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A new MIT study reveals a sobering truth: 95% of corporate AI pilots are failing - potentially wasting billions in AI investment. Only a rare 5% are said to be succeeding with rapid sales growth.
What separates the winners from the rest? From this research, here are five key lessons for entrepreneurs who want to thrive in the AI era.
Here's the surprise: the study also indicates that among the most promising AI ventures are a few that are led by very young founders, sometimes just 19 or 20-year-olds, who are focusing on the right uses for AI.
If you look at history, many of our billion-dollar founders were in their late teens or early 20s when they started their iconic companies, including Steve Jobs, Bill Gates, Michael Dell, and Mark Zuckerberg. You do not need to be in your 30s or 40s to start a unicorn if you have the right skills on an emerging trend.
Aditya Challapally, the study's lead author, notes that the successful startups "pick one pain point, execute well, and partner smartly with companies who use their tools," Until they dominated their initial market, this is exactly what most billion-dollar entrepreneurs did.
Most AI wins are in back-office productivity. The most successful ventures help companies cut costs and boost productivity where ROI is clear. AI that reduces staffing needs or speeds up internal processes delivers immediate value that's easy to prove and scale.
By contrast, AI for sales growth is harder: it requires users to prove value to their customers, adding complexity, cost, and time. The lesson for startups: focus narrowly, solve one pain point exceptionally well, and deliver results fast.
Entrepreneur-led ventures may have an edge because they are focused on the customer, focused on low-hanging fruit, and work flexibly to make customers happier (https://www.forbes.com/sites/dileeprao/2016/02/10/how-successful-entrepreneurs-take-advantage-of-successful-innovators/). The study notes that many employees at corporate buyers are still using ChatGPT because the expensive new AI tools aren't delivering benefits. That's a sobering insight.
This limited success story with the emerging technology, and difficultIUy in finding the right business application should also be a warning shot for entrepreneurs. Avoid early-VC until you have found the right solution because VCs may not let you pivot. Follow the 94% of billion-dollar entrepreneurs who avoided VC or delayed it, and succeeded by keeping control to pivot and adjust (https://www.forbes.com/sites/dileeprao/2025/06/17/why-94-of-billion-dollar-founders-rejected-these-vc-commandments/).
And avoid VC or delay it to keep more of the wealth you create. In my study of 22 billion-dollar founders, I found that those who delayed VC funding kept twice as much wealth as those who took early capital and were replaced as CEO. Founders who avoided VC altogether kept seven times more wealth. (For more on this, see my book, The Truth About VC). Get business and leadership skills to build your venture - and stay in control.
The 2 classic types of technology advancement are evolutionary and revolutionary (https://www.forbes.com/sites/dileeprao/2023/05/25/the-1-reason-ai-poses-a-tougher-challenge-for-vcs-and-entrepreneurs/). Traditionally, Unicorn-Entrepreneurs have succeeded by riding revolutionary technologies, which are advances so disruptive they make old business models obsolete. PCs disrupted mainframes. Online retail disrupted in-store retail. (https://www.forbes.com/sites/dileeprao/2024/07/18/7-dangerous-business-words-how-revolutionary-trends-impact-you/). Unicorn-Entrepreneurs used this edge from these revolutionary technologies.
AI seems to be a hybrid technology, which means neither purely evolutionary nor fully revolutionary, and is creating unique challenges:
For corporations, this ambiguity is a major barrier. They're wired to scale proven models, not test new ones. Entrepreneurs, however, should thrive in uncertainty. By focusing on testable applications, and scaling what works, startups can succeed where corporations stumble.
MY TAKE: My assumption was that corporations could excel at using new technologies that did not disrupt their core business models. This study challenges that assumption. If corporations are failing at AI even when it fits their existing business models, the implications are huge:
For entrepreneurs, AI is not about chasing hype. Young founders may have an edge if they are focused, close to the customer, and willing to adapt. In a world where 95% of AI projects are failing, that mindset may be the biggest advantage of all. The winners may not be the ones with the most capital, but the ones who are skilled and strategic in an emerging industry - like the billion-dollar entrepreneurs of the past.