Instead of subscriber counts, 6AM City uses a specific revenue threshold to decide when to staff an AI-powered "seed" market with a human editor. Once an automated newsletter can generate enough revenue to cover an editor's salary (e.g., $5,000/month for a $60,000/year role), the company invests. This ensures financially sustainable, de-risked expansion.
Related Insights
A pragmatic way to fund expensive AI tools is to reallocate the budget from headcount that leaves through natural attrition. When a GTM role departs, use their budgeted salary to fund AI agents that can scale the work of the remaining team, avoiding new budget requests and the need to fire performers.
To maintain quality, 6AM City's AI newsletters don't generate content from scratch. Instead, they use "extractive generative" AI to summarize information from existing, verified sources. This minimizes the risk of AI "hallucinations" and factual errors, which are common when AI is asked to expand upon a topic or create net-new content.
Most companies are not Vanguard tech firms. Rather than pursuing speculative, high-failure-rate AI projects, small and medium-sized businesses will see a faster and more reliable ROI by using existing AI tools to automate tedious, routine internal processes.
The true ROI of AI lies in reallocating the time and resources saved from automation towards accelerating growth and innovation. Instead of simply cutting staff, companies should use the efficiency gains to pursue new initiatives that increase demand for their products or services.
Marketers mistakenly believe implementing AI means full automation. Instead, design "human-in-the-loop" workflows. Have an AI score a lead and draft an email, but then send that draft to a human for final approval via a Slack message with "approve/reject" buttons. This balances efficiency with critical human oversight.
A unique dynamic in the AI era is that product-led traction can be so explosive that it surpasses a startup's capacity to hire. This creates a situation of forced capital efficiency where companies generate significant revenue before they can even build out large teams to spend it.
Initially, 6AM City hired two editors per market. Over time, they discovered a more efficient model: empowering a single, autonomous local editor and centralizing all other operations (marketing, sales support, design). This streamlined the process, reduced overhead, and allowed the local editor to focus purely on creating a high-quality, localized product.
To see if an offer is scalable, factor in your own labor as a direct cost. Ask, "What would I have to pay someone to do this work?" Including this "founder salary" in your unit economics reveals the real profit margin and whether you can afford to hire help to grow.
To generate content for its AI newsletters, especially in news deserts, 6AM City pulls information from a wide array of non-traditional sources. This includes city government pages, visitor bureaus, small businesses, large employers, and non-profits. This treats the entire community as a network of content creators, providing a rich source of relevant local information.
Traditionally, service businesses lack scalability for VC. But AI startups are adopting a 'manual first, automate later' approach. They deliver high-touch services to gain traction, while simultaneously building AI to automate 90%+ of the work, eventually achieving software-like margins and growth.
