Small Businesses Adopting AI Expect to Thrive Against Competitors

Rhea-AI Summary

GoDaddy's new study reveals that 75% of entrepreneurs believe generative AI gives them a competitive edge, with a significant increase in GenAI usage for business purposes. Small business owners are increasingly adopting GenAI to enhance sales and compete with larger businesses.

Insights

Market Research Analyst

Entrepreneurs' rapid adoption of generative AI (GenAI) signifies a pivotal shift in the small business landscape. The reported increase in GenAI usage from 38% to 73% within a year suggests that these tools are becoming integral to small business operations. This widespread adoption could be a catalyst for innovation, driving efficiencies and potentially disrupting traditional business models.

For investors, this trend may indicate a burgeoning market for GenAI applications tailored to small businesses. Companies like GoDaddy that provide accessible GenAI solutions could benefit from first-mover advantage, capturing significant market share. This also points to a potential increase in demand for customer support and training services as more businesses onboard GenAI technology.

However, the high satisfaction rate (78%) among small business operators using GenAI should be viewed cautiously. Satisfaction does not always translate into increased profitability or market share and the long-term impact on small businesses' bottom lines remains to be seen.

Technology Adoption Expert

The data indicating that 75% of entrepreneurs believe GenAI provides a competitive edge reflects a shift towards technology-driven operational strategies in the small business sector. This perception could lead to increased investments in GenAI, with a focus on enhancing productivity and customer engagement.

From a strategic perspective, the fact that entrepreneurs are using GenAI not just for content creation but also to boost sales (44% in 2024) suggests a move towards deeper integration of AI in business processes. This could lead to a reevaluation of human resource needs and potentially reshape workforce dynamics, as GenAI may automate tasks previously performed by employees.

It's important to monitor how this affects the labor market and whether it leads to job displacement or the creation of new roles centered around AI management and oversight.

Small Business Strategist

The notable uptick in GenAI usage among small businesses could redefine competitive strategies within the sector. As small businesses begin to operate on a more level playing field with larger corporations, thanks to tools like GoDaddy Airo, we may witness a surge in entrepreneurship and a diversification of services offered by small entities.

Investors should be aware of the potential for small businesses to capture niche markets and offer personalized experiences that larger businesses might not be able to replicate as easily. This could lead to a more vibrant and competitive market, with small businesses carving out their own spaces.

However, the reliance on GenAI also raises questions about data security and privacy, especially for businesses that may not have robust IT infrastructures. As small businesses become more data-driven, the risk of data breaches could increase, potentially impacting customer trust and business viability.

New study from GoDaddy finds 75% of entrepreneurs believe generative AI gives them an edge

TEMPE, Ariz., March 26, 2024 /PRNewswire/ -- New research from GoDaddy (NYSE: GDDY) shows that entrepreneurs are quickly embracing generative AI (GenAI) and increasingly using the rapidly evolving technology to run and grow their small businesses. 

GoDaddy's January survey of over 500 U.S. small business owners found that they expect GenAI to give them a competitive edge over other small or similar-sized businesses (75%) and anticipate it will also allow them to better compete with larger businesses (68%).  

GenAI usage among entrepreneurs is on the rise, with 73% of survey respondents indicating they have tried the technology, and 26% of those using it for business purposes. This is a drastic increase from GoDaddy's inaugural survey of U.S. small businesses on GenAI*, published in May 2023, which revealed only 38% of respondents had used GenAI at that time. Of those, only 11% had tried applying GenAI to their business. 

In GoDaddy's 2024 survey, small business operators' satisfaction and consistency using GenAI for their business remained consistently high (78%) - the same as in 2023 (78%).  

Small businesses are also experimenting with how they're using GenAI tools. Outside of content creation or marketing, entrepreneurs are increasingly leveraging it to help boost sales for their business (44% in 2024 vs 22% in 2023).  

"We're at the beginning of the AI revolution and small businesses are already taking advantage of the technology, which is really unprecedented," said Amy Jennette, senior director of marketing at GoDaddy. "Small businesses usually lag big business in getting the most out of cutting-edge tech, but with easy-to-use GenAI and solutions like GoDaddy Airo, the playing field is finally leveling out." 

Much has been written about concerns around AI technology, however GoDaddy's survey found that apprehension is low among small business owners. Only 1 in 10 respondents believed GenAI could do their job better than them. Similarly, 89% said they are not worried about negative consequences associated with using AI technology for their business – a rise from May 2023 (83%).   

Looking ahead, entrepreneurs are feeling optimistic about the future, with 47% sharing enthusiasm about their business overall.  

"Small business owners expect to save more than $4,000 and 300 hours of work this year using generative AI," Jennette said. "The best part about this is we're at the tip of the iceberg when it comes to what's possible with GenAI." 

On Feb. 26, GoDaddy unveiled its AI-powered solution that makes leveraging the power of AI easy for anyone. In mere minutes, GoDaddy Airo™ can help entrepreneurs start a business or take their existing one to the next level, with no tech skills required, by automatically generating a logo, website, email, payment capabilities, social posts and more.  

To learn more about GoDaddy Airo™, visit www.godaddy.com/airo.

To explore the survey results, visit www.godaddy.com/ventureforward/spring-2024-generative-ai-survey-results. 

About GoDaddy 
GoDaddy helps millions of entrepreneurs globally start, grow and scale their businesses. People come to GoDaddy to name their idea, build a professional website, attract customers, sell their products and services and accept payments online and in-person. GoDaddy's easy-to-use tools help small business owners manage everything in one place and its expert guides are available to provide assistance 24/7. To learn more about the company, visit www.GoDaddy.com. 

*January 2024 (Total Surveyed: 504) and April 2023 (Total Surveyed: 1,003) 

Source: GoDaddy Inc. 

 

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SOURCE GoDaddy Inc.

FAQ

What percentage of entrepreneurs believe generative AI gives them a competitive edge?

75% of entrepreneurs believe generative AI gives them a competitive edge.

How many small business owners have tried using GenAI for business purposes?

26% of small business owners have tried using GenAI for business purposes.

What percentage of small business operators reported satisfaction and consistency using GenAI for their business?

78% of small business operators reported satisfaction and consistency using GenAI for their business.

How are entrepreneurs increasingly leveraging GenAI besides content creation or marketing?

Entrepreneurs are increasingly leveraging GenAI to help boost sales for their business.

Who mentioned that small businesses are already taking advantage of GenAI technology?

Amy Jennette, senior director of marketing at GoDaddy, mentioned that small businesses are already taking advantage of GenAI technology.