# The AI Automation Agency Journey Explained (3 Key Phases)

Source: https://www.youtube.com/watch?v=hqxvIju_yjs
Recap page: https://rapidrecap.app/video/hqxvIju_yjs
Generated: 2025-07-17T03:05:41.889+00:00

---
## Quick Overview

The AI Automation Agency journey progresses through three distinct phases: the AI Automation Agency (AAA) for non-technical individuals using low-code/no-code tools for basic automations, the AI Agency for custom development with full-stack developers, and finally, the AI Transformation Partner (AITP) which offers comprehensive strategic and implementation services for large-scale business transformation, tapping into a much broader market and securing six-figure deals.

**Key Points:**
- The AI Automation Agency (AAA) is the initial phase, ideal for non-technical individuals, focusing on basic AI automations using low-code/no-code tools, with projects typically valued at $3,000-$10,000.
- The AI Agency represents the second phase, involving custom development of AI solutions using traditional coding, requiring full-stack developers, and commanding project values of $30,000-$100,000.
- The AI Transformation Partner (AITP) is the most advanced phase, offering comprehensive strategic and implementation services, including initial audits (e.g., $60,000 for 4 weeks) and leading to six-figure development deals ($150,000-$250,000).
- The transition from AAA to AI Agency involves gaining experience and hiring full-stack development talent to handle more complex projects.
- The shift from AI Agency to AITP broadens the market reach by engaging businesses not yet ready for direct development through discovery and education processes.
- AITP focuses on building long-term partnerships by transforming a client's entire business through AI innovation, management, and strategy.
- The speaker's company, Morningside AI, evolved from custom development (AI Agency) to leveraging low-code/no-code (AAA) for broader accessibility, and is now shifting towards the AITP model to capture larger market segments.

![Screenshot at 0:56: Hand-drawn diagram on a whiteboard showing three increasing ramp-like segments labeled AAA, AI Agency, and AITP](https://ss.rapidrecap.app/screens/hqxvIju_yjs/00-00-56.png)

**Context:** The speaker addresses the prevalent confusion surrounding various AI business models and agency types, such as AI Automation Agencies, AI Agencies, and AI Transformation Partners. He aims to simplify these concepts by outlining a clear progression through three distinct phases, based on his experience building and scaling Morningside AI. The video provides a roadmap for individuals and businesses looking to enter or advance within the AI services industry, explaining the technical requirements, typical project values, and market opportunities at each stage.

## Detailed Analysis

The video clarifies the three phases of AI agencies, addressing the confusion around various AI business models. The first phase is the AI Automation Agency (AAA), serving as an on-ramp for non-technical individuals. This model leverages low-code and no-code platforms like Botpress, Voiceflow, Make.com, and Zapier to build basic AI automations, typically generating $3,000-$10,000 per project. The speaker's own company, Morningside AI, initially started by offering AI consulting calls and then transitioned into building custom knowledge chatbots, which evolved into the AI Agency phase. The AI Agency focuses on custom development, requiring full-stack developers capable of building more complex software and applications using traditional coding methods like Python and LangChain. Projects in this phase typically range from $30,000 to $100,000, allowing for the creation of full SaaS platforms. The final and most advanced phase is the AI Transformation Partner (AITP). This model expands beyond just development, offering a full-service approach that includes educating clients, conducting in-depth discovery and audit processes (e.g., a $60,000 four-week audit), and then prescribing and implementing comprehensive AI solutions. AITP targets the broader market, including businesses not yet ready for direct development, and aims for minimum six-figure engagements, with potential for $150,000-$250,000 in development deals, fostering long-term partnerships and significant lifetime value.

### Phase 1

- AI Automation Agency (AAA): Serves as the entry-level on-ramp for non-technical individuals
- Utilizes low-code/no-code platforms like Botpress, Voiceflow, Make.com, and Zapier
- Focuses on building basic AI automations and integrations
- Typical project values range from $3,000 to $10,000

### Phase 2

- AI Agency: Represents an upward shift from AAA, requiring more technical expertise
- Involves custom development using traditional coding methods like Python and LangChain
- Requires hiring full-stack developers, ideally with AI experience
- Projects are more complex, ranging from $30,000 to $100,000, including full SaaS platforms

### Phase 3

- AI Transformation Partner (AITP): The final evolution, focusing on comprehensive business transformation
- Offers a full-service approach including education, discovery, and strategic implementation
- Targets a broader market beyond just development-ready businesses
- Engagements start at a minimum of $100,000, with audits around $60,000 and potential for $150,000-$250,000 in subsequent development deals

### Transitioning Between Phases

- Moving from AAA to AI Agency involves gaining experience and hiring full-stack developers
- Shifting from AI Agency to AITP requires offering strategic discovery and audit processes to engage a wider market
- Each phase builds upon the previous one, increasing project scope and revenue potential

### Market Opportunity and Sales Cycle

- AI Agency targets early adopters ready for development
- AITP expands to include the early and late majority of businesses
- AITP involves an extended sales cycle, building trust and rapport through discovery before development
- Long-term partnerships with AITP can yield hundreds of thousands in lifetime value

![Screenshot at 0:03: Text overlay showing '3 Phases of AI Agencies'](https://ss.rapidrecap.app/screens/hqxvIju_yjs/00-00-03.png)
![Screenshot at 0:05: Animated graphic illustrating three increasing bars representing growth phases](https://ss.rapidrecap.app/screens/hqxvIju_yjs/00-00-05.png)
![Screenshot at 0:10: Collage of YouTube video thumbnails related to AI agencies and business models](https://ss.rapidrecap.app/screens/hqxvIju_yjs/00-00-10.png)
![Screenshot at 0:17: Meme of Leonardo DiCaprio pointing, representing recognition of a concept](https://ss.rapidrecap.app/screens/hqxvIju_yjs/00-00-17.png)
![Screenshot at 0:36: Speaker on a Miro whiteboard, beginning to draw the three-phase progression diagram](https://ss.rapidrecap.app/screens/hqxvIju_yjs/00-00-36.png)
![Screenshot at 1:33: Text overlay posing questions about the terms: 'What do these terms mean? How are they different? When should you start one? When to move to another?'](https://ss.rapidrecap.app/screens/hqxvIju_yjs/00-01-33.png)
![Screenshot at 3:12: Logos for Make.com and Zapier, representing low-code/no-code automation tools](https://ss.rapidrecap.app/screens/hqxvIju_yjs/00-03-12.png)
![Screenshot at 4:13: Meme of a family gathered around an old computer, symbolizing non-technical users](https://ss.rapidrecap.app/screens/hqxvIju_yjs/00-04-13.png)
![Screenshot at 7:40: Hand-drawn bell curve illustrating the technology adoption lifecycle](https://ss.rapidrecap.app/screens/hqxvIju_yjs/00-07-40.png)