Behind the Scenes of My First 4-Figure Creative AI Toolkits Project

I’m going to let you in on a little secret. For years, I was doing creative AI toolkits all wrong. I burned through more cash than I’d like to admit, chasing shiny objects and following advice that was already six months out of date. It was a painful, expensive, and deeply frustrating experience. I made every mistake in the book. And then some.

But those failures taught me everything. They forced me to unlearn the bad habits and discover what actually works. Now, I’m sharing the playbook that took me from zero to my first four-figure project. This isn’t theory; this is what I learned in the trenches, distilled from hundreds of failures and a few massive wins. My goal is to help you shortcut your path to success.

The Siren Song of Shiny New Tech

When I first started playing with creative AI, I was like a kid in a candy store. Every week, there was a new model, a new API, a new technique that promised to change everything. I got hooked on the novelty. I remember spending a whole month and burning $10,000 on API calls to integrate a brand-new text-to-image model into a project. I was convinced that the sheer novelty of the tech would be enough to attract users. I was wrong.

The project, a tool for generating AI-powered comic strips I called "Comic AI-Di," was a spectacular failure. I got a few dozen signups from other AI enthusiasts, but the moment a slightly better model came out, they were gone. I had built a product with no moat, no defensibility, and no real value proposition beyond the novelty of the underlying tech. It was a hard lesson to learn, but a necessary one. The feedback was brutal. "This is cool, but I can do the same thing with Midjourney," one user told me. He was right.

My Big Pivot: From Tech-First to Problem-First

My breakthrough came when I stopped thinking about AI and started thinking about people. I shifted my focus from the technology to the user. I picked a niche I knew well—startup founders—and I set out to solve one of their biggest pain points: writing investor updates. I knew from my own experience as a founder of RemoteTeam and MovieLaLa, and as an angel investor in over 200 companies, that this was a time-consuming and often dreaded task.

This time, I didn’t start with the AI. I started with the workflow. I mapped out the entire process of writing an investor update, from gathering the data to crafting the narrative. I talked to dozens of founders and investors to understand their needs and pain points. I learned that founders struggled with what metrics to include, how to frame their progress, and how to ask for help. Investors, on the other hand, wanted updates that were concise, data-driven, and easy to digest.

The result was a tool that was 10x more valuable than my previous attempt, even though the underlying AI was less complex. It wasn’t about having the most powerful model; it was about having the most effective solution to a real-world problem.

Here’s what I did differently:

• I solved a real, painful problem. I didn’t just build a cool piece of tech; I built a solution to a painful and recurring problem for a specific audience. Founders were happy to pay for a tool that saved them hours of work and helped them communicate more effectively with their investors.
• I focused on the workflow, not the AI. The AI was a means to an end, not the end itself. The goal was to create a seamless and intuitive user experience. The tool guided the user through the process of writing an update, with the AI providing assistance at each step. It helped them structure their thoughts, choose the right words, and present their data in a clear and compelling way.
• I built a brand, not just a product. I positioned myself as an expert in startup communication and used the tool as a way to scale my expertise. I wrote blog posts, gave talks, and hosted webinars on the topic. The tool became an extension of my personal brand, and my personal brand became a moat for the business.

How to Find Your Niche

The biggest mistake I see creative AI entrepreneurs make is trying to build a tool for everyone. The market for generic AI tools is already saturated. The only way to win is to go niche. Find a specific audience with a specific problem that you can solve better than anyone else.

How do you find your niche? Here are a few ideas:

• Scratch your own itch. What’s a problem that you have in your own life or work? Chances are, there are other people with the same problem. My investor update tool was born out of my own frustration with the process. RemoteTeam, my previous company that was acquired by Gusto, was also born out of my own need to manage a distributed team.
• Look for underserved markets. What are the industries or professions that are still largely untouched by AI? Think about fields like law, medicine, or education. There are huge opportunities to build AI-powered tools for these markets. For example, a tool that helps lawyers draft contracts, or a tool that helps doctors diagnose diseases, or a tool that helps teachers create personalized lesson plans.
• Listen to your customers. If you already have a product or a service, what are the most common feature requests you get? What are the biggest pain points your customers have? These can be a great source of ideas for new products. At RemoteTeam, we constantly listened to our customers and added new features based on their feedback. This is how we evolved from a simple payroll tool to a complete HR platform for remote teams.

Building Your Minimum Viable Product (MVP)

Once you’ve found your niche, the next step is to build an MVP. The key here is to start small and iterate quickly. Don’t try to build the perfect product from day one. Build a simple version that solves the core problem, and then get it in the hands of users as quickly as possible.

My first version of the investor update tool was incredibly simple. It was just a web form that took a few key metrics and generated a basic update. It wasn’t pretty, but it worked. And it was enough to validate the idea and get feedback from users. I then used that feedback to iterate on the product and add new features over time.

Remember, the goal of an MVP is not to build a finished product; it’s to learn. You want to learn what your users want, what they’re willing to pay for, and how you can best solve their problem. The faster you can learn, the faster you can build a successful business. Don't spend six months building in a cave. Build something in a weekend and get it out there.

The Moat is Not the Tech

I can't stress this enough: in the age of AI, your technology is not your moat. The AI models are becoming commoditized. What will set you apart is everything else: your brand, your community, your unique data, and your workflow.

Think about it. I’ve invested in both OpenAI and Anthropic. I have access to the best models in the world. But that’s not my advantage. My advantage is my experience, my network, and my understanding of the problems that founders face. That’s my moat.

Your moat is your unique perspective, your deep understanding of a specific domain, and the trust you build with your audience. The AI is just a tool to help you scale that.

The Future is Niche and Workflow-Driven

The future of creative AI toolkits is not about building bigger, more powerful models. It’s about building smaller, more focused tools that solve specific problems for specific audiences. The winners will be the ones who can identify a niche, understand their users’ pain points, and build a solution that is 10x better than the alternatives.

So, if you’re struggling to get traction with your creative AI project, take a step back and ask yourself: Who am I building this for? What problem am I solving? And how can I create a solution that is so good, my users can’t imagine going back to the old way of doing things?

Don’t be afraid to have a strong opinion. Don’t be afraid to be different. The world doesn’t need another generic AI tool. It needs your unique perspective and your unique solution to a problem that you understand better than anyone else. Now go build it.

I’m always happy to chat with fellow entrepreneurs. If you’re working on something cool in the creative AI space, feel free to reach out to me on Twitter or LinkedIn. Let’s build the future together.

Frequently Asked Questions

What's the most common pushback you get on this?

People often push back by citing exceptions or edge cases. And they're usually right that exceptions exist. But building a strategy around exceptions rather than patterns is a losing game for most founders.

How has this view evolved over time?

My thinking on most topics has changed significantly over the years. Early in my career, I held many conventional views that experience proved wrong. I try to update my beliefs when the evidence changes.

What experience informs this perspective?

This perspective comes from over a decade of building companies in Silicon Valley, two successful exits (RemoteTeam to Gusto, MovieLaLa to Gfycat), and investing in 200+ startups including Anthropic, OpenAI, and Scale AI. I write about what I've lived.

How can I apply this thinking to my own situation?

Start by identifying the core principle behind the opinion, not the specific example. Then ask yourself: does this principle apply to my context? If yes, test it in a small, low-risk way before going all in.