I’m trying something a bit different today and coauthoring a piece with another leader in AI, Christian Ulstrup, who runs https://gsdat.work, an AI agency that does 2-8 week projects with guaranteed outcomes.
We’re collaborating on identifying businesses with huge AI potential that we can work with and invest in. If this piece resonates with you fill out our assessment or just reply to this email. If you have an AI project you want to get implemented quickly and efficiently, reach out to Christian through his website.
Everyone assumes the businesses best positioned for AI are the ones with the fanciest tech stacks who spend the most on AI tools or the newest companies that are native to the technology.
They're wrong.
After spending the last year studying which small businesses actually benefit from AI (not in theory, but in practice through my work in training owners and Christian’s in implementing actual AI results) a clear pattern has emerged. And it has almost nothing to do with technology.
The businesses with the highest AI transformation potential are the ones with the deepest human knowledge.
Think about that for a second. The twenty-year master electrician who can diagnose a problem by the sound a panel makes. The third-generation manufacturer whose team knows which suppliers can actually deliver. The specialty contractor whose estimator has a decade of pricing judgment that no spreadsheet captures.
That knowledge (the stuff that lives in people's heads, that takes years to develop, that you'd never find in a manual) is exactly what AI is built to amplify.
The "second generation" advantage
Here's where it gets interesting. The businesses we see with the most potential tend to be multi-generational family operations where a younger leader is taking the reins. This isn't a coincidence.
You get someone who grew up in the business — who absorbed the tacit knowledge through osmosis — combined with the comfort level and appetite for change that comes with being a digital native. That combination is a goldmine. They understand the domain deeply enough to know what matters, and they're willing to rethink how it gets done.
The founder built the knowledge. The successor can unlock it with AI.
What most people get wrong
The typical advice is to "get your data house in order" before thinking about AI. Start with systems. Invest in infrastructure. Build dashboards.
That's backward.
The most valuable thing you can do isn't installing software. It's figuring out what your business knows that nobody else knows. What's the hard-won knowledge that makes you different? Where are the "N of 1" people — those irreplaceable experts whose judgment drives your results?
Once you identify that knowledge, AI becomes a multiplier. It can help capture it, systematize it, and scale it in ways that were impossible five years ago. But if you're a commodity business competing on price with no unique expertise? AI isn't going to save you. It'll just make you a slightly more efficient commodity.
The question worth asking
Here's what I'd challenge every SMB owner to ask: What do we know that nobody else knows?
If you have a strong answer to that, you might be sitting on more AI potential than you realize — regardless of whether you're running Claude Code or a spreadsheet.
If you want to find out where you actually stand, we built a free five-minute assessment that scores your business across the three dimensions that matter: structural fit, knowledge depth, and data readiness. It could be the most transformative thing you ever do.