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MARKET GAPS

Tuesday, August 26, 2025

ESPRESSO SHOT

Morning, gap‑hunters.

Your small‑business world just got reset: unexpected lawsuits, new checkout rules, and some common-sense legal thinking for founders.

Here’s what shifted and what to ship..

GAP OF THE WEEK: FTC Cracks Down on AI Scams

The hole: 

Many small businesses have been lured by AI tools promising “guaranteed growth”, only to end up on the hook for thousands in fees when nothing changes.

The wedge: 

The FTC just sued Air AI for deceptive claims that businesses could earn massive sums or get refunds. Turns out those are empty promises; and now, they’re illegal.
(Federal Trade Commission)

Why now:

• AI tools are everywhere, but regulatory frameworks are struggling to catch up.

• This enforcement signals the FTC wants real outcomes—not AI hype.

• Unscrupulous vendors are the exception; you're better off pivoting toward tools with audit trails and clear results.

Exit vision (this week):

1. Audit any AI tool you use: test claims, ask for proof of outcomes.

2. Pause “overnight scaling” tools unless they offer transparent performance tracking.

3. Risk-proof your tech stack: add a choose‑your‑own‑pilot clause or built‑in outcome guarantees.

SPOTLIGHT: Australia’s Right-to-Disconnect Hits Small Businesses

What happened: 

Starting today, Australia requires businesses with under 15 employees to let staff ignore non-urgent work messages (unless agreed otherwise) with penalties up to AU$135k for violations.
(arXiv, Federal Trade Commission)

Why it matters: 

If you’re building remote or global teams, this sets a new boundary standard for work-life respect, and compliance complexity.

What to do: Set clear after‑hours expectations now. Avoid sending Slack messages at 10 p.m. or at least call it “optional.” A small policy update now could prevent a lawsuit later.

TWO-MINUTE GAPS

DIY tech mistakes cost small businesses dearly
Business Insider lays out four common missteps (from ignoring software updates to poorly configured backups) and how to fix them before they break your month.
(Business Insider)

—

Main Street makes a comeback
Despite hospitality turbulence, micro-businesses are bouncing back through hyper-local marketing and creative partnerships.
(PYMNTS.com)

—

Enough brides asking for freebies
Brands doing bachelorette giveaways say they’re overwhelmed. Some fight back with formal policies, others just ghost the messy outreach.
(The Wall Street Journal)

WEEK IN 3 TWEETS

1. Deleted 20 Slack messages past 9 pm and never felt more compliant.

2. “AI tool promised ROI—or my money back” sounds like a dare. The FTC just took up the challenge.

3. “Micro-businesses are back on Main Street.” It’s not an editorial — it’s local shopping coming back stronger.

1) Dreams do come true

2) So Mom, how’s the job hunt going?

3) No truer meme has ever been made

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STAT OF THE DAY

AU$135,000 : maximum fine under Australia’s new right-to-disconnect law for small businesses ignoring after-hours boundaries.

TURBO HEADLINES

• WESST adapts to austerity: Entrepreneur support centers scramble after funding squeezes.
  (kunm.org)

• Bachelorette ill-intent: Small brands are getting spammed by zero-budget influencer behavior.
  (The Wall Street Journal)

• AI tool flops now under legal scrutiny: Regulators want promises to match reality.
  (Federal Trade Commission)

CLOSING LOOP

Publishing Tuesdays and Thursdays. Forward this to the founder who still thinks “AI guarantees” are business strategy.

Want a mini-audit template for your tech stack? Just reply “Checklist.”