Pod Insights The Logan Bartlett Show EP 150: Bret Taylor (CEO, Sierra): A New Class of Software Winners About this episode Bret Taylor is the CEO of Sierra and Chairman of the Board of OpenAI. He previously served as co-CEO of Salesforce. I sat down with Bret to explore how the AI revolution compares to previous platform shifts and what it means for both startups and incumbents navigating this transition.
(00:00) Introduction and Recent Milestone
(00:38) AI Market and Historical Comparisons
(02:30) Competitive Landscape and Business Models
(06:02) Outcome-Based Pricing and Value Creation
(13:52) Technological Shifts and Business Transitions
(26:32) Adoption Challenges and Forward Deployed Engineering
(37:21) Early Investment in Snowflake and Cloud Strategy
(38:02) Enterprise Software Market Dynamics
(38:38) AI Agents and Implementation Costs
(41:06) Democratization of Software Development
(43:35) The Future of Software Companies and AI Agents
(49:36) Consumer Behavior and AI Agents
(58:56) The Role of AI in Customer Experience
(01:01:25) Career Advice in the Age of AI
Executive Producer: Rashad Assir
Mixing and editing: Justin Hrabovsky
Check out Unsupervised Learning, Redpoint's AI Podcast: https://www.youtube.com/@UCUl-s_Vp-Kkk_XVyDylNwLA
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About the Show
Logan Bartlett is a Software Investor at Redpoint Ventures - a Silicon Valley-based VC with $6B AUM and investments in Snowflake, DraftKings, Twilio, and Netflix. In each episode, Logan goes behind the scenes with world-class entrepreneurs and investors. If you're interested in the real inside baseball of tech, entrepreneurship, and start-up investing, tune in every Friday for new episodes.
Transcript 12,382 words · 2 speakers
0:00 Speaker 00 Brett, thank you for doing this.
0:01 Speaker 01 Thanks for having me.
0:01 Speaker 00 I'm glad we got it on the calendar. It's a good time to do it. You guys recently announced a new round. Congratulations.
0:08 Speaker 01 Thank you, I appreciate it.
0:09 Speaker 00 It's a nice milestone on the journey, a good testament to what you guys have built to date and where you're headed over time.
0:16 Speaker 01 Yeah, it's a milestone, but I think that's the way to put it. You know, raising, financing is just, you know, adding fuel to get to the place you want to go. And I think for an entrepreneur like me and my co-founder Clay, it's, you know, we want to create an enduring, durable company. And so it's just that, just a milestone. But it's a good time to reflect. We're really proud. I think we're the clear leader in the space we operate, which is AI agents for customer experience, customer service. But I always talk about how similar this AI wave is to the original internet wave. And AltaVista was first, and Google's the one who writes the history book. So we need multiple years of sustained, impeccable execution, basically, from here.
1:00 Speaker 01 And then I'll be happy. But I'm excited for the milestone.
1:03 Speaker 00 There's the Norm MacDonald joke, that like the good guys always won in history.
1:08 Speaker 01 Yeah.
1:08 Speaker 00 It's like, you get to define the terms of success in that way. I guess, what do you think to that end? When you're making that comparison to internet versus AI, like, where do you think the parallels exist? And what do you think breaks down as you kind of think about comparing the two?
1:24 Speaker 01 One thing that I think is quite similar is there were some very obvious bets on the internet, like search and e-commerce being two of the most prominent, and payments. You know, you don't need to be that savvy about the internet to think, wow, it might be useful. People could buy things, you know, digitally. And the question was, who will own that market? Will... Amazon and Buy.com had very different strategies, even different portfolios of products that they initially sold. Amazon clearly had a much better both strategy execution. There was a lot of details they got right. Look at the search market, you know, I mentioned AltaVista and Google, but one of the more impressive technical companies that we competed against was Ink2me.
2:07 Speaker 01 They had a really good engineering team and, you know, I could tell you why PageRank was better, but they had a solid team, but they had a B2B business model. They essentially licensed their search engine to portals. And that left out the opportunity to create AdWords, which turned out to be the greatest business model of all time. So there's so many details that, you know, dictate whether you're the one, you turn into Google or AltaVista or Ink2me. But going back to your question, what's interesting about the AI market is there are a few areas that are obviously going to be impacted by AI. Software engineering, customer service, content marketing, visual effects industry. There's probably others, different TAM, the legal industry.
2:49 Speaker 01 And as a consequence, you know, it's not like I got this great idea. Hey, if I told you, oh, my gosh, AI for customer service. It's not, the, the concept is obvious. The question is, do you have the right product? Do you have the right go-to-market model? That's why I mentioned the Ink2me, Google thing. Are you B2B or are you B2C? What is the packaging? What is the form factor that will become dominant? And so as a consequence, it's an intensely competitive time, just like I, my recollection of the dot-com era is. And, and I think that's really interesting. So you have very clear markets with very intense competition. And that's different than other markets. You know, I think, you know, when the mobile phone came out,
3:31 Speaker 01 some of those categories like ride sharing wasn't like a self-evident market, you know? And then there was a couple of great insights and it created, you know, the Ubers and the Lifts of the world. I think right now, many of the biggest markets are already known. And as a consequence, one of our company values is actually competitive intensity, which is unusual. And, you know, it's the, the first line of that is we know we're not entitled to our success. And I think it's a really important part of being successful in this era. Where it breaks down, I think it shifted the landscape of what is a software company? I love the example of Harvey is a company I really admire. I can't think of like a great legal tech company. I'm sure there are a couple.
