The 3 Attributes of an Attractive Market for AI
Call it Service-as-a-Software. Call it AI agents or agentic systems. There’s a brewing idea that AI will complete human labor especially in white-collar work. What attributes of a market make it attractive to pursue? Those with three attributes :
Toil, labor market shortages, and margin pressure.
Toil is repetitive work : reviewing alerts, triaging leads, data entry. Necessary but not strategic.
Jobs laden with toil tend to be difficult to recruit for & retain. Turnover rates of 30-50% are common in these roles.
Labor market shortages are a result of a mismatch between the supply of labor and the demand for it. Perhaps not enough graduates in a particular discipline. For example, accounting graduates have fallen approximately 18% since 2016. or too few applicants for a particular role like customer support.
Whatever the reason, the challenge is the same facing a hiring manager : difficult recruitment to maintain or grow headcount.
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Last, margin pressure. Wobbles in the economy are impacting the labor market. Unemployment is now at 4.3% & new job creation has fallen in half compared to the last 12 months employers will need to do more with less.
Recent earnings reports from publicly traded companies that use AI continue to underscore the significant cost savings when AI is deployed successfully.
Last week, Amazon reported the impact of its AI system called Q : “With Q’s code transformation capabilities, Amazon has migrated over 30,000 Java JDK applications in a few months, saving the company $260 million and 4,500 developer years, compared to what it would have otherwise cost.”
ServiceNow mentioned British Telecom (BT) : “BT Group announced that its now-assist pilot helps agents write case summaries and review complex notes faster, cutting both times by 55 percent. This helped drive down the average time to resolve cases by one-third.”
The ideal customer profile for an AI startup are hiring managers recruiting for rote work in challenging labor markets facing margin pressure.
When faced with the choice between a long hiring process or the potential to fulfill the role with a software robot at 15-20% the cost of human labor, a hiring manager calculated risk to try AI may result in tremendous savings to the business.
VP of Technical Engagement - Customer Success & Sales Development Fanatic
7 个月Really enjoyed the attribute breakdown. And there are many markets where all 3 attributes are apparent
University of Bedfordshire alumni
7 个月Both grim and glory juxtaposed , Tomasz Tunguz thank you for the write up, great job.
??♂? CEO founder, testers.ai
7 个月Love the ICP definition and esp the target pricing vs human labor. Much appreciated, helps ??
Head of Product
7 个月Just as robots in warehouses and factory floors are freeing humans from dull, repetitive, and unfulfilling tasks, AI agents are poised to revolutionize the white-collar workspace. Unlike their robotic counterparts, which are constrained by safety concerns, sensory limitations, and battery technology, AI agents are unrestricted by the constraints of the physical world. This enables them to deliver unprecedented productivity gains. These agents are not merely relieving enterprise workers from mundane and boring tasks; they are augmenting human capabilities, performing tasks on par with those handled by highly trained and well-compensated staff. In the not too distant future, we can anticipate AI agents completely redefining the profile of enterprise workers. They will not only enhance operational efficiency but also enable businesses to allocate human talent to more strategic and innovative roles, where they will again be assisted by AI. This shift will not only address the challenges of labor shortages and margin pressures but also unlock new avenues for growth and innovation. The future of work is here, and we are excited to be part of this profoundly transformative journey!
CTO at Digital Workforce Previously Co-Founder at Sema4.ai, CEO & Founder at Robocorp
7 个月AI agents are excellent for valuable work with undifferentiated toil at the core of it. Fewer people will monitor agents doing the work, and those people can manage all the difficult corner cases that require judgment calls and updating agents’ instructions. Tasks like invoice processing, reconciliation workflows, and insurance claims processing all involve a lot of this. Less toil leads to less turnover and more meaningful work.