Me, My Customer, and AI The New Rules of Entrepeneurship (Henrik Werdelin, Nicholas Thorne) (Z-Library)

“Me, My Customer, and AI is a new, foundational text, an empowering and practical guide to find a need and fill it. It collects decades of proven insight and puts it into a modern context. Time to get to work.” –Seth Godin, author of This is Marketing “What’s most exciting about Me, My Customer, and AI isn’t just the smart AI frameworks—it’s the optimism. Me, My Customer, and AI shows how AI doesn’t replace the entrepreneurial spark; it supercharges it. For anyone wondering how to move faster, prototype smarter, and learn in public, this is a new playbook. It’s a powerful invitation to rethink what’s possible when technology and human insight cocreate.” –Reid Hoffman, cofounder of LinkedIn & ManasAI and partner at Greylock “If you’re not using AI to build deeper customer trust, you’re falling behind. Me, My Customer, and AI is THE playbook for staying relevant and winning in today’s business world.” –Kara Goldin, founder and former CEO of Hint Inc., author of WSJ bestseller Undaunted, and host of The Kara Goldin Show “AI is reshaping entrepreneurship, but your unfair advantage will always be deeply understanding your customers. Me, My Customer, and AI shows founders how to scale without losing the human connection that makes a business special. The cost of failure has never been lower; use these tools to build something remarkable.” –Harley Finkelstein, president of Shopify

“With Me, My Customer, and AI, Werdelin and Thorne brilliantly shift the entrepreneurial paradigm from static products and services to adaptive, ‘membrane-like’ ecosystems built on knowledge and trust. In an era where AI is not just transforming industries but redefining relationship capital as the ultimate competitive edge, this is the essential playbook for those who aim not to adapt but to lead the change ahead.” –Brice Challamel, head of AI Products & Innovation at Moderna “AI isn’t just a tool—it’s the incredible business partner. Me, My Customer, and AI shows how entrepreneurs can use AI to sharpen their instincts, test ideas faster, and stay closer to their customers. A must-read for founders who want to move at the speed of innovation.” –Jeffrey Raider, cofounder and coCEO of Harry’s and cofounder of Warby Parker “Entrepreneurship has long been a game of access—access to capital, networks, and expertise. Sadly, most people don’t have it. But now, AI is shifting that balance, and Me, My Customer, and AI is both a blueprint and a battle cry for founders who want to use AI to level the playing field, amplify their strengths, and turn customer relationships into their biggest advantage. If you’re building something new, start here.” –Brit Morin, entrepreneur and investor “Me, My Customer, and AI is a masterclass in unlocking innovation in an era of unprecedented technological change. Werdelin and Thorne don’t just talk about AI—they redefine how we should think about creativity, customer connection, and entrepreneurial agility in the algorithmic age. They

demonstrate convincingly that even in the age of AI, the best innovators aren’t those who automate the fastest, but those who listen, iterate, and build with human needs at the center. A must-read for anyone serious about scaling their creative impact in an AI-powered world.” –Jeremy Utley, Stanford adjunct professor, author of Ideaflow, Thinkers50 innovation leader, and top podcaster “The best entrepreneurs don’t just launch businesses; they harness technology while staying deeply human to turn insights into impact that create movements. Me, My Customer, and AI is a playbook for amplifying human connection. It challenges founders to think beyond the tech and focus on what really matters—building deep, defensible relationships with customers. If you’re building something from the ground up, this book is essential reading.” –Tony Conrad, entrepreneur and investor “AI isn’t just changing how we build startups—it’s redefining who can build them. Me, My Customer, and AI lays out a new playbook for founders to build AI-driven enterprises, showing how to leverage AI to accelerate venture creation, validate ideas faster, and scale with precision. For anyone serious about entrepreneurship in the AI era, this book is an invaluable guide.” –Paul Cheek, executive director at Martin Trust Center for MIT Entrepreneurship, senior lecturer at MIT Sloan School of Management, and author of Disciplined Entrepreneurship: Startup Tactics

