September MBA: I am not a Juicer Business

TL;DR

AI consultants sell companies what they want, not what they need; a Juicer Business extracts value without creating it; a Value Business does the opposite.

Juicer Business vs Value Business

I don't want to build a Juicer Business (JB).
And I don't mean “a business that produces juicers”.

I tried the classic consultant route: going to companies and asking what they wanted.
But they only know what they want, not what they need.
And the result is a market full of JBs, people telling companies: “I'll give you what you want, even if it doesn't solve your problems”, and walking off with the cash.

This is what rent-seekers do: they implement the proposals companies hand them, without caring about creating real value.

├─ The consulting world in Bolzano, Italy

I came across this phenomenon in AI consulting (but it turned out to hold in marketing too).

Since Claude Code exists, YouTube has filled up with videos teaching you “how to sell a €1200 tool built in 10 minutes”.
So “expert AI automation consultants” pop up like mushrooms.
(In two months I met a dozen “great AI experts” in Bolzano. I thought it was a shithole: turns out it's the Italian SF!)
People with no technical skills, no academic background, who until a few days earlier were employees in some unremarkable office.
But as of today they've got a website (vibe-coded, with an illegibly tiny font), a price list (copied from YouTube: €1000 audit, €5-10k implementation) and a technical blog (written by Opus 5).
Real consultants, clearly.

And yet this stuff works.
It works because companies want AI at all costs, without the faintest idea of what it is.
They've never used a single AI tool, but they've heard that “AI automates things”, “speeds up processes”, “cuts costs” (maybe they read it in a LinkedIn post written by Claude), so they want it too.

That's how you make €80K in 15 months!
(Not a joke: I know “consultants” pulling these numbers.)

├─ A Demand Business does not create value

One day an economist woke up, drew a graph with two lines, and said: “Price is set by supply and demand”.
This spawned the greatest misunderstanding in the history of business, when the founder-wannabes read it as “Value is set by supply and demand”.
Economists tried to explain that price is a noisy, biased estimator of value, but those are people who read motivational threads on X...

Example for people who read motivational threads on X

When a 3-year-old asks you for his 10th lollipop in a row, you don't hand it over.
You try to get him to eat something else, to explain why eating so many is bad...
You look after his health.

Talk to a rent-seeker AI consultant and he'll tell you about his mission to help companies, how happy they are with his help, how popular his service is given how much work he's got.
But get closer and you'll find out he's still fixing bugs on a project he delivered months ago; that a company has reached out because something stopped working; that a client can't use a tool because the interface is too complex...
By that point you'll probably already have discovered that he has no STEM degree, no background in programming, and doesn't know what the fuck Docker is (TRUE STORY).
He has no idea what he's doing, basically...

These consultant-wannabes badly implement a solution the company handed them.
They don't work in the problem-space, they don't look for solutions, they don't analyze processes to find the best way to solve them.
They work in the solution-space, neatly laid out by the company, which shows up wanting “a chatbot to speed up tasks”.
And in the end the company is left with a shiny red drill, without ever having discussed with the consultant the size of the hole it actually wanted^{[Cool history of this quote]}.

This is a Juicer Business (or, more elegantly, Demand Business): a business that only answers demand, squeezing it to extract every drop of monetary juice it can.
And just like making lemonade, in the end the lemons get nothing back and are thrown away.

Legal remark

We could also open the question of the legality of the implementations.
Because it's not just that they can't program, don't know what Docker is, have never done a project outside Claude's context: I have talked to consultants who think they know GDPR, the EU AI Act, cybersecurity... while they don't, and they sell non-compliant solutions.
Which is, well, fucking illegal.

├─ What's value

It's not fair to talk about value without defining it.
At the same time it's very hard, so to answer I'll talk about how I wanted to do consulting myself.