4:12 Speaker 01 I don't mean that in a backhanded way towards any of them, but it wasn't like if you went through the top 10 enterprise software companies in public markets, there's not one in legal tech, right? There's ERP systems and CRM systems and all these others. It's just not one of the key categories. In part because the TAM for selling productivity enhancement to lawyers is not that big. But now all of a sudden with Harvey, if you're actually doing the work and doing the antitrust review, all of a sudden the total addressable market looks huge because the addressable market of legal advice and legal labor is actually quite large. So that's really interesting to me because I think we've, the traditional perception
4:56 Speaker 01 of where there are addressable markets in software, I think, has been upended because agents aren't simply productivity enhancements for people, but actually doing a job. And as a consequence, I think how you evaluate, you know, the value of a piece of software starts to move away from traditional, traditional software productivity metrics. And you think about a CERA agent that actually makes a sale for you. There's not, the way you would value that is not really even related to AI or software. The way you'd value it is basically what are the margins on that sale? What would be the commission you'd pay a person to make that sale? And so as a consequence, I think it really has like dramatically shifted the traditional
5:41 Speaker 01 view of how to value software, just as either a venture capitalist or an economist. It's really changed the markets and I think, I'm excited for that. I think it's going to be a really positive thing for our industry.
5:51 Speaker 00 The other great thing is I can dub over you saying Harvey and Splice and Legora for the totality of that. And so we don't have to give any plugs to, you know, to Harvey throughout this. Sorry, I apologize. It's a great market. No, it's a great example too, though. I'm curious, like one of the things that I've thought about with your example, and I'd be curious what you think of this is like. To some extent, the outcome-based pricing in general is so demonstrable ROI. And it's very clear what people are willing to pay for it in some ways. And also, you're somewhat beholden to alternatives in some ways. And so like, I think about what value I get from Zoom.
6:35 Speaker 00 And if Zoom was the only thing that existed in the world, I don't know. We could probably get Redpoint to pay $10 million for it or something, right? Just because it's like that impactful to our day to day. But they don't get to charge that because there's Teams and there's Google Meet and there's other stuff like that. And so I guess as you think about outcome-based pricing for your business or for Harvey and LaGora like doing work in that way. Is there any framework or like, how do you think price pressure plays out in some ways? When there are these alternatives that can exist? Do you think that it ends up eroding some of the ROI pricing that you can get in the early days?
7:19 Speaker 01 I have a slightly different way of thinking about it, but I'll try to answer your question directly to.
7:24 Speaker 00 You can reject my question.
7:25 Speaker 01 No, it's like really obnoxious. It's a different question. I think part of the reason that there is price compression for tools like Zoom or Slack and Teams is in part because the value you get from a sort of horizontal productivity tool is very hard to measure. If you just think about running a 120,000 person company that's a global company, you're paying per seat for something like a Zoom or a Slack or something. It's sort of funny because you're paying the same value per seat for like the most sophisticated research and development engineer and like the new grad and you're.
8:04 Speaker 00 Sure.
8:04 Speaker 01 Pick the least strategic department of whatever that company does. And as a consequence, I think when you're thinking of horizontal software, whether it's productivity software, communication software, you end up with pricing that is somewhat commoditized. And there are some rare exceptions where companies are able to charge a premium. In contrast, though, if you look at the enterprise software market that are oriented towards departments, say ServiceNow for ITSM, or Salesforce for CRM, or SAP for ERP systems, the value that those companies derive per seat for their application is traditionally much larger, usually more than an order of magnitude of software like Zoom,
8:48 Speaker 01 even though many fewer people use it, but it's closer to a business value. You know the value of balancing your company's ledger and auditing your financials before earnings call. You know the value of a sale. And as a consequence, the business value you're selling is more measurable. It's closer to that business value. The analogy I would give for outcomes-based is we're going from impression ads to CPC ads. And one way of looking at outcomes-based pricing that I don't agree with is you're leaving money on the table. That would be like making a modern cost-per-click ads auction
9:31 Speaker 01 and saying you're leaving impressions on the table. And that's not the way anyone thinks of it anymore, just because history's played out and the value has accrued towards CPCs and cost per conversion now for modern ad networks. I think in the digital economy, the closest you can get to a measurable, accountable outcome, the more value will accrue to your platform. And so going back to your question, will competition cause price compression? Probably. But I think in general, the closer you are to a really valuable business outcome, the more your platform will be valued relative to the value of that business outcome
10:13 Speaker 01 as opposed to being compared to another piece of technology. And So, you know, it's interesting, I'm not sure what outcomes based would be for Zoom, because you'd have to ascribe a value to every single video call you have. And I'm sure some are quite important when you're, you know, closing a huge deal, and some are totally trivial. And that's just not easy.
