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Newsletter #0005 - Which AI Should I Use;
Nikolas Hulewsky
March 29, 2025
Missed you all last week and am STOKED to download what I’ve been working on!
Over the past 2 weeks, I've interviewed 30 entrepreneurs who are actively using AI in their businesses.
I thought AI would help me automate a few tasks but I didn't know it would take me down the deepest rabbit hole I’ve ever been down!
Since I don’t have a real job (dont tell my wife 🤣) I have the luxury of doing the things that most of you running businesses or with full-time jobs can’t: mess around on the internet learning about AI.
It’s been mind-blowing and I’m so excited to share my findings with you!
This will be the first of a 10-part series I’m calling:
The Entrepreneur’s AI Playbook: 10 Weeks to Practical AI in Your Business
I know, its very creative haha.
This series uses those conversations to show what real founders are actually doing with AI.
No fluff. No theory. Just practical stuff (guides, templates, quizzes, information) you can steal.
I’ll still be writing about my normal business buying, starting and scaling things so enjoy the extra value!
Week 1: The Entrepreneur's Guide to LLMs: Which AI Model Is Right For Your Business?
Here's what I learned about which AI models are being used for what, and why YOU should care if you want to stay competitive.
I highlight 5 models and their use cases. My findings surprised me and I’m sure will surprise you too!
ChatGPT: The All-Around Thought Partner
Primary Users: Non-technical and intermediate users
Market Size: $2+ billion annual revenue
Growth Rate: 100+ million users in less than 2 years
ChatGPT is hands down the most popular LLM among entrepreneurs.
But here's what's interesting — while it's the most PREFERRED model, it's not actually used for the most tasks. Think of it as your Swiss Army knife: not specialized, but incredibly versatile.
The #1 use case? Acting as a thought partner.
Entrepreneurs told me they use ChatGPT to:
Brainstorm new ideas and strategies
Refine emails and messaging
Work through complex business problems
Create content skeletons before adding their voice
As one founder put it: "I start almost every project by asking ChatGPT what it thinks. It's like having a smart business partner who's available 24/7."
Claude: The Coder's Best Friend
Primary Users: Intermediate and expert users
Surprising Stat: Used by MORE entrepreneurs than ChatGPT in aggregate
Strength: Best-in-class for coding and project organization
This one shocked me.
Claude isn't the most preferred LLM, but when I tallied up ALL the use cases across ALL entrepreneurs, it's actually used MORE than ChatGPT.
Why? Two killer applications:
Coding assistance - Technical users consistently rated Claude as superior for writing, debugging, and explaining code.
Project organization - Claude has a killer feature where you can create project contexts with detailed instructions AND upload relevant files. Writers and project managers LOVE this.
One entrepreneur who runs an SEO agency told me: "Claude understands marketing concepts like StoryBrand better than any other AI. It's not even close."
Perplexity: The Research Machine
Primary Users: All technical levels
Unique Feature: Real-time web access
Value Proposition: Deep research without the deep costs
When I asked entrepreneurs about their research process, Perplexity kept coming up.
Unlike traditional LLMs, Perplexity crawls the web in real-time, meaning it can access current information without hallucinating.
One founder told me: "It's as good as Deep Research but doesn't cost nearly as much."
Entrepreneurs are using Perplexity to:
Research competitors
Stay updated on industry trends
Access accurate, current data without expensive API calls
If you're spending time googling things for your business, Perplexity might just be your new best friend.
Grok: The Speedy Responder
Primary Users: Intermediate users
Surprise Factor: High satisfaction despite being newer
Key Advantages: Speed, real-time data access
Nobody expected this one to be good so fast.
Entrepreneurs consistently praised Grok for its:
Lightning-fast response times
Access to real-time data
Overall quality that rivals more established models
One entrepreneur even said they were switching from ChatGPT to Grok for certain workflows because of how quickly it generates quality responses.
Life comes at you fast in business. Grok keeps up.
Gemini: The Google Suite Specialist
Primary Users: Google workspace users
Context Window: 1 MILLION tokens (vs ChatGPT's 120,000)
Primary Use Case: Google workspace automation
Despite being mentioned least frequently (and often negatively), Gemini has two killer use cases:
Google workspace automation - If your business lives in Google Docs, Sheets, and Gmail, Gemini understands these tools better than any other LLM.
Massive context window - Gemini can handle a context window of up to 1 MILLION tokens. That's like feeding it a 2,500-page book for context.
One entrepreneur who uses it to automate workflows said: "If you're trying to create workflows within Google suite, Gemini is the best because it just knows Google so well."
The Secret Weapon Nobody's Talking About
Beyond the LLMs themselves, there was one tool that kept coming up in my conversations: Cursor AI.
Multiple entrepreneurs (especially the technical ones) claimed it's going to be bigger than Google. That's not hyperbole - they were THAT excited about it.
