The Uncomfortable Profit in Deploying AI Before the Rules Exist

Hey Everyone - I just got back from SXSW week here in Austin and my brain is full. I talked to probably 50 entrepreneurs, went to a handful of events, and came away both inspired and a little unsettled. The energy around AI right now is incredible, but some of what I saw raised questions I cannot stop thinking about.

This week is a big one. Let me walk you through it.

This week:

Let's dive in.

I went to an Open Claw AI event during SXSW this week. If you are not familiar, Open Claw is the tool that lets AI control your entire computer. People were using it for some truly wild use cases. But one in particular stuck with me.

A guy had built a legitimate business setting up Open Claw for customers. One of his clients was a dental office. He had this AI agent navigating their systems, handling workflows, touching patient data. The demo was impressive. The business model was real. He was making money.

And it terrified me.

A dental office means HIPAA. It means protected health information. It means regulatory exposure that can result in massive fines and lawsuits. Giving an AI agent that is essentially screen-scraping your computer access to that kind of data is, to put it gently, a legal minefield. And this was not some rogue experiment. This was a paying client relationship. A business built on deploying this tool into environments where the data sensitivity is extremely high.

My first instinct was to think this person was being reckless. That the smart move would be to pump the brakes, wait for the compliance frameworks to catch up, and deploy this technology in environments where the downside is lower.

But then I thought about it more. And I am honestly not sure I am right.

Here is the uncomfortable reality. The "move fast and break things" approach has been the most profitable strategy in tech for the last decade. The people who deployed first, who took the risk before the rules were clear, have overwhelmingly been rewarded more than they have been punished. The early movers in social media, in crypto, in the creator economy, they did not wait for permission. They figured it out as they went. And most of them came out ahead.

The people at that event are positioning themselves perfectly if Open Claw and tools like it continue to evolve. They are building expertise, client relationships, and operational knowledge that will be extremely valuable as this technology matures. By the time the cautious people show up, these early movers will already own the market.

And the risk calculus is strange if you think about it honestly. It is not exactly their data that is being exposed. It is the dental office's patients' data. The entrepreneur setting up the system bears some liability, but the worst consequences fall on the client and the people whose information gets leaked. The innovator captures the upside. The downside is distributed to everyone else. That is not a comfortable observation, but it is an accurate one.

So who am I to tell them to be careful?

I genuinely do not know the right answer here. I can see both sides clearly and they both feel true at the same time. Being early is an enormous advantage. Being reckless with other people's sensitive data is genuinely wrong. Those two things coexist in the same decision and the people I met this week are living in that tension every day.

What I do think is worth paying attention to is the pattern. AI is creating situations where the incentive to move fast is very strong and the guardrails are not there yet. This is not unique to Open Claw. It is happening across every industry where AI is being deployed into workflows that touch sensitive information, financial data, medical records, legal documents, personal communications. The technology is outpacing the rules, and the people who are willing to operate in that gap are the ones capturing the most value right now.

Whether that is admirable or irresponsible depends on where you sit. If you are the entrepreneur, it feels like vision. If you are the patient whose dental records are being processed by an AI agent you never consented to, it feels like a violation.

I left that event thinking two things simultaneously. First, these people are probably going to do very well financially. Second, someone is going to get hurt along the way. Both of those things can be true. And the fact that both are true is the signal worth paying attention to.

The question is not whether to innovate. It is whether you can live with the specific risks your innovation creates for other people. That is a question I think every builder in the AI space needs to sit with honestly. Because the market will not ask it for you.

I have been back on my local newsletter grind and I am excited to share that we have secured a few sponsors for Austin Founders Feed and will hopefully be profitable this month.

I really love the local newsletter business. There are so many ways to create value for the audience and so many ways to monetize. We can get sponsors. We can sell products like guides. We can run affiliate partnerships. We can host events. We can build a paid community. Each one of these is a viable revenue stream on its own, and they all reinforce each other. A sponsor wants to reach the audience. The audience wants the guide. The guide builds credibility that attracts more sponsors. The events create content and relationships that feed back into the newsletter. It is a flywheel that gets easier to turn the longer you keep at it.

But what is not on that list is honestly the most valuable part, and it is the hardest to quantify.

Being a staple in your local community changes your entire trajectory. I cannot put a dollar figure on what Austin Founders Feed has done for me beyond the direct revenue. The introductions I have gotten. The partnerships that started with "I read your newsletter." The invitations to rooms I would not have been in otherwise. The deals and opportunities that showed up not because I went looking for them but because enough people in Austin associate my name with this community.

I think this invisible surface area is worth more than all the other monetization channels put together.

This is what I mean when I talk about building a pipeline. The newsletter is not just a media product. It is a reason to talk to thousands of people. It is a reason for people to talk about me when I am not in the room. Every issue I send is a touchpoint with my community that keeps me top of mind for opportunities I cannot predict. Some of those turn into sponsor revenue. Some turn into partnerships. Some turn into things I never would have thought to pursue on my own. That is what serendipity actually looks like in practice. It is not random luck. It is surface area multiplied by consistency over time.

If you have been thinking about starting something local, I cannot recommend it enough. The revenue will come. But the pipeline it builds into the rest of your life is the real asset.

I talked to probably 50 entrepreneurs this week at SXSW. It was one of the most humbling experiences I have had in a while. I met a 22 year old making more money in a single year than I have made in my entire career combined. I met YouTube and LinkedIn creators in a similar position. People building businesses I never would have thought of, in ways I never would have considered.

My first reaction was honestly a mix of admiration and frustration. But the more conversations I had, the more I noticed a pattern. Almost every single one of these people had a period where nothing was working. Where the effort they were putting in looked completely disproportionate to the results they were getting. Where a reasonable person would have quit and tried something else.

They did not quit. And then something changed.

This is the shape of almost every successful venture I have seen up close. It is not a straight line. It is flat, flat, flat, then steep. The early months or even years feel like you are pushing against a wall. The audience is not growing. The revenue is not there. The product is not clicking. Every day you are doing the work and the scoreboard is not moving. Most people stop here. Not because they are lazy or untalented, but because the gap between effort and result feels irrational. It feels like evidence that the thing is not going to work.

But that flat period is not wasted time. It is where you are building the foundation that the exponential growth eventually sits on. You are developing skills. You are making connections. You are learning what your audience actually wants through trial and error. You are building a body of work that compounds in ways that are invisible until suddenly they are not.

The skill here is not grinding mindlessly. It is knowing what the curve looks like so you can recognize where you are on it. If you understand that the flat part is normal, that virtually everyone who eventually breaks through went through the same stretch of nothing, it changes how you interpret the silence. It stops being a signal to quit and starts being a stage to push through.

There is a difference between something not working and something not working yet. Learning to tell the two apart is one of the most valuable instincts you can develop. The honest answer is that you often cannot tell in the moment. But there are clues. Are you getting better at what you do even if the numbers are not moving. Are you getting positive signals from the small audience you do have. Are the people who engage with your work engaged deeply, even if there are not many of them. If the answer to those questions is yes, you are probably still in the flat part of the curve. Keep going.

The entrepreneurs I met this week did not have access to some secret playbook. They found something they were willing to keep doing through the wall. That is the whole skill. Find something worth pushing through the dip for, and then actually push through it.