10:37 Speaker 01 In Sierra's business, we help build AI agents for customer experience. And you know your cost per contact in your call center, and you know the cost savings that an AI agent could drive. You know the value of a new product sale, and if your AI agent helps make that sale, just like you know how much, you know, you pay a salesperson for doing that, you know how much it's valuable it is to your agent. And as a consequence of being really close to that value, I think it's a really natural way to charge for it. And for companies, it means they can model this not proportional to sort of the cost of a technology, but proportionate to the value that they're getting as a business. The thing I think will happen, which is a mix of competition and technology adoption,
11:20 Speaker 01 is a lot of AI agents now are being compared to their human counterparts, whether it's labor costs or effectiveness. In a market like software engineering or customer service scenario that, you know, perhaps like, you know, conventional wisdom is AI agents will come to be dominant parts of this industry, you have to imagine that in 10 years, you'll start comparing agents to other agents. And that will lead to all sorts of differences. You know, the cost won't be comparing to labor costs, you'll be comparing it to inference costs, but the effectiveness will presumably be different. And I think the thing people often miss are second order effects. So just going back to Sierra's business, I think a lot of people think about AI agents
12:04 Speaker 01 for customer experience, and they think call center automation. And that's true. And, you know, if a phone call costs $20 today, and it costs 20 cents with AI, wow, that's a great opportunity to recoup operating expense savings. But imagine you run a big telecommunications company, and your entire business is based on lifetime value. And you have some subscribers who are on a higher tier plan for 10 years, or some subscribers on a lower tier plan for one year. Your business is really a function of customer acquisition costs and attrition. And now all of a sudden, you know, your $20 phone call went to $0.20. Are you just going to recoup those costs? Are you going to think, how many more conversations can I have with my subscribers?
12:47 Speaker 01 And actually increase the size of the plan they're on? Reduce the likelihood that, you know, they see it out on television and switch to another, you know, mobile phone provider? And all of a sudden, you realize, wow, that's a lot more important than the operating expense savings I might have gotten from reducing my BPO costs. And I think it will actually change the market. And so in some ways, you could say, you know, will the first or second order effects be price compression? I actually think it will be much more dramatic than that, which is actually what you do with customer engagement will just shift entirely. And you'll stop thinking of it as a cost center. When the price of a phone call starts to approach the price of a page view, you're going to do a lot more of them.
13:30 Speaker 01 And as a consequence, I think it's just going to really upend the markets. And in particular, I think the way you'll value it is very hard to predict right now. But I think it will go closer towards business outcomes than the cost of the technology.
13:43 Speaker 00 I guess wrapped in that, and I don't mean to ask you to speculate about other businesses because you have a great one that you're running here today. But there is this analogy that I've sort of flipped back and forth in my mind a little bit, which is internet versus mobile of what is AI as an opportunity set? Does the outcome set look more like the internet in that the value captured by big independent standalone companies is larger than that of existing businesses that have leveraged the technology in some way, shape or form?
14:26 Speaker 00 Versus mobile, I think we could probably both agree that the biggest beneficiaries of mobile were probably Google with Android, Apple with the App Store, Facebook. Probably most of the value that was created was probably in some type of incumbents in some way. And I guess as you think about where there might be net new opportunities or where vectors of value are going to be created, do you think that?
14:52 Speaker 01 Do you think the same about the internet? That most of the value accrued to Amazon and Google?
14:57 Speaker 00 As opposed to?
15:00 Speaker 01 It's actually, I just haven't done the math on it. I'm not arguing with you, actually.
15:03 Speaker 00 No.
15:03 Speaker 01 It's two of the most valuable companies of all time and, you know, in the top five of the, you know, S and P 500 and all that. But it's so interesting. I remember the book, The Long Tail and all that. But it's, it's created incredible economy. So if you took at the top 100 software companies in the stock market, the top five are, you know, Meta, Google, Amazon, et cetera, Apple, Microsoft. But like the next 40 are like SaaS companies, many of which most people have never heard of unless you're sort of in our business. What is the sum?
15:39 Speaker 00 Of the long tail.
15:40 Speaker 01 Of the long tail. And I look at like incredible businesses like Shopify as an example. And, you know, Shopify is a beneficiary of, of, of that, but they're empowering entrepreneurs.
15:53 Speaker 00 On top of, yeah.
15:54 Speaker 01 I always think of like Patrick at Stripe talking about increasing the GDP of the internet. So I think the long, the internet in particular is an extremely long tail. And I think it's, you know, really changed the economy in dramatic ways and changed distribution mechanics. And, you know, you look at certainly Meta, TikTok wouldn't exist without the internet. And you give credit to the internet or do you prescribe it all there? So I'm happy to answer your question, but just to say, I don't know actually how to think about that because every company is a digital company at this point.
16:26 Speaker 00 Yeah, it's interesting. It's, it's an interesting point. And maybe I need to reframe how I ask the question because I think you might be right that the totality of the value created on top of the platform itself dwarfs that.