Cursor is an AI-powered code editor that allows you to build entire applications and websites using natural language prompts.
As one entrepreneur showed me, you can literally describe a website and watch Cursor build it in real-time.
So Which LLM Should YOU Use?
Here's my TLDR framework for choosing:
If you're non-technical and need general assistance: Start with ChatGPT
If you need coding help or project organization: Claude
If you need up-to-date research: Perplexity
If speed is critical: Grok
If you live in Google Workspace: Gemini
But here's the most important thing I learned: The entrepreneurs seeing the BIGGEST results aren't just using one model.
They're using different LLMs for different tasks, playing to each model's strengths.
The real power comes from knowing which tool to use when.
The Takeaway
Start small. Pick ONE model and ONE area of your business that's repetitive or time-consuming, and experiment with how AI could help.
This Week’s Nikonomics Podcast Summaries
Podcast Summaries
🎙️ Guest: Amanda Orson
Business: Galleon – a marketplace for real estate without agents
Insight: Americans spent $100B on real estate commissions last year. Amanda’s platform lets sellers list directly—saving tens of thousands in fees.
Model: Free marketplace + paid software (Navigator) + B2B referral rev
🎙️ Guest: Derek Kolstad
Business: A 600K-subscriber design challenge newsletter
Insight: Derek scaled his newsletter empire without spending a dollar on ads—using Trojan Horse strategies and consistent flywheels instead.
Model: Automated daily emails, organic subscriber growth, monetized via high-CPM sponsorships and cross-promoting his own products.
🎙️ Holdco Bros: Chris Koerner
Insight: Deep Research > ChatGPT for some serious AI sleuthing—and banana ketchup might be the next Sriracha.
Model: AI + curiosity = unfair advantage. Also: vending machines selling vices, mobile game gyms, and custom GPT workflows.
Business Listing Analysis
Waterproofing Business: The Good, The Bad, and The Reality
Looking at this Colorado waterproofing business listing, here's my honest assessment of whether this opportunity is worth pursuing:
The Numbers Breakdown
Asking Price: $3,000,000 at a 4.8x multiple of cash flow - immediately this stands out as aggressive pricing for this type of business.
Pros ✅
Growing Industry: Waterproofing in Colorado has significant market potential
Established Business: Founded in 2020 but survived COVID and showed growth
Employee Structure: 45 employees with retained key team members
Seller Support: 12 weeks of transition assistance included
Financing Options: Seller financing available for qualified buyers
Turnkey Operation: "Self-sustaining" with established SOPs
Cons ❌
High Multiple: 4.8x cash flow is steep for a service business with minimal hard assets
No EBITDA Data: Missing critical profitability metrics
Recent Founding: Only operating since 2020 (limited track record)
Lease Situation: Leased property with limited details on terms
High Employee Count: 45 employees for $625K cash flow raises efficiency questions
Minimal FF&E: Only $200K in equipment for a $3M business
The J-Curve Warning
As I mentioned in my "Buying Your First Business" thread, expect the dreaded J-Curve after acquisition. Performance will likely dip initially as you build relationships, especially with 45 employees and established clients. Make sure you have cash reserves!
Critical Questions to Ask
Seller Add-Backs: What owner expenses are being added back to create that $625K cash flow number? Is compensation reasonable?
Customer Concentration: What percentage of revenue comes from top clients? In construction-adjacent businesses, having 2-3 clients represent >40% of revenue is common and dangerous.
Project Pipeline: What's the current backlog and sales pipeline? Is the $9.4M revenue stable or fluctuating?
Employee Structure: Who are the key managers? Will they stay after transition?
Margins: Why is cash flow only 6.7% of revenue? Industry standard should be 10-15%.
SBA Loan Potential
Using what I outlined in my SBA thread, this could qualify for SBA 7(a) financing with:
10% down ($300K)
Potentially a seller note for another 5%
10-year term
But the real question is: should you use SBA for this deal at this price?
Valuation Reality Check
Using my cash flow model approach (not industry multiples):
$625K cash flow
Assuming $2.2M loan at 7.5% over 10 years = ~$310K annual debt service
DSCR of 2.0x would be ideal (not the bank's minimum 1.2x)
This suggests a maximum value closer to $2.0-$2.2M
Bottom Line: 5/10
This business has potential but is significantly overpriced at $3M. I'd consider it a potential opportunity if:
Price negotiated down to ~$2.2M (3.5x multiple)
Verified stable customer base with limited concentration
Confirmed pipeline of projects for next 6-12 months
Key management retention agreements
Detailed breakdown of add-backs and true operational cash flow
If you love waterproofing, this could be a good platform for growth, but you're paying a premium that will take years to justify. In every deal I've done, remember: your win is made on the buy, not the sell.
How'd I Do Today? |
Every week, I’ll be answering a question sent to me via Twitter, Speakpipe or [email protected].
Thank you for reading, please share with a friend!
Nik Hulewsky