Alex Zekoff

Nice map from Felicis breaking down the opportunity for AI agents in different markets AI agents are going after human services/labor

Once a decade or so in tech we get an industry-realigning platform shift, and today we're fortunate enough to all be living through the AI wave. When these moments occur, you have a brief period of a few years where the winners and losers will emerge in almost every category, which means you're essentially signing up to be going 24/7 during this window. When we first started Box right at the beginning of the cloud wave, for the first couple of years until we could at least feel like we had reached a point of "survival", we worked nonstop. Coding, selling, marketing, partnering, fundraising, hiring, pivoting, launching, everything. Sure, looking back we could have avoided 16-18 hour days by avoiding the time wasted on what would ultimately be useless work, bad decisions, or strategic misadventures. If we could go back and delete them from our calendars, we'd get all that time back.   But, it's impossible to know in the moment which is the wasted time and effort. The good decisions came as a result of pivots from the bad ones, and the misadventures only taught us how to be smarter in the future. There's basically no way we could've "worked smarter not harder" and achieved any similar outcome. And perhaps most importantly, we had a blast doing it -- sure it was straining, but we certainly wouldn't have worked that hard if we weren't at least *mostly* having fun. Now back to AI. There's probably more change happening at an even faster pace in AI than some of the biggest prior platform shifts like cloud and mobile. In comparison to cloud and mobile, there are billions of people that instantly can use AI so the markets are larger to start; there are more major platform providers competing for prime positions in the market; and there is a far higher rate of breakthroughs that advance the state of the art. So when you're in the middle of one of these windows like we're in with AI, the only thing you can do is just crank. It will by no means ensure success, but it will definitely improve your odds, which generally are quite low to begin with. So take every advantage you can get. And you’re not having fun doing it, you probably shouldn’t!

AI agents have the ability to fundamentally change the business model of enterprise software. Today, when you build a SaaS product, the primary business model is to sell seats that are tied to the end-users of your service. For "same store" sales, you can essentially grow at the rate of the headcount growth of that customer, or by adding additional capabilities on top of your offering. This business model is, of course fantastic, and has been around since the earliest days of enterprise software, and will keep going forever. But AI Agents unlock an entirely new business model in software, because you can now grow in a way that is uncorrelated to direct enterprise headcount or even external factors to your software. What's amazing about this model is that the AI vendor actually can directly grow itself within an enterprise account due to direct productivity gains.  For instance, imagine an AI Agent that can generate outbound sales demand for a startup. Traditionally, B2B companies will start by hiring a very small team of maybe one or two people, and increase resources in this area in a very incremental fashion -- essentially a process that looks like a guessing game where you try to predict how much demand there might be in the market, the ability to fund new resources, and the length of time it takes to hire great talent. In a world of AI Agents, you would simply set a budget and then decide how fast you want to grow. This is much closer to the business model of Google Adwords than it is of a traditional SaaS service. The same would be true for entirely different functions, where AI Agents can develop software at the rate of how many software projects you want built or how many legal documents you want reviewed -- all unconstrained by a company's headcount. This will even happen in areas where you wouldn't initially expect demand levels to change just because you move to AI, but in fact where there's plenty of latent demand. For instance, in front-line support, in a world where AI Agents can answer a greater set of questions a customer might have, you could see the kind of interaction volumes going up far higher in a world of AI.  This all has major implications to the economics of software, and it means that the AI Agent business model goes after a far greater pool of spend than just traditional IT. If software products now directly *drive* company productivity instead of just *enabling* company productivity, this could lead to a step-function change in the size of IT markets over time. Wild.