16:38 Speaker 01 It may actually. I'd be interested for someone smarter than me to do that analysis. I, I think it does, but I don't know that. It's also hard to define.
16:46 Speaker 00 It's hard to define.
16:47 Speaker 01 Is a bank with 60,000 software engineers a software company or a bank?
16:51 Speaker 00 And the HVAC company that can now reach customers in a more meaningful way that grew from 1 million in revenue to 20 million in revenue. Who do you give credit to for that stuff? That's interesting. But I guess the, the question I had is there's sort of this, I guess the sales force of mobile. Prove to be Salesforce in a lot of ways. It was kind of a continuing, at least within that. And obviously, there's disruption that ended up happening with Uber and taxis, or Airbnb and hotels, or whatever it is. I guess, as you think about those big software players, and you mentioned ServiceNow and SAP, obviously Salesforce in the ecosystem as well.
17:29 Speaker 00 Do you think that the lion's share of those will be the ones that persist? If we picked, I don't know, the 10 industries and who the horizontal, I guess, but like who the application players on there? Do you think the lion's share of those will survive and be the next generation of it akin to mobile? Or do you think we'll look at a lot of disruption? And that new companies are going to be who captures ITSM, or CRM, or ERP, or whatever three-letter acronym?
17:58 Speaker 01 I think there will be disruption. But I don't think any one of those will definitely be disrupted. I actually, I think it's just going to require a lot of execution. I was joking to Toby at Shopify one time that, you know, you find a cynical engineer, like, aren't you just a database in the cloud? And you're like, kind of. Yeah, I mean, it's like, look, I mean, it kind of under sells the decade plus of work I've put into this database with the cloud. Yeah, it kind of is. If you look at software as a service, reductively, it is a database in the cloud with a lot of workflows on top. And what agents will end up doing is those workflows. And so, you know, I haven't done a lot of work on ERP systems.
18:43 Speaker 01 But if you just imagine, you know, the procurement processes and, you know, contracting and all the things that sort of make up it. And then the Ernst & Young auditor using it to, you know, audit your financials for a quarterly earnings report. How much of that will be AI agents? And then what is the value of that platform? When the forums and fields and the web browser aren't used very much anymore? Not nothing. I actually think that ledger, that, you know, the balanced books that you have is actually quite useful. So it's not zero. And then similarly, yeah, could the company who made the forums and fields in the web browser make the agents? Yeah, I could definitely see that. The thing that we've seen just time and time again in technology, though, is,
19:28 Speaker 01 you know, there's all the fancy names for innovator's dilemma, crossing the chasm. I can't remember what they all mean anymore, but you know, effectively, when you're an incumbent, you sort of become addicted to your product and business model. And as a consequence, when there's a big platform shift underneath you, you end up usually with a graveyard of companies who usually for business model reasons couldn't make that transition. Siebel Systems with on-premises software relative to some, a company like Salesforce. You could see the, you know, companies like Microsoft, you know, had fits and starts with the internet and cloud and came out quite strong. And so if you're big enough, you get multiple at bats, you know, with, with these transitions.
20:13 Speaker 01 So my guess is we will have a few stories, you know, maybe, maybe a Satya level story of a company that came out even stronger on the other side of it. And we'll have some stories like Siebel Systems, you know, of, of companies that saw the slow motion car wreck in front of them and couldn't turn the wheel fast enough just because of the natural gravitational forces that, that keep large companies from, from innovating. The thing that I, I feel really grateful to have briefly been, you know, a public company CEO, because you really feel those gravitational forces. You know, it's, investors say they're long-term and every single quarter you go out and you get a report card, you know, on, on your business.
20:58 Speaker 01 And, you know, I have so much admiration for people like Sean Tanue at Adobe who went through that transition from perpetual license software to ratable revenue. It's so much a craft and like true business model transitions. It changes your balance sheet, changes your like accounting. So like all of a sudden you look more or less profitable, even though I always laugh about accounting. It's like, it's like the cash flow is the same, but all these numbers shift around. And then on top of you have to be a great storyteller and bring your employees along with you, your investors along with you, your customers along with you. It's formidable. And so I think a lot of entrepreneurs are like, yeah, we're gonna disrupt the incumbents. And actually, it's sort of funny having sat in that seat for a while.
21:41 Speaker 01 I have a ton of empathy, and I think some great leaders will come out of this. And just like the reputation Satya has for transitioning Microsoft into the Azure Cloud era, but it is absolutely not a foregone conclusion. And in fact, I think for most of these incumbents, the default will be that they will be disruptive. They don't embrace where software is going.
22:02 Speaker 00 You've talked about this in the past, and you kind of alluded to it there, but the business model elements of it seem far harder with all those constituencies. You talk about shareholders and employees and customers and just managing expectations and taking people through all the accounting and deosacresies. It seems like that, in your mind, is even more challenging than the technological elements?
22:27 Speaker 01 Without question, in my mind. Actually, I don't... There are points where technology is really hard. In 1995, it was really hard to make a scalable website. And like the modern practices, I don't think like, you know, things like memcache didn't exist, and you know, just getting databases to scale was a big deal. And I was talking to someone who worked at Oracle when Salesforce was starting, and they were talking about multi-tenancy in a database was like a novel concept. So yeah, I don't want to minimize the technology, but you don't need to be an AI researcher to see, like, making agents that work somewhat effectively will get really easy relatively soon. It's really hard right now, and just technology will improve.
23:13 Speaker 01 So how you actually build a product that's useful for stakeholders, one thing. But then what is the business model? And the reason why it's hard to make a business model shift is just the change management of that. So if you're, any SaaS company in your portfolio probably has the same incentive structure, which is you have your annual recurring revenue and salespeople get incentivized to increase it. And you might have a team that is incentivized to reduce attrition. So you're sort of adding to your annuity and you're trying to keep attrition down. So you don't lose money, value in that annuity. It's kind of how all software as a service companies work. Okay, so now think about it from the perspective of on an individual account. They're paying you, I'll just make it even numbers.
23:58 Speaker 01 They're paying you a million dollars a year. And you have a disruptive new technology that in 10 years will mean they're paying you $10 million. But if you rolled that out that year, it would go down to $200,000. How do you actually do that? If you're a public company, that's really hard just because like all of a sudden, you're going to look like your business is slowing down, even though you're just eating your vegetables for a greater, you know, brighter future. If you're a not unprofitable or not cash flow positive startup, all of a sudden does your burn rate, you know, go way up? If you, let's say, none of those applied, you're a private company that somehow has all those things.
24:40 Speaker 01 All of a sudden to your employees, like, you know, jump ship in the middle because they're betting on the come. And you just look at the transition from like Windows revenue to Azure Active Directory. Each one of those is a ground game at the customer by customer level to sort of transition people into that new world. And it's so easy for, you know, armchair strategists to be like, of course, that's the correct thing to do. And then the question is like, well, if you don't care about the messy middle, yeah, it's totally obvious. But everyone in the world cares about the messy middle. So it requires just incredibly exceptional leadership to go through those transitions. And I think people don't think about it enough.
25:21 Speaker 01 And I just think in part just because the, you know, a lot of folks haven't really operated businesses at scale before. And I've told this story before, but.
25:31 Speaker 01 At Google, our first campus was SGI, Silicon Graphics. And we moved into their campus after they effectively were going out of business. And at Facebook, we moved into Sun Microsystems campus after they were acquired and sort of like summarily shut down by Oracle. And like both of those companies in my relatively short career were successful companies and built campuses. And in my relatively short career at the time, had gone out of business and were, you know, selling their campus for parts. You know, it was just because their technology and business model was once great and they didn't transition to the next one. And that is the default for companies in our industry. And there's just a very small handful of companies that have been able to move to multiple products,
26:15 Speaker 01 change business models, but you can list them on like maybe two hands. And I think it's very important as entrepreneurs, we keep that in mind because if your ambition is to create a company that outlives you, which is certainly my ambition, you have to create a culture that's not like a one trick pony.
26:32 Speaker 00 I've heard you talk about like the three different segments of maybe the AI ecosystem today being foundation models, tools, and then applied AI. One of the questions that I think we have come up, and I'm not just asking diligence questions that are somewhat unanswerable, but I think you're sitting at a unique lens, is where the foundation model's pushing up into different applications, where that's going to be true and where it might be harder to go do. And you look at something like Claude Code, which is kind of saddened between being the foundation model and the actual application itself.
27:16 Speaker 00 I guess where you said you have an interesting purview of both, you have a board seat with OpenAI, and then you also have a company. Is there any way that you you think about that and like where companies can exist as applied AI systems on top of foundation models versus where foundation models are going to capture value?
27:35 Speaker 01 I'll give sort of one framework that I think about the technology evolution, which is in the early days of a new technology, whether it's the smartphone or the web browser, in the early days of the technology adoption cycle, a lot of the value in is making it just work. Like, it's hard to make a website or a database that scales to consumer scale on a website. That was true in 1995. It was true in 1998. In 2025, it's absolutely trivial to make a website. It's absolutely trivial to make a scalable database. You could go on Vercel or whatever and do it in an afternoon. So if you're in the early days of these technology cycles,
28:20 Speaker 01 often startups and incumbents will be selling the vision of what that new platform is, and it works. And that's the value proposition. If that continues to be your value proposition from 1998 through 2025, you're not going to exist as a company because it becomes a commodity, because essentially, the platform matures. And so the entire ecosystem around it matures. I assume that will happen with reasoning agents and action-taking agents and voice agents and all the things that are really, really, really hard today. And so as a consequence, I think, you know, for companies that are building applied AI agents,
29:03 Speaker 01 they need to focus today on making it work because it's one of the main values that the companies provide. But they need to, as you think about, you know, building a product, which is like, what is our value on top of that? And, you know, when I was joking around about is like every SaaS company, just a database in the cloud. Well, there's, it turns out they've created a ton of value on top of that database. No one cares about the fact that the database scales anymore. That's not like a question you have about your SaaS product. Better if you do, it's got bigger problems, right?
29:35 Speaker 01 And I think, so I think what's going on now is I think people are not in a rational way, sort of just literally translating the technology to a domain. And the question I would have if I were doing due diligence for your company is like, what is the product? You know, like, once, once the fact that the technology works is no longer the differentiator, what does it become? And I think some domains will have really obvious answers to that that aren't really about AI. They're more about the, the intersection of the technology with the business application. You know, just like you talked about Ramp, which is where a customer at Sierra and a huge fan and you know, like, I don't care what database they use, like, the value they provide is like facilitated by technology.
30:20 Speaker 01 What I care about is I can bring a corporate credit card for every, every employee at Sierra and it's great. And so I think that's a transition that will happen here. And as you're sort of thinking about, you know, where will a foundation model company move into it? If, if the history doesn't repeat itself, but it rhymes sense, where have infrastructures as a service companies, you know, obviated the need for a software as a service application on top? Very similar because, yeah, and I'd say there's a few rules of thumb there. Is it a developed product? Because developers are working on the infrastructure, so there's like a gravitational pull of the tools around it. And you see that with a lot of developer platforms that there's often alternatives
30:59 Speaker 01 in AWS or Azure that are directly competitive with like, you know, they're similar to usually open source competitors as well. You know, number two, when I mentioned the tools space and my, my personal framework, those are pretty, I think, at risk, you know, of having some of the foundation model companies move into it because like data labeling or, you know, things like that. Maybe not, maybe so, you know, but. If you're actually trying to be a great customer of one of these foundation model providers, it's an adjacency, and so that's a natural expansion. The closer you get to a vertical business that's really an application,
31:43 Speaker 01 it could happen to date, there hasn't really been a company that has sold both horizontal infrastructure and vertical applications that succeeded. And I don't think it's just technology. I don't, no offense to any of the SaaS companies I mentioned, but it's not like the great engineering teams that, you know, Amazon or Azure couldn't build those. I'm sure they could, but it's a, it's very different. You have a different product management culture. You're selling to different buyers. You have a different business model. And as a consequence, the sum of the thousand reasons why, you know, selling a solution is different than selling a piece of infrastructure sort of create two different companies effectively. And I, there can't be one company that does everything.
32:26 Speaker 01 There's just different cultures produce different products and platforms. And I don't, I don't personally see that changing in the age of AI.
32:34 Speaker 00 You implicitly touched on something that we've seen a lot of. And I've, I've talked to people, your former coworker, Mark Benioff, about this as well, but it's, it's interesting where we've seen this culture of, I guess the nomenclature is forward deployed engineering, pop up more and more, which is a Palantir-ism that I think doesn't mean what it meant at Palantir, at least how people use it today. I guess I'm curious just to get your perspective on that. Cause I think it probably ties into your, the point on you're really selling the ability to stitch these things together initially. And there's probably some element of human service around that today, but maybe not forever.
33:19 Speaker 00 And I'm curious your perspective.
33:21 Speaker 01 Yeah, I'll give my broad take on why I think it's trendy right now. And then I'm, I'll talk about Siri specifically. So yeah, I think the, the change management of adopting AI is fairly formidable. If you have an agent that takes action against, you know, 20 or 30 systems. There's both the systems integrations complexity of that, but there's also just the change management of who was doing that before. How do you put guardrails around it? All these other things. And over time, I think all of this will and much of it is sort of productized today. But in the meantime, you know, one of the main ways an AI project fails is like adoption or deployment.
34:03 Speaker 01 And so I think a lot of companies, younger AI companies in particular, found there's a strong correlation between being more hands-on or high-touch and driving outcomes for customers, which is solve some of that adoption gap. So here we have a model that's quite flexible. So we have a no-code product for, I'll say, customer experience teams, like operations teams. So you can build an agent without knowing any technology. We have a platform as a service for building agents called our Agent SDK that engineering teams like Ramp use to build AI functionality. And then we have an optional agent development team that can help handhold you through that process.
34:45 Speaker 01 And it's really there so that we can show up not just with a product, but actually show up and make you successful with it. And it is, as you said, not really the Palantir model per se. It's just our way of saying, we're going to accommodate the way you want to use this technology. Maybe it's your operations team, maybe it's your engineering team. Maybe you don't know how to adopt it, and we're going to make you successful no matter what. One of the things I was really proud of when we announced our financing today is over half of our customers have over a billion in revenue and over 20% have over 10 billion in revenue, which is unusual for a company of our age. And I think it's because we're approaching companies in many of the most regulated industries
35:29 Speaker 01 that have a ton of constraints. And We'll have conversations about are AI-based guardrails enough? Do you need deterministic guardrails? How do you deal with, you know, compliance? How do you deal with auditing? And there's a lot of product in there, but a lot of it is integrating into your, like, how do those controls work today? You know, how can we help you with that change management as you're changing your BPO strategy because you're adopting this technology? And so for us, it's really trying to be not just a vendor, but a partner. And it's really there to drive outcomes and ensure that this isn't AI tourism, but these agents are actually going live and driving business value quickly. I don't know where it will go as an industry.
36:13 Speaker 01 I actually, I think, you know, I don't know the Palantir folks really well. We have a few of their alumni on the team though, but I think it's great for them for starting a trend. You know, I, it was interesting, we moved into the old HP building once at Facebook, and they were famous for creating the first, like, open office floor plan. I think they had cubes, so it was not, could not quite as open office. And, you know, I, what Marissa did at Google with the Associate Product Manager program has been replicated, I think, you know, credit to Alex and Palantir team for whether or not it's exactly the same role. I love these, the kind of like exploration of these different delivery organizational models in Silicon Valley, and I think, I think we'll benefit from it. I think we'll learn a lot from it.
36:56 Speaker 01 No company wants to be a professional services firm, so I don't, there's a caricature of what that becomes that is not great, but I like the accountability that it implies.
37:06 Speaker 00 Yeah, and it allows meeting customers where they are in their journey, which I'm sure is particularly important as you sell to, you know, larger organizations in some ways. They're just going to have different constituencies that are more mature, more willing to dive headfirst versus want more scaffolding or guardrails around it. It's an interesting thing because like, we were early investors in Snowflake, and one of the things I think they did best was like, dogmatically picking where the future was headed and just being a purist about, no, we're, we're the cloud, we're working in the cloud, this is what we're going to do. No, we're not going to do on-prem for you, all of that, and projecting the customers. That didn't want to meet them on the path of inevitability that they saw coming.
37:46 Speaker 00 And it's interesting where you want to bring these customers along and meet in the journey, which I think is super important at this moment in time. And we've seen it across different industries as well. But I guess every market is going to be a little bit different and every company is going to execute in a different way.
38:02 Speaker 01 Well, there's a few kind of like meta points that I think are really interesting to think about, which is another number I wish I had, but in the enterprise software market, what percentage annually is spent on software licensing versus implementation?
38:20 Speaker 00 I think it's like 3X implementation or something.
38:22 Speaker 01 I think that's probably right. And some of it is just bad decision making, too much customization. And I've talked to a lot of very sophisticated CIOs who are aware of that. And you kind of want more out of the box, so your total cost of ownership is lower.
38:39 Speaker 01 But it's interesting too, because you have software engineering agents now, which will presumably reduce the marginal cost of implementation. You have an entire ecosystem of companies built around, some are very high end consulting, some are more, you know, road implementation and there's sort of a spectrum of systems integrators there. And then you have software companies now with this sort of forward deployed motion. But you combine that all with AI agents as well. And does the cost of implementation go down? I think probably. And then who the people who do it might shift a little bit. It's not totally obvious how that will play out. But then on top of that, you combine that with outcomes based pricing.
39:23 Speaker 01 And the elephant in the room with outcomes based pricing is if it doesn't get implemented well, you don't get paid. So you have to have a more accountable, you know, model to facilitate that business model. I think all of that, we have a really great set of partners in the systems integrator community. But it's, I think it's a conversation with them and us just of moving towards more accountability. And, and I think, and I'm hopeful for companies around the world, the cost of actually deploying this technology should go down a lot. And it's something we, we try to manufacture that just because I think it's really important that companies don't have huge upfront costs to find value in AI. But there's a lot of variables that are shifting at the same time. And I just have to imagine if you and I are sitting here 10 years from now and I ask that same question.
40:09 Speaker 01 I imagine the answer will be different.
40:11 Speaker 00 Yeah.
40:11 Speaker 01 I don't know, but I imagine the answer will be different.
40:14 Speaker 00 Well, and the same thing happened, I guess it's not entirely novel, when we were shifting from TCO upfront licenses and like there, I remember
40:23 Speaker 01 100%.
40:24 Speaker 00 Early in my career, there were like, you know, cloud systems integrators, right? I don't know if you remember these names, or like Cloud Sherpas and Aperio and like all these, they were like cloud system integrators. And you know what happened is like everyone had to become a cloud system integrator in some way. They had to figure out, hey, well, if it was, you know, to use the reverse of your analogy, if it was $10 million over time, or if it was $10 million upfront, instead of whatever, over an extended period of time, you had to figure out how to make that math work, or
40:54 Speaker 01 Yeah.
40:54 Speaker 00 the customer wasn't going to pay for it. I guess it brings up another thing that, and now I'm not even going through the questions, I'm just sort of asking unanswerable things in some ways. But one of the things that I've thought about is, we have this democratizing force that's happening in software development, which enables a lot of organizations to develop their own bespoke solutions in a much lighter lift way than ever's been possible in the past. I'm sure you've had customers that, you know, tried to DIY, or maybe they still are, and your solution's obviously a little bit harder than building, I don't know, like a, like an HR bot or something that's like calling payroll data or something like that, making
41:39 Speaker 00 up a stupid example. And then on the other side of that, you have democratizing software development that will allow people to commercialize applications a more meaningful way. And at the end of the day, like, are we going to see more net software sold into organizations because it's democratized and people are going to be able to specialize in, hey, I'm the, you know, the SMB, ITSM for the HVAC industry, whatever, making up a stupid example there. And you can build that company and try to reach those customers and have all the ontologies and all those things kind of built out.
42:22 Speaker 00 And so, we might have more software vendors get created and sold into the enterprise, even though the example I gave was SMB. Or do you think? There's just some limiting force on how many solutions people can buy and you just don't want to have 5,000 different commercial vendors within your organization.
42:41 Speaker 01 Yeah, it's a wonderful question. I think two trends are happening, or maybe it's more than two trends are happening at the same time. First, the whole economy has been digitizing for the past 25 years and I think the emergence of AI will just increase the pace of that evolution because as I mentioned before, it's digitizing professions that weren't really digital before, like the paralegal profession. And then that will increase demand for software. Similarly, though, we've had, since I've been alive, a shortage of software developers and now you have software engineering agents. And at some point, presumably, we will actually, as these agents become more productive, presumably
43:24 Speaker 01 we'll figure out what the limit of how many software engineers we need are. We've never experienced it. I don't know what the answer is, just because we don't know what the actual demand for software is. And then, as you said, you have the kind of disruption of the software industry, which is what is a software company. And my intuition is you have the infrastructure providers, as I said, selling the intelligence. And then my intuition is that the software as a service companies who made apps before will be companies that make agents tomorrow and they have purpose-built agents. Companies might have five agents around a particular line of business or industry. That's my hypothesis. I think that most companies will want to
44:07 Speaker 01 purchase agents from companies, like from software companies, rather than DIY. I think the reason for that is that even with the advancements in software engineering, if you build software, you own it and you have to maintain it. And software is like a lawn, like it just can't sit statically and actually continue to do its job. I'll just take the ERP example. You know, let's say there's a new accounting standard that comes out, like one came out in software, what, seven years ago?
44:35 Speaker 00 Six or six.
44:36 Speaker 01 I can't remember anymore. Six or seven. Yeah, six or six.
44:39 Speaker 01 You know, you're the whole idea, the whole, the economics of the software industry is like, everyone needs that new accounting standard, not just you. And, you know, a software company can sort of amortize the complexity of rolling that out. And then on top of that, if you're reporting your earnings, like, how do you know it's correct? And like, you're also, you know, sort of essentially outsourcing the correctness and the accountability for that correctness to a firm. And that seems quite rational to me because I don't think like it's the, the idea of it, you know, was never that complicated, but just the, the incentives of having sort of the amortized costs of innovation, you know, just continues to make sense to me. Because even if you could ask an AI to write it, how do you know it's right?
45:23 Speaker 01 And you start to like pull that thread, it just seems like a company should do that. That's my.
45:27 Speaker 00 There's some comfort in having the edge cases spread out across a bunch of different vendors and expertise built in.
45:34 Speaker 01 And don't you feel secure, like when you buy a new product, that like, you know, who else uses it? And you're like, I trust their judgment too. And that, that dynamic is real. And, you know, I, I, so that's why my strong intuition is will continue. It is really interesting though, to just to know, like, what is the shape of our industry? I've thought a lot about this and actually I've talked about it a lot just because I identify as a computer programmer, you know, I really do. And it's just really interesting to see your own profession so upended by a piece of technology. Is we migrate from being authors of software to operators of code generating machines? How many machine operators do you need or want? What are the tools that they need? How satisfying is that job?
46:19 Speaker 01 My intuition is it will be actually more fun and more satisfying. Like, I just love adding leverage, you know, to, to my own life, you know? And to be able to symphony, conduct a bunch of software engineers. I talked to so many people at the office who like on, before they head into work, kick off an agent and then come in to look at the full request. It's pretty cool. I mean, it's really neat. I don't know how it'll play out in the industry, though, but I believe that there will be agent companies. I believe they'll be delivering a ton of value. And in fact, I think perhaps a lot more value because they're actually accomplishing tasks as opposed to amorphous productivity enhancements. And you talk about enterprise software. Anyone who's been in the industry long enough had had to do a presentation about ROI.
47:03 Speaker 01 And it's always the same, I don't say nonsense, but you have ex-salespeople and they'll get why I'm more productive and you should pay us. We're only asking for half of that value. And everyone in the room is skeptical. And now you have these agents actually autonomously performing tasks. I think it's both extremely valuable and I think it's extremely valuable as a company.
47:28 Speaker 00 Yeah, it's interesting, that orchestrating thing. It may, the answer that I think I would probably land on, which has gotten people in trouble when they've sort of said out loud, is like it might be far more fun to fewer people. There just might be less people inherently orchestrating the multi-agents in some way. But we don't know.
47:51 Speaker 01 You know, maybe, but we don't know how much demand there is for software.
47:54 Speaker 00 That's right.
47:55 Speaker 01 We've never experienced, we've never satisfied it. So I don't know. And going back to my easier analogy about reducing the cost of a customer phone call from $20 to $0.20 to point $0.20. It just changes the dynamic. Imagine if a page view of a website cost $20. The web would be really different. You just wouldn't have, you wouