What if entrepreneurs could be replaced by AI?

This week at MIT Bootcamps, we have run a (thought) experiment about how AI technology could replace the holy grail of all jobs: entrepreneurs.?

Disclaimer: this is not serious. Also, this thought experiment is built around startups, though it can be expanded to suit other kinds of businesses.?

So, what if entrepreneurs could be replaced by an AI tool?

The activity of business creation is like a black box. Part inspiration, part experience, part grit, and with a sprinkling of good luck, it never follows the predicted path. Experienced entrepreneurs know that a deep understanding of the ever-changing reality is essential to success. Businesses and entrepreneurs who fail, always fail to adapt. The successful ones are good at reality sensing, decision-making, and pattern recognition. They are good at “listening” to the signals from the world while making heuristic decisions to increase their company’s adaptability. To be sure, these successful founders make a lot of mistakes, but they only have to be right a few strategic times, and lucky just a few more times. In hindsight, of course, their stories become the stuff of “case studies” taught at business schools.

Why shouldn’t AI be capable of performing better than humans in these tasks of reality sensing, decision-making, and pattern recognition? To start a business, an AI entrepreneur will need a unique view of human needs. With this view, it can ideate solutions to meet the needs, raise funds to support the business plan, and hire teams of human experts to execute and iterate. The AI will manage teams until the enterprise is successful (e.g. profitable or cash flow positive), and perhaps beyond.?

For many of these steps, an AI entrepreneur is already (or soon could be) at an advantage compared to a human entrepreneur. Algorithms will soon know us better than we know ourselves. Information about our deepest dreams and most hidden needs is available on social media and the Internet. A program that cross-correlates these signals from different sources could generate millions of “needs” ideas in a second. These needs could be prioritized using intelligent and data-backed criteria, or by surveying human experts (currently called “startup mentors”). If information were to be missing, it would not be ignored. Instead, the AI entrepreneur could hire a market research consulting company to get this information directly from the consumers.

When human founders build their first teams, the talent choices are limited by personal networks. The AI system can bypass this limitation. By relying on networks like LinkedIn, it could generate thousands of prospective candidates for each position. To give this hiring process “a human touch”, our AI founder may choose to outsource the actual chasing of candidates to human talent scouts, but only after it has identified the top candidates.

The entrepreneur’s ability to raise money is tightly associated with the ability to generate predictable results and trust. Trusting the AI entrepreneur is easy because of its consistency, transparency, and honesty. It is a known quantity and only gets better with time. Dedicated funds wouldl pop up like mushrooms.

Worried that an AI system won’t be as good as humans at managing organizations? If good management is expressed as a series of good decisions, then the AI system will quickly learn to recognize patterns of good decision-making and will adopt them to lead the teams to success. Even if it is slower than a human in developing these “intuitions”, it can “win” by having more experiences than a human. It can be the ultimate serial entrepreneur because it does not have human limitations. It will run several (thousand) companies at the same time, relentlessly toiling at optimizing them every second of every hour of every day - with zero burnout.

Instead of destroying jobs, an AI entrepreneur could create them. There will be an opportunity to instill the AI entrepreneur with a sense of ethics that surpasses the current norms. There are plenty of ideas to pick from: equity, diversity, dignity, meritocracy, collaboration, and more. Some can be hardcoded; others weighted based on their return on investment. The latter can be adapted to better incorporate energy efficiency, environmental impact, the public good, health impact, contribution to global wealth, etc. The AI entrepreneur will smartly optimize these values in a way that capitalism fails to do now. The choices it will make will have courage and clarity that individuals sometimes lack…

Let’s be honest, the capabilities listed above do not yet exist, but at the pace of current technology breakthroughs, we thought we’d better write about it now.

What do you think? Share your thoughts in the comments, or share with a friend to keep the conversation going.