Mark Shaver/theispot.com
Can generative AI effectively advise business owners and entrepreneurs? With intuitive, chat-based interfaces, GenAI tools are accessible for tasks ranging from marketing to strategy even for those without technical expertise. This accessibility holds promise for entrepreneurs and small business owners seeking an on-demand adviser. Improving entrepreneur performance broadly has been difficult, as personalized mentoring and consulting, though effective, are costly and hard to scale — especially in emerging markets where business support is limited and expensive. A low-cost AI mentor could potentially deliver scalable, quality guidance.
A field study involving 640 small business owners in Kenya tested this by giving half access to a GPT-4-powered adviser via WhatsApp. Results showed that AI access led to a 15% revenue and profit boost for top performers but caused nearly a 10% decline for lower performers. Both groups received similar advice; the difference lay in the users’ judgment to select applicable insights. High performers tailored AI suggestions to their specific business context, while low performers often followed generic advice that hurt margins.
The study highlights that generative AI amplifies human judgment when tackling complex problems. AI’s value depends on users’ ability to filter and apply suggestions effectively, underscoring the risk of widening performance gaps if weaker users adopt AI uncritically. Leaders should cultivate awareness of varying effects, design AI tools with contextual understanding, and provide training and safeguards. Careful implementation and monitoring can help scale AI’s benefits without increasing inequality among business owners.
