Hard truths from building a startup in the AI boom

After spending four months in San Francisco as part of the South Park Commons community, I’ve learned a few things about building in the AI boom.

I recently walked away from my startup Hovi AI, which now focuses on AI agents for marketing, despite having a million-dollar funding commitment and runway to burn. On paper, everything looked good, but I knew it was time to call it quits.

There’s a fundamental truth that the AI boom has made clear: Spinning up products may be painless, but turning them into successful startups still demands hard truths, counterintuitive insights, and relentless focus.

Stumbling blocks

When the startup I was working for shut down in April 2024, I decided to start my own, exploring ideas in the global B2B SaaS space.

Our first idea was AI voice agents for consumer research. After two months, we realized it was India-specific rather than global and moved on. 

This led to our first “pivot hell” – we knew we wanted to help consumer marketing teams but didn’t know exactly how.

After three months of reaching out to marketers with no strong insight, we found a unique opportunity in playable ads for mobile gaming. These interactive ads perform well but are expensive and slow to build. 

We thought an AI agent that would create them in hours instead of weeks would unlock significantly more demand.

See also: A realist’s guide to deploying AI agents that work

To validate this, we “did things that don’t scale” and operated as an AI-accelerated service for three months. This meant we didn’t wait for the product to be ready to work with customers but built the ads ourselves, with AI agents helping behind the scenes.

This confirmed that AI agents could reduce the time needed for ad creation, and that there weren’t existing products that addressed this pain point. We raised our pre-seed from South Park Commons and flew to San Francisco for its bootcamp.

But after building the product and speaking to customers, we encountered market and technical challenges.

For a start, the mobile gaming sector was not in a growth phase but a consolidation phase. Along with that, we realized that faster ad creation wouldn’t expand the market because real costs were in media spend and testing time on ad networks like AppLovin.

Rules of thumb for founders in the AI era

Conviction over all