“For years, I’ve helped companies crack the code on growth. What Me, My Customer, and AI makes clear is that the biggest unlock in the AI age isn’t just better tools; it’s better insight into human behavior. Werdelin and Thorne blend startup wisdom with cutting-edge AI applications to help founders navigate a world where launching is easy but standing out is harder than ever. This book isn’t just a roadmap—it’s an unfair advantage.” –Sean Ellis, early growth leader at Dropbox & Eventbrite and author of Hacking Growth “In Me, My Customer, and AI, Werdelin and Thorne nail exactly what today’s entrepreneurs need to hear: AI isn’t replacing human connection; it’s amplifying it. This book cuts through the noise and delivers actionable frameworks for leveraging technology while keeping customers at the core of your business. Every founder needs this blueprint for building relationship capital in the AI age.” –Scott Clary, entrepreneur and host of the Success Story podcast

Introduction “There’s this business idea I can’t stop thinking about…” Have you ever had an idea that kept you up at night? A solution to a problem you’d personally faced that you kept coming back to, thinking, Someone really should fix this! Maybe you dismissed it, telling yourself you didn’t have the time, the capital, or the connections to make it happen. Yet deep down, you knew the problem was real and should be addressed because you’d lived it. If so, you’re far from alone. A Harris Poll found that over 60 percent of people have had a business idea and believe they have the skills to pursue it. Historically, however, only 10 percent of them ever take the leap. That’s millions of potential solutions, untapped and waiting to be implemented. Why the reticence to act on these ideas? Because entrepreneurship has long been felt like it belonged to a small, manic tribe of over- caffeinated people who could afford sleepless nights, take big risks, and access the movers and shakers with the deepest pockets. But that’s changing—quickly. Artificial intelligence is rewriting the rules of starting and running a business. Need a logo, marketing copy, or first draft of code? AI can handle it in minutes. Need to engage with customers around the clock? AI tools can help you listen, learn, and respond at scale. Establishing a new business, once a slow and expensive uphill battle, now feels more like opening a

laptop. So, if you’ve ever asked yourself, “Could I start a business?” or “Is it possible to do this on my own?” the answer is increasingly yes. But here’s the paradox: While AI makes it easier to launch a new business, it also makes it harder to stand out from all the others. The same tools that lower barriers for you do the same for everyone else. The floodgates open, markets get noisier, and customers become harder to impress. To succeed today, you need something more than the right tech stack. That “something more” is you. In a world where anyone can produce most things cheaply and quickly, it’s your unique insights, personal experiences, and ability to connect authentically with customers that will set you apart and make you a successful entrepreneur. This democratization of entrepreneurship will require a new way of thinking about value creation, employment, and the symbiotic relationship you can have with AI and, in turn, with your customers. ENTREPRENEURSHIP DEFINED In The Creative Act: A Way of Being, Rick Rubin, the legendary music producer and founder of Def Jam Recordings, calls creativity “a fundamental aspect of being human.” It is, he insists (in something of a gut punch), “not a rare ability. It is not difficult to access. […] It’s our birthright. And it’s for all of us.” Creativity, by his definition, is the impulse “to bring something into existence that wasn’t there before.”1 Our definition of entrepreneurship makes one addition. It’s the impulse to bring something into existence that wasn’t there before in service of an actual or would-be customer. And we believe the world would be a more durable, fun, and interesting

one if a larger percentage of people acted on that impulse. An increase in entrepreneurial thinking means more people trying to solve problems in a scalable way as new founders or as a new kind of entrepreneurial employee. And more problem- solvers equals fewer problems in a world with no shortage of supply. So whether you’re part of the minority who harbors little to no entrepreneurial aspirations or one of the 60 percent who want to start something but haven’t yet joined the 10 percent who have, we wrote this book for you. Our aim is to share ideas, frameworks, and exercises you can use to start participating in the brave new AI world of work. ME, MY CUSTOMER, AND AI This book is not another get-rich-quick guide or a technical manual for AI implementation. Nor is it about resisting AI or competing with it. Instead, it’s about understanding a fundamental shift currently underway. Whether you’re an aspiring entrepreneur, a sole proprietor, or part of a Fortune 500 company, in the age of AI, the entrepreneurial mindset—the ability to spot opportunities, do more with less, and build meaningful connections—will become more than just an advantage; it will become a necessity. Me, My Customer, and AI is your guide to thriving in this new environment. It began as a collection of internal essays and white papers (which you can find in Appendix I) written as we worked to develop and articulate our philosophy—or, perhaps more accurately, our pedagogy—of entrepreneurship. We needed to establish a shared vocabulary for our school of thought and nail down a way of teaching it first to would-be

