Great series of posts - very thought provoking. Some additional thoughts to consider:
- Re: Software aversion: It's a double edged sword: looks like software aversion but is often just change aversion. Anything you try to do with that business will be an uphill cultural battle. Have to ask at what point it makes sense to start with a new foundation entirely.
- Re: Knowledge intensity: think the roll up model will be entirely different for, say, a law firm, vs a medical billing outsourcer. In a law firm, client relationships will still be lawyer-driven, AI pairs with lawyers as an oncall assistant or copilot, lawyers are managing AI agent output. In the medical billing outsourcing scenario, client relationships can become like self-serve software, much of the work can be automated so AI agents call the shots once domain knowledge is fully embedded, AI knows when to "escalate" to humans, so humans are the copilot. Economics likely to be different too - in one case, AI makes a law firm much more "premium" / boutique, hourly rates of humans go up. In the other, prices go down as costs go down, much of the benefits getting passed on to customers. Lower margin + lower switching costs (because switching from one software to another is easier than switching from one team of humans to another) lead to an AI-enabled medical biller having to expand quickly + move up or down the stack to look for defensible margins.
Both excellent points, Umang! Definitely a lot to be discovered around how this will play out for the 2 types of industries you mention - exciting to see it unravel in front of us. Totally agree with you on software/change aversion - very important to figure out whether an opinionated platform + process will be adopted if done by an owner vs a vendor, or is the juice not worth the squeeze.
Great series of posts - very thought provoking. Some additional thoughts to consider:
- Re: Software aversion: It's a double edged sword: looks like software aversion but is often just change aversion. Anything you try to do with that business will be an uphill cultural battle. Have to ask at what point it makes sense to start with a new foundation entirely.
- Re: Knowledge intensity: think the roll up model will be entirely different for, say, a law firm, vs a medical billing outsourcer. In a law firm, client relationships will still be lawyer-driven, AI pairs with lawyers as an oncall assistant or copilot, lawyers are managing AI agent output. In the medical billing outsourcing scenario, client relationships can become like self-serve software, much of the work can be automated so AI agents call the shots once domain knowledge is fully embedded, AI knows when to "escalate" to humans, so humans are the copilot. Economics likely to be different too - in one case, AI makes a law firm much more "premium" / boutique, hourly rates of humans go up. In the other, prices go down as costs go down, much of the benefits getting passed on to customers. Lower margin + lower switching costs (because switching from one software to another is easier than switching from one team of humans to another) lead to an AI-enabled medical biller having to expand quickly + move up or down the stack to look for defensible margins.
Both excellent points, Umang! Definitely a lot to be discovered around how this will play out for the 2 types of industries you mention - exciting to see it unravel in front of us. Totally agree with you on software/change aversion - very important to figure out whether an opinionated platform + process will be adopted if done by an owner vs a vendor, or is the juice not worth the squeeze.