How Small Businesses Are Using AI to Survive Rising Costs

Sam Vardis (0:00)

Welcome back to Market on Clothes. I'm Sam Vardis on the floor of the New York Stock Exchange to discuss how AI is reshaping small businesses. Let's welcome in our next guest, Dave Gilbert, founder and CEO of FairSquare. Dave, good afternoon to you. Thank you so much for your time. We speak about AI a lot, and how big companies are using it, how individuals are using it. How are small businesses fairing right now?

Dave Gilbert (0:23)

Small business is fairing as a whole pretty tough. With use of AI, they're using it for basic services, and obviously they enjoy the benefits of AI. In the real business world, the difference between Wall Street and Main Street is that the average small business owner is under a lot of pressure.

Anywhere from wage inflation to all their costs going up. So they're using AI all over the place, but remember our small business owners are primarily tied to the US economy and then confidence within that. So you're talking about special trade contractors, truckers, restaurant owners, medical offices. So we kind of financed the gamut of that, and from a technology perspective, the bigger you are, the more likely you have a lot more AI in your business, the smaller you are, the less, but they're using that like bread and butter in order to deal with solutions to make it easier.

Sam Vardis (1:25)

All right. I was going to say, so how exactly are small businesses then leveraging the technology in order to, I guess, navigate some of those challenges that they're dealing with?

Dave Gilbert (1:36)

They're using it for all sorts of places, marketing, targeting, using it for budgeting.

Being a lot more thoughtful. I think every small business owner, pretty much in the country, probably 90% of them are under some type of financial pressure. They're trying to use any tool that they have to either make life easier or reduce costs. A lot of our customers are still working day to day as most small businesses are. They're using it both in their business and their personal, really to reduce tasks, but also to increase their marketing and awareness and try to get more predictability in a market that's a little bit unpredictable right now.

Sam Vardis (2:20)

Oh, for sure. And what about the cost for small businesses? Because obviously, you hear of some of these companies that have blown through their entire A budget for the year in like four months. I think, what was it? Uber, if I'm correct. That was the one that famously came out, I think it was in April and said that. I mean, how are small businesses dealing with that?

Dave Gilbert (2:43)

Small businesses, I remember they're different than the big giants. So they're working hard to manage their costs. They're investing in AI, but more on a fraction of what the bigger companies are. And so a lot of people try to justify ROI and AI spend, and there's not a match there at all levels. But especially on the smaller side, I think they're using the tools that they can afford that best accommodate their needs to hit their services. But you're not seeing the same size of investments as like an Uber or any of the big giants compared to a small company where they're dealing with more wage inflation, just the cost going up everywhere. And how do they use those tools to mitigate and learn? So there's a lot of cost savings that they're learning through by uploading all their expense files into their systems and just kind of studying where waste is. And so they're doing the best they can to keep moving forward.

Sam Vardis (3:39)

Right, okay. And what does it meant then for jobs as well? I mean, you know, given small to medium size enterprises are, you know, big employers and workers.

Dave Gilbert (3:52)

They're massive and you still see the jobs numbers. I mean, there's still plenty of job openings out there. I think people are still struggling for quality people, people they can afford and how will they make a direct impact into their business? And there's a big displacement between new college grads wanting to work and tenured people wanting to work either more or less. So you have this whole employment dichotomy that is, it's different than years past. And I think each company is working on their own to decide who that labor force should be and making those decisions.

Sam Vardis (4:27)

And then how is it making it easier for, you know, for instance, the banks, the financials, the financial companies to partner and work with these smaller businesses if they're able to use these tools to make it more efficient and easy to actually access, you know, some of the history that they rely on as part of their partnerships.