Sudden Business Demise
Ira Bodnar, the co-founder of Ryze, an ad automation startup, recently shared a startling experience on X, formerly Twitter. She described how an update
to Anthropic's AI assistant, Claude, completely decimated her company's growth prospects overnight. Ryze had achieved significant traction, securing several hundred paying clients in just two months and boasting an impressive 70% sales close rate. However, after Claude introduced a new feature, Manus, which integrated with Meta Ads, the startup's performance plummeted, with the close rate dropping to a mere 20%. Bodnar expressed that Claude had essentially rendered their entire product category obsolete, causing her to feel that further development in that area was futile, especially considering Claude's potential to expand its capabilities to Google Ads within months.
Ryze's AI Automation
Ryze had developed a sophisticated AI agent specifically engineered to streamline and automate the complex process of digital advertising management. The system was designed to provide users with a seamless experience, allowing them to grant it access to their Google and Meta ad accounts. Once authorized, the AI would autonomously manage advertising campaigns, optimizing performance and saving users valuable time and resources. This innovative approach resonated strongly with the market, contributing to the rapid acquisition of hundreds of paying customers within an eight-week period. The product's effectiveness was validated by its remarkable 70% sales close rate, indicating high customer satisfaction and a clear market demand for automated ad management solutions.
Strategic Pivot Underway
Despite the abrupt and significant setback, Bodnar indicated that Ryze is not succumbing to the challenge. She revealed that the team had proactively anticipated the rapid evolution of AI platforms and had already initiated a strategic pivot some weeks prior to the Claude update. This foresight allowed them to begin transitioning their focus before the full impact of the AI advancements was felt. The company is now concentrating on developing complex workflow solutions tailored for large advertising agencies that manage an extensive number of accounts, with some clients handling as many as 600 accounts with a lean team of just six individuals. Bodnar described the scale of operations for these agencies as 'insane,' highlighting the immense complexity and volume of work that Ryze aims to address with its new direction.
Wider AI Disruption Debate
Bodnar's experience has amplified a broader discussion within the tech community regarding the disruptive potential of rapidly advancing AI platforms. As major AI companies like Anthropic expand their offerings into more specialized vertical markets, such as advertising, coding, research, and workflow automation, niche Software-as-a-Service (SaaS) products face an increasing risk of sudden competitive pressure. Claude, for instance, has moved beyond simple chat functionalities to incorporate agentic tools like Claude Code and Claude Cowork, enabling deeper integration into user workflows. Reactions on social media were varied, with some commending Bodnar's agile pivot as a sign of strategic business acumen rather than a failure, while others debated the necessity of building highly specialized tools that can outperform generalist AI agents in specific tasks like advertising optimization. This episode underscores the inherent volatility of building startups within the AI ecosystem, where platform-level updates from dominant AI firms can dramatically reshape the competitive landscape in a very short timeframe.
