Micro business owners using AI to compete with big brands, industries

Micro business owners using AI to compete with big brands, industries

Over 3,000 micro business owners were surveyed by Venture Forward, GoDaddy’s international research initiative, in February 2024 about leveraging generative artificial intelligence (GenAI) to compete with large brands and level the playing field across a multitude of industries.

The findings concluded that 44% of micro businesses, companies with 10 or fewer employees, somewhat or wholly agree that AI capabilities will assist in business growth over the next year. Of those surveyed, 50% have admitted to trying AI over the past few months, but 40% of owners responded that they do not personally know of any other small businesses owners leveraging AI.

Venture Forward revealed that the top AI use cases cover content production, including writing and multimedia asset design, summarizing data points, marketing and operations strategies, and business insights.


home office

The data shows that Black-owned businesses are twice as likely as White-owned brands to use AI specifically for customer service. (iStock)

“Their greatest challenge when they start is marketing,” Alexandra Rosen, senior director at GoDaddy Venture Forward, told FOX Business during a video interview. “They’re using it for the things they previously hired people for.”

Though micro business owners are no longer in need of marketers to provide digital services, Rosen said despite the assumption that there are fewer jobs left because of GenAI, there is no evidence to show jobs are actually displaced.

“Micro business owners are creating jobs,” she said. “We know that for every micro business entrepreneur, about seven jobs are created. They’re hiring directly as they grow, they’re hiring indirectly, or they’re bringing that money back into the community. They’re creating more demand locally. The more of them there are, the more these jobs are created.”

Rosen also added that micro business owners are able to spend time focusing on their passions versus falling behind on business operations. Also, their ability to stretch time and allocate energy and money to strategies that will grow their businesses more rapidly is greater while making use of AI.


man looking at financials

More micro business owners are leveraging generative artificial intelligence to grow their businesses and compete with larger brands. (iStock / iStock)

Consumers avoiding paid advertisements through search engines and seeking retail offerings, consultations, etc. organically begs the question whether the same purchasers will have an issue with brands using AI to reach them.

However, Rosen has found there is honesty among business owners who are utilizing GenAI.

“Technology is a tool, and GenAI is a catalyst,” Rosen said. “We’re finding they’re not shy about sharing if they tried it or how they shared it.”

She added that micro business owners are open to embracing the latest technology, and anything else that saves them time and money. In addition to this, she said the output of GenAI is simply based on the input from business owners, still ensuring authenticity of a brand.

“It’s not always intuitive, and it might not even be for everybody,” Rosen said. “If the business is person to person and there’s no need for it, then there’s no need for it.”

Businesses in the hospitality, retail or consulting industries, including the stay-at-home moms who are kickstarting multiple side hustles and passion projects, and have seen an uptick in revenue over the past six months, are more likely to have used AI.


small business owner

Small business owners are not shy about making use of AI to grow, according to Alexandra Rosen, senior director at GoDaddy Venture Forward. (  / iStock)

Of those surveyed, 40% of the owners reported that their micro business was not their main source of income, and 66% reported hoping that it would become the primary source, according to Venture Forward data.

“It seems like it’s a lot more for supplemental income or for the flexibility that it enables,” Rosen said.

As for demographics of the surveyed group, 1 in 3 Black and Hispanic-owned micro businesses are using AI, according to Venture Forward data. Only 1 in 4 White and Asian-owned businesses surveyed said they are leveraging AI themselves.

Micro businesses that have adopted most of AI include younger and Black owners, and each are 50% more likely to have used the technology in their business practices within the last several months, according to Venture Forward.


The data also concludes that Black-owned businesses are twice as likely as White-owned brands to use AI specifically for customer service, while Asian and Hispanic micro business owners use it twice as much to drive sales.

“People who maybe were more affected during economic downturn, were displaced from the workforce, or just in general, people reflected on being their own boss, or always had a dream of opening their own business,” Rosen said. “We’re seeing that Black women are the fastest growing demographic.”

Some of the reasons micro businesses reported not using AI to grow their business included a lack of familiarity with AI, time, necessity and the cost of using it.

“There’s resistance,” Rosen said. “But I think it’s great the option is out there.”

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