Building AI Products, Part 1: How To Find AI Use Cases Worth Building in the First Place

In February 2024, Klarna announced its AI assistant was handling two-thirds of customer chats. It was doing the work of 700 agents and cutting resolution time from 11 minutes to 2. It looked like the AI success story everyone wanted. Fifteen months later, Klarna was hiring humans again. The CEO admitted that a focus on cost had led to "lower quality" and customers still wanted a person for complex cases. The AI stayed and alongside people.

So which Klarna got it right: the one that automated 700 agents' worth of work or the one that hired people back? Picture two chats. "Where's my refund?" has one answer, sitting in a database. "Why was I charged twice?" needs someone to hear the customer out and make a call. AI can handle the first on its own. The second needs a person or at least a person checking.

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