Don't trade your industry know-how for $10000 software

There is a tidal wave in tech. More code is getting written every month than what was written in decades. In every peer conversation, the question invariably turns to that of moats. If software is easy to build, where is the moat?

There cannot be several platform winners (the ones that orchestrate context for agents to do the right things). At the application layer, thanks to how good some of the coding agents have become, it is easy to custom build a lot of software. In roughly 3 weeks, we have replaced an annual spend of $50000 in software and are doing work that would allow us to not increase headcounts in non-engineering functions.

We are a tech company. Yours may not be. So what should be your game? In every tech wave, the tech companies made more money than the ones they served. Let's do it differently this time.

The prep before the game

Most software today powers mundane workflows, simple compliance routines, and dumps industry-specific grunt work on humans because the software was built to be general. Specificity is where your software investments have to go to.

How specific?

Start with replacing software that you use 20% of. Move to the grunt work that your team is doing. Stop automatically assuming that headcount is how you solve bottlenecks. Find what takes time away from your current team that can be automated.

I am not talking any platform language. No orchestration. No expensive data cleaning. No model building for forecasts. I am talking about your industry's mundane things. Automate them with specificity – in 4 to 8 weeks. And then the next set, and so on.

Spend $20,000 and free up your team in 8 weeks. No recurring software cost. No additional headcount to feed to the grunt machine.

The Game Reveal

The most enterprising small and lower mid-market companies we know are becoming AI companies. They don't proclaim it through a pitch deck. They become one by being intentionally specific about their workflows and doing them in a way software vendors could not have.

Physiotherapists, Attorneys, and Oil well operators are turning into AI entrepreneurs and their companies are their first customers. They don't care for total addressable markets. They know 300 of their peers that they have met every year at conferences who would spend $25000 to build a $7.5M business that a PE would buy. 

Small PE-sized outcomes are going to be the norm in many niches. Those won't be served or taken by tech companies. These niches are too much detour; too much grime. As such, who cares about accounts payable for oil wells or price rebate based CPQ for electrical products?

Well, the entrepreneurs in such industries do and we do.

What's under the rock?

AI opportunities are the things you would find when you comb a rural field with metal detectors. You will get cola cans mostly but some silver coins as well. The trick is to know where to comb. The vertical industry entrepreneurs are treasure hunters. You have the map. You know where to look.

Don't pay $100s of $1000s of dollars to educate the tech industry how to build software for your industry. Instead, spend the same money and co-own these companies. A private equity outcome is within reach in every industry. Set up well, you have the cake (your main business) and eat this too (a piece of the AI pie).

Are you sitting up already?

Don't buy software. Don't outsource to build. Don't trade your valuable know-how for a cheap trinket. Instead let us co-build for a business case where we get to a $5M revenue company that serves 500 of your peers in a manner that only you can imagine. 

Write to me. I am at [email protected].

Enjoy your Sunday!

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