entrepreneurs and then to an AI. In publishing it, our goal has been to share a modern and effective approach to entrepreneurship and a blueprint for starting something new in the age of AI. Accordingly, it spans theory and practice. It includes big- picture topics, such as how businesses can build strategic advantages, as well as practical exercises that any would-be entrepreneur can use to think about what business to start. We hope it will encourage more people to join the first generation of AI-age entrepreneurs. Moreover, we hope it will help set them up for success from the very start—and that it will also challenge them to contribute to a future in which more people are solving a greater number of problems in scalable ways. Me, My Customer, and AI will help you do the following— Identify and cultivate a unique competitive advantage. Develop your entrepreneurial mindset. Find your entrepreneurial focus. Locate the source of your unique product-market fit. Determine which customers to serve and how best to serve them. Identify and qualify your customers’ problems. Develop and pitch winning solutions. Structure your new business for success. Preserve your relationship with customers as you scale. Use AI as a copilot that amplifies your ability to connect, create, and deliver lasting value. We’ve tested and refined this entrepreneurial pedagogy over the past decade and a half as cofounders of prehype, a venture R&D group that researches methods of entrepreneurship, builds new businesses, and operates a network for founders. It’s

helped launch BarkBox, AND.CO (acquired by Fiverr), Ro (Roman), Managed by Q, and others, as well as guided Fortune 500 companies such as News Corp, the Royal Bank of Scotland, and Mondelēz International through the evolving landscape of entrepreneurship and AI. WHO WE ARE Henrik is best known for cofounding BARK (BarkBox and BARK Air), for taking it public, and for authoring The Acorn Method, which applies startup lessons to big organizations. He’s immersed himself in the practical applications of AI and cohosts the Beyond the Prompt podcast with Stanford’s Jeremy Utley to explore how to use AI efficiently. Nicholas began his entrepreneurial journey after leaving Goldman Sachs, cofounded ventures at prehype (including early attempts at what would now be considered NFTs), and has since guided countless founders behind the scenes. He’s a cofounder of Audos, an AI copilot for entrepreneurs, and a trusted mentor recognized for his thoughtful, systems-minded approach to building companies in the AI era. From our first meeting, we’ve shared a fascination with and commitment to entrepreneurs and entrepreneurship, and we are excited by how we’ve seen AI supercharge them. The world needs more entrepreneurs—people who turn problems into solutions, who embrace technology without losing sight of who they’re helping and why. The opportunities are enormous. We hope you’ll be one of those entrepreneurs stepping forward to build not just a business but a business that truly matters.

BUT FIRST We know what you’re thinking. You’re wondering if this book about AI was written by AI. It wasn’t. But not for lack of trying. When I, Nicholas, first began working on Me, My Customer, and AI, I expected AI to be as much my coauthor as we’ll argue it will be a cofounder for entrepreneurs. Being a huge fan of setting up systems to handle repeatable tasks (a classically entrepreneurial trait, as we discuss in chapter 2), I was convinced that if I could just define the component parts of book writing precisely enough, I could outsource at least some of it to AI. I never thought it would spit out an entire book in an afternoon, but I expected it to be able to produce a solid first draft one paragraph at a time. I created a very detailed outline (with ChatGPT, naturally) and built a database. I assigned one paragraph-level subsection of outline per database row, thinking I could then prompt a GPT to go row by row, taking the previous paragraph and the next line item into account, and turn each successive outline element into solid prose. I thought I could avoid the tyranny of averages by being extremely specific and non-average about each writing task. In a way, I was following the investment case for all the complicated mortgage products that got the world into so much trouble in the mid-2000s. Those sophisticated financial instruments had been set up to scrape a thin layer of solvent mortgages off the big subprime bucket, only to discover it was subprime from skin to dregs. I was trying to collateralize GPT content, and it worked out about as well. I still think it should have worked. It’s the same basic approach we’ve used with AI elsewhere, and it’s been remarkably successful in those other contexts. We had enough

example content to inform its writing style and enough original ideas to say something new, but two and two consistently came back as 1.5. What wasn’t incoherent was generic. Each sentence worked, but the paragraph didn’t mean anything. Reading a few pages felt like eating McDonald’s for a week. It looked like food and tasted fine, but there was nothing to metabolize. And I had to keep hammering it on style. It did well at improving on a paragraph I’d written. It could preserve my “voice” and tweak for clarity or brevity, but even that degraded if I asked for a rewrite of its rewrite. It could organize and edit but not recognize that “organize and edit” was more satisfying than “structure and revise.” A writer friend told me Mark Twain once said that the difference between the right word and the almost right word is the difference between lightning and a lightning bug. For all its brilliance, at this moment in time and for this book specifically, AI delivers general illumination but can’t yet electrify or enchant. And with that out of the way, let’s get started!

