AI SDRs Are a Huge Grift

this hype too shall pass

Author

Krisztian Berecz
November 28, 2024

When I first started thinking about Captiwate, one question kept popping up in conversations I was having with potential clients and investors: Will we, or more precisely, how will we incorporate AI into the tool?

Generative AI after all lends itself to automating tedious sales work. When a salesperson is not on the phone, they write emails or research prospects. If Gen AI can help with those tasks, then you have a billion-dollar business because you’ve successfully replaced skilled labor with automation - so goes the thinking.

And indeed there are successful examples: Clay is a fantastic tool for sales prospecting while Copy.ai pivoted from a simple copywriting tool into a specific GTM suite.

But now there is a new wave of companies explicitly aiming to replace SDRs with AI:  11x.ai, leadsend.ai, artisan.co, or the YC-backed AiSDR have all made waves recently. Even well-established players like qualified.com are pivoting hard into the AI SDR space.

The offer seems simple: why pay $5,000 a month for an SDR when you can just pay a fraction of that for a piece of software to do the same job?

Well, investors are less enthusiastic now than they were a year ago. Wherever AI was implemented, it was found wanting after the initial hype wore off in about six months. As Techcrunch wrote, quoting Arjun Pillai, founder of AI startup Docket:

“While these companies are experiencing rapid revenue growth, it’s unclear if they’re actually helping businesses sell more effectively.

“The question is how many companies have been paying for more than six months?”

And that’s really the crux of the matter. Sure, AI is good enough at imitating a salesperson, but when deployed as an AI SDR for say, an outreach campaign, the best it can do is spam your prospect list faster.

The receipts are starting to come in from AI SDRs. They are not pretty.

I talked to 4 CROs / VP Sales this week and they all said a different version of the same thing.

They saw a little blip of success the first week or two after a deployment. And absolute crickets after.

🔥 They picked the low hanging fruit, and burned down the orchard.

If you search for experiences with AI SDRs on Reddit, you’ll find similar resentment from customers who these companies let down.

Of course, the trick is that these solutions might be promising in the early stages, even yielding results, but they tap out quickly. Hence, these companies can ramp up new customers early, only to be bitten by churn 3-6 months down the line.

This isn’t to say that there’s no place for AI in sales - but the wholesale replacement of SDRs or BDRs is an overblown promise, or worse, a grift.