When I worked in corporate hell, I was the only applied mathematician among the 3k people working in a plant full of operators and managers.
In that month I ran into a couple of problems whose solution required my skills, knowledge, and analytical instincts:

• A years-old online-offline data mismatch that, in my view, came down to where the router was placed. The fix was cheap and easy to implement: use a tool to measure WiFi signal strength. Or, for an analysis across all the machines, a 3D simulation of signal propagation (the kind of simulation I used to run at university).
• A machine stoppage every 2-3 weeks, caused by a badly made part from an outside supplier. You can't catch it before installing it, so the company can't push back and demand answers (“You broke it during installation”). A researcher I worked with studied gaussian splatting, and searching online I found enterprise-grade scanners used in exactly these situations: you scan the part, generate a CAD model, and compare it against the original 3D model. Sure: it's a €20K investment for the scanner, plus the overhead of building a workflow pipeline... but we're talking about a 45-60 minute stoppage, a team of 4-5 people mobilized, tens of thousands of unproduced units: several hundred thousand euros a year in losses.

Details aside: the value I brought was my perspective and skill as a mathematician, which no one else in that plant had.
My long-term vision was to bring in a team of experts across different fields (depending on the company, the problems...) and set them loose inside companies for 1-2-3 weeks to find and solve problems that the operators and managers don't have the skills to identify, let alone solve.

THIS, to me, is bringing value to a company.

Problems with my idea

Many actually...
The main one being that it's the exact opposite of the Juicer Business approach: solving problems the company doesn't know it has and/or doesn't know how to solve.
And companies don't hire outsiders to solve that kind of problem.
Classic U-U and A-U quadrant situation.

Value is tightly linked to what a company needs, NOT to what it wants.
In the AI-consulting example, companies' want comes from an information asymmetry: companies don't know that they don't know anything about AI, about the risks, the potential, what the best use for it in their own company would be...

Need is the opposite: it's what the company would choose if you removed the information asymmetry.

In this light, it's the information asymmetry that defines the relationship between price and value: price and value diverge in proportion to the information asymmetry.

The Want is demand under information asymmetry.
The Need is a choice made without information asymmetry.

Juicer Businesses work under information asymmetry, they SELL it.
Value Businesses REMOVE information asymmetry.

└─ Whose fault?

The blame for this shitty situation lies with both demand and supply.

The information asymmetry is partly the fault of clients who don't inform themselves.
Value Businesses have a better ROI, but they lose market share to Juicer Businesses because of clients' failure to inform themselves^{[See the writing coach post-mortem]}.
NB: you could argue it's the VB's own fault for being bad at marketing. But this post is meant to highlight the visceral core of the problem, which in my opinion isn't solvable by “better marketing”.

Example: multivitamins

The multivitamins sold in drugstores are borderline scams: they don't contain a sensible dose of anything.
And they cost way more than science-based supplements: my €200-300/y stack would be €1000-1500/y bought there!
Their profitability rests precisely on the fact that their VAST target audience doesn't research what they put in their mouths, they buy the brand, the (false) safety of the pharmacist's suggestion...
No amount of marketing is enough to change the cultural habits of an entire population.

Supply, on the other hand, is guilty of the sin of exploiting the information asymmetry instead of solving it.
Of “making money off other people's ignorance”, so to speak.
They burn through clients' budgets, and they validate the idea that “consultants are always out to screw you” once companies notice the quality of the service.
They pollute the market, plain and simple!

And in a market poisoned by information asymmetry, founding a VB is a choice against that market.
And like every choice against the market: it's a losing one.
Then what if you hate JBs?
What if you, like me, feel disgusted by JB-founders squeezing clients?
What if you feel the urge to write a post stating to the universe: “I AM NOT A JUICER BUSINESS”?

You roll up your sleeves and go looking for an unpolluted market to build a VB in.
That's what you do.
And that's what I will do.

Two final remarks:

• You could argue a JB is simply “a business that works” (going by profitability, say). My answer to that: if you consider a JB-founder a successful entrepreneur: 👍. Just be aware that I don't want to work with you.
• This post is pretty much my lived experience of Mazzucato's value extraction vs value creation point. Basically I'm rediscovering economic dynamics from first principles. Not sure whether that makes this post more or less valuable...

Life's shit if you're a lemon in the hands of someone making lemonade.