AI Startups: Selling Work Instead of Software for Better Results

AI Startups: Selling Work Instead of Software for Better Results

In the world of AI startups, the traditional approach has been to sell software to improve end-user productivity. This software is often priced on a per seat basis, benchmarked against the cost of the headcount itself. However, there is an opportunity for startups to think beyond this model and explore new avenues for selling their products.

By leveraging Language Model Models (LLMs), startups can look beyond selling software and consider selling the work itself. This opens up new vertical opportunities that wouldn't have been possible for a software company. Take the example of EvenUp, a startup that had the foresight to sell the work product itself: the demand package. By selling the work, the sales cycle is different and the pricing is relative to the cost of a human performing the work. This allows for competition with outsourced groups internationally, providing a 10x cheaper and superior solution.

Selling work instead of software also addresses the fear that AI will replace humans over time. When tasks like putting together demand packages are automated, it benefits both the customer and the people in the firm. The customer receives better demand packages, while the people in the firm can shift their focus to more meaningful tasks like client services and acquiring new customers.

However, it's not enough to simply sell work. Startups must also find a way to escape competition. One way to do this is by focusing on the unique value proposition that AI-driven products offer. With their consistency and Service Level Agreements (SLAs), AI-driven products can outperform outsourced offerings. This creates a 10x cheaper opportunity that is hard to compete with.

On a different note, the illusion of transparency bias is a common cognitive bias that affects our social interactions. It refers to the gap between our subjective experience and what other people actually perceive. We tend to overestimate how much attention others are paying to us, assuming that they can read our thoughts and feelings. This egocentric bias leads to the spotlight effect, where we feel like there's a spotlight shining on us in social situations.

However, the reality is that other people are often thinking about their own things and paying much less attention to us than we think. They are not deliberately ignoring us; they are just preoccupied with their own thoughts. Understanding this bias can greatly improve relationships and job performance.

To overcome the illusion of transparency, it's important to accept that other people don't usually know what we're thinking and feeling. We should treat our hunches about their thoughts and feelings with skepticism and be similarly skeptical about their ability to read our minds. This can be challenging, as we often have the feeling that someone is lying to us or that our honesty will shine through. However, with practice, we can learn to resist these feelings and communicate more effectively.

In conclusion, AI startups have the opportunity to sell work instead of software to achieve better results. By leveraging LLMs, startups can explore new vertical opportunities and escape competition. Additionally, understanding the illusion of transparency bias can greatly improve our social interactions. By accepting that others don't know what we're thinking and feeling, we can communicate more effectively and build stronger relationships.

Actionable Advice:

• 1. Consider selling the work itself instead of just software. Think about the unique value proposition that your AI-driven product offers and how it can outperform outsourced offerings.

• 2. Focus on the customer's benefits when AI automates certain tasks. Highlight how it improves the quality of work and allows humans to focus on more meaningful tasks.

• 3. Be aware of the illusion of transparency bias in your social interactions. Treat your assumptions about other people's thoughts and feelings with skepticism and communicate openly and effectively.

Remember, the key to success lies in innovation, understanding biases, and finding ways to stand out in a competitive market.