CHAPTER 1 First Among Equals How the democratization of entrepreneurship makes building and maintaining close customer relationships easier and more important than ever before Entrepreneurship circa the late 1990s: Want to start a business? First step: buy a $5,000 Windows NT server. When I, Henrik, started building companies, a $5,000 server was just the beginning. You also needed engineers to configure it, designers to build your site, and a small fortune to spend on software licenses out of the gate. The barriers to entry weren’t just high—they often felt like impenetrable walls. Today, you can swipe a credit card on Amazon or Squarespace and have a professional-looking website up and running within seconds. You don’t need to buy a server; you can rent space on a virtual one on a pay-as-you-go basis. You don’t need to hire engineers or designers either. AI enables everyone to start new ventures quickly and inexpensively, regardless of their resources. THE DEMOCRATIZATION OF ENTREPRENEURSHIP Entrepreneurship has long been—or at least thought to have been—reserved for obsessively driven people willing to work themselves to death in pursuit of their business dreams. In our

experience, many would-be founders are put off by the pervasive image of a toxic “hustle culture” of people working ninety-hour weeks. Additionally, the traditional entrepreneurial journey followed a predictable pattern: Raise capital, build infrastructure, hire expertise, and then launch. This resource- heavy approach naturally favored those with access to capital or technical skills. Success often depended more on initial resources than on understanding customer needs. Today’s AI-enabled entrepreneur follows a different path. As an example, designer Diarra Bousso uses AI to collapse timelines from months to minutes in the fashion industry, where cycles are notoriously slow. By using generative tools to visualize designs, her team skips the costly manual trial-and- error phase, enabling them to test hundreds of designs and focus on the best. This “test before building” approach lets Bousso compete against larger players by being faster, leaner, and more daring. AI-powered platforms now handle operations that once required entire departments. Virtual teams are replacing full- time hires, and pay-as-you-go models have mostly eliminated large upfront investments in building out teams. No-code platforms enable complex development without technical expertise, and AI writing tools create professional content that once required experienced copywriters. All this massive technological change has enabled a new, less risky approach to entrepreneurship: starting small and scaling gradually. Instead of betting everything on a grand launch, entrepreneurs can test ideas with minimal investment and gather real customer feedback quickly. They can then iterate based on actual usage and feedback and grow organically

through word-of-mouth systems rather than through costly advertising campaigns. LOUD AND CROWDED This democratization means more people can pursue their entrepreneurial dreams, leading to more innovation and problem-solving in the world. But it also means the competitive landscape is changing dramatically. Traditional advantages are eroding as AI commoditizes technical expertise and innovation and makes them accessible to everyone. In business, when creation gets easier, at least two other things happen. First, the market gets noisier. Getting a customer’s attention becomes more difficult because there’s more for them to consider. Second, the state of play changes more quickly. Cycles get shorter. The need to stand out means that the things we create—whether by hand or by prompt— must break with the status quo and more rapidly introduce newness and change. When the macro environment becomes extremely noisy and fast-moving, successful organizations often succeed by going very small and very focused, creating particle-like units of intense connection with consumers. It’s almost as if the chaotic environment itself creates the conditions that make these tight bonds necessary and possible. This effect can be seen in the way small, independent bookstores have succeeded—not despite Amazon’s dominance but because of it—by providing a curated, personal experience that stands in stark contrast to the overwhelming noise of millions of online options. Similarly, the democratization of brewing technology has created an explosion of craft breweries. A very noisy market led

to the emergence of microbreweries with fierce local followings. These breweries often collaborate rather than compete with each other, creating strong regional networks and communities. Their small scale allows them to maintain close relationships with regular customers who become brand ambassadors. Building these close human relationships starts with choosing the right customers. The strongest relationships form when entrepreneurs serve communities they deeply understand or belong to themselves. This authentic connection creates a natural alignment between business goals and customer needs and creates a new kind of capital. RELATIONSHIP CAPITAL If you take the time to look up capital in a dictionary (Merriam- Webster, for example) and work your way past “seat of government” and “punishable by death” to the part that’s relevant to this conversation, you will find words like “accumulated” and “stock.” More importantly, you’ll see “advantage.” Every business seeks an advantage—a way of getting and staying ahead. Whether it’s through innovative products, cutting-edge technology, or smart market positioning, securing a strong advantage is crucial because advantages tend to build on themselves. To us, advantage in business is best conceptualized as momentum. What, if anything, propels a business forward? The primary answer is its advantage. And the accumulation of this advantage over time is capital. Starbucks has well-located stores, McKinsey has brilliant teams, and Disney has characters

people love. These advantages are forms of capital—physical, human, and intellectual. Businesses that cultivate their relationships with customers over time gain an advantage that increases their momentum and odds of success. We call that advantage “relationship capital” and believe it may be the only form of capital that AI won’t democratize to the point of obsolescence. You probably won’t find “relationship capital” in the dictionary just yet, but it’s a very real concept already being assigned monetary value by companies like Microsoft. Deep in its 2018 annual report, you can even see how the company accounted for it during its $7.5 billion acquisition of GitHub. While the idiosyncrasies of purchase price accounting fall well beyond our bailiwick, what’s relevant here is a line item in the accountants’ allocation titled “Customer-related.”2 It captures the portion of the purchase price that Microsoft attributed not to GitHub’s technology but to the customer relationships it had developed prior to acquisition—its relationship capital. Relationship capital: The advantage a company accumulates by forming relationships with customers. RELATIONSHIP CAPITAL REQUIRES RELATIONSHIPS Although all businesses have customers, not all of them have customer relationships. To make this distinction clear, we need to understand the difference between transactions and relationships. In both, an exchange takes place. In transactions, that exchange is one-way; in relationships, there’s reciprocity.

Consider your Internet service provider as a counterexample. You pay them every month. You use their product many times each day. But we’d be skeptical if you said that what you have with them is a relationship. Even if you did, we’d bet it’s a lousy one because the business advantage an ISP holds has nothing to do with relationships. As Jan Duffy wrote in her piece Measuring Customer Capital: The word “relationship” implies that an exchange is occurring. Customers are the engines of growth. Establishing lifetime relationships with customers is the focus of the smart twenty-first-century organization. Customer capital is the value—the contribution to current and future revenues—that results from an organization’s relationships with its customers. It is the product of the customer relationship. Measuring customer capital is fundamental to assessing how successful an organization is and will continue to be in turning customer relationships into sustainable competitive advantage.3 To create momentum and competitive advantage, customer relationships need to pass one (or both) of two tests: an intimacy test and a status test. THE INTIMACY TEST Intimacy is about understanding. It’s about how well you understand your customers and how well they understand you and each other. Test Questions

1. Can we anticipate their needs? Since more work has been done on the characteristics of healthy spousal relationships than on customer relationships, we would be remiss not to look to the former for lessons we might apply to the latter. “Anticipating needs” is something you’ll find in both sets of literature. Healthy spousal relationship theory offers a valuable perspective on how romantic partners learn to anticipate each other’s needs. Matthew McKay, PhD, wrote in Couple Skills, You have a right to ask for the things you need in your relationship. In fact, you have a responsibility to yourself and to your partner to be clear about your needs. You are the expert on yourself. No one else, not even your partner, can read your mind and know what you need in the way of support, intimate contact, time alone, domestic order, independence, sex, love, financial security, and so on.4 Anticipating needs isn’t about mind reading. It’s about empathy, communication, and finding ways to help your customers open up. It means consistently seeking to deepen your relationship by demonstrating genuine care and attention to detail. You need to create personalized experiences that show customers they are valued and understood. This might look like using AI for leveraging customer data to predict future desires or engaging in regular feedback loops (such as post-purchase surveys, focus groups, or customer loyalty programs that incentivize customer comments) to better understand their evolving preferences. At BARK, we run predictive models on our dog toys to help forecast how likely it is that a certain breed in a specific area