Selling Software vs. Selling Work

One of the most interesting aspects of AI and how it'll change the workplace is how it might disrupt the large SaaS players and the SaaS model itself. The SaaS business model typically is set up around licensed "seats," where a SaaS company sells an individual seat to an individual employee to give them access to the software. The idea is that the software makes the employee more productive, and that gain in productivity is 2x to 5x the cost of the seat. This formula has led to the emergence of thousands of successful SaaS companies and hundreds of billions of dollars in market cap.

AI changes this quite a bit. Unlike SaaS, AI doesn't just make an employee more productive. It does the actual work of the employee.

As an example, if AI could triage patients coming into a hospital and connect them to the right next step (a specialty referral, an inpatient admission, a prescription, etc.), that's not making the healthcare provider a little more productive, that's opening up a nearly unlimited capacity to triage patients because the Ai can do it significantly faster 24 hours a day. 

This is very different than making an employee 20% more productive. And it's different from replacing an employee with a machine. It's taking ownership of a work product and removing caps on output. Try to imagine doing this across multiple areas of work inside of a company. All kinds of limits to growth and productivity will be removed, and companies could be infinitely more valuable. 

Coming back to the notion of SaaS and selling seats. The AI company would never sell this way. The ROI isn't centered around increasing employee productivity, it's centered around doing jobs with nearly uncapped output. It'll be interesting to see how this impacts the SaaS business model that has become so prevalent over the last several years.