"The reality is if you sell tools today, you're really in the line of sight for the models, and you're effectively competing with the next generation that they're they're going to launch. Bek said the founders he works with are wondering if they're just an iteration away from the models replacing what they're doing."
"By focusing on services, Bek said founders can ride the wave of AI advancements rather than trying to carve out an area that is likely ripe for takeover. It's why Bek said the best bet is to focus on services, with the next $1 trillion company being a software company masquerading as a services firm."
Sequoia partner Julien Bek warns founders that selling tools positions them directly against major AI labs' next-generation models, risking obsolescence. Many portfolio founders fear being just one iteration away from replacement. Bek advocates for a strategic pivot toward services-based models that sell outcomes rather than tools. He argues the next trillion-dollar company will be a software business masquerading as a services firm. This approach allows founders to ride AI advancements rather than compete against billions in AI lab spending. Recent market disruptions, including Claude's advancements triggering a SaaSpocalypse that erased over $1 trillion in tech valuations, underscore the urgency of this strategic shift.
Read at Business Insider
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