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Harshith Viswanath's avatar

Hi Sahil! Sequoia's thesis on AI-Native Service Companies is interesting. You don't own the software layer but do the work. Services businesses such as law firms, accounting firms and consultancies often had to hire more people to increase profit. However, with the advent of AI the relation between headcount and profit margin no longer are relevant. What I think about AI-Native Service Businesses that puts them at advantage is compounding intelligence. These AI-Native Service Businesses can build a knowledge base that continues to compound and make the AI tool accurate as each and every matter is completed. This is the real advantage as in a normal service business the knowledge usually walks out with the partner who handled the matter. Furthermore, these AI-Native businesses can use the roll-up strategy to acquire existing service providers and optimize them with AI.

I write a blog in LegalTech titled "The LegalTech Thesis" where I analyze the LegalTech sector and identify opportunities to build. Would love to connect and get your thoughts on my latest post!

https://harshithviswanath.substack.com/p/three-legaltech-whitespace-plays

Byblos Digital's avatar

this is very good. one pattern we see from our seat tracking 600+ VC newsletters: the autopilots winning right now are quietly buying small services businesses and rebuilding them on AI underneath, instead of trying to displace them from the outside. roll-up + AI is becoming the real autopilot moat

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