Should I build AI software or sell AI-powered services?

On a day when my own products were frustrating me, I said it out loud: software is just not the answer, at least not right now. Marketing is perfect, because you're still using the tech.

"figure out the aspects of AI that you can do that are not as complex as software, like marketing. Get really good at that on the cutting edge and then use that as a service instead of selling a product."

Why do services win for now?

• Less complexity. AI-driven marketing still uses the technology, without the bug fixing and support load of a product.
• Demand rises with the number of companies. If there are going to be 50 times as many companies, the skill of getting them attention is going to be 50 times more valuable.

That doesn't mean swinging to the other extreme. Quitting AI to go buy a plumbing company isn't the answer either.

What's hard about building software?

Building your own software means constant bug fixing for the clients who already pay you, and that crowds out selling. I've lived it. More in why founders get stuck fixing bugs instead of selling.

A small market makes it worse. I shut down my earlier insurance software after putting a lot of money and effort into it. We started it pre-AI, aimed at a small market, which made sense at the time. Everything that made sense then makes the opposite of sense now.

When does building make sense?

• The problem is narrow and you know it from the inside. See niche versions of old software.
• It's easy to build, or the market is bigger than a sliver.

Vibe coding is real, but I'd guess about 90% of business owners would rather pay $99 for a working tool than build one and keep fixing it. That's a market, if you can reach it.

Can I do both?

Yes. Sell the capability as a managed service first, then productize it once the interface is solid. That's how I approached my form system: I wanted to sell it as software eventually, but preferred a managed service in the short term because the UI might still have issues. I also put off self-serve checkout for a media kit builder because it wasn't worth prioritizing yet.

For most people, consulting or implementation is the highest-probability way to make money from AI right now. Start there, and see why that consulting should be niche.