40% of micro business owners are unaware of peers using AI.

Diverse Applications of AI Technology

GenAI has found utility in content creation, data analysis, marketing, operational strategies, and deriving business insights among micro enterprises. Specifically, content generation and multimedia assets design were identified as primary uses. There is also a significant racial demographic skew in AI application: Black-owned businesses are reportedly twice as likely to employ AI in customer service relative to their White counterparts, while Hispanic and Asian entrepreneurs are more inclined to use AI for boosting sales.

The Impact of AI on Job Creation and Business Operation

Alexandra Rosen, Senior Director at GoDaddy Venture Forward, reported that rather than eliminating jobs, micro businesses using AI have been creating employment opportunities. These businesses contribute to about seven new jobs each, benefitting local economies directly and indirectly. Furthermore, business owners using AI can devote more time to their passions while effectively managing and growing their businesses.

The Authenticity in AI Usage

Rosen highlights that despite fears AI may dilute brand authenticity, most business owners using GenAI maintain transparency about their usage. AI tools are thus seen as catalysts for growth rather than replacements for human creativity, as they depend on the input provided by the business owners themselves.

Barriers to AI adoption among micro businesses include unfamiliarity with the technology, time constraints, perceived lack of necessity, and cost factors. Nevertheless, Rosen sensed a gradual shift as more owners recognize the potential benefits of AI. The adoption rates of AI technology are most significant among younger owners and Black entrepreneurs, signaling a change in business practices influenced by socio-economic factors as well as generational perspectives.

microbusiness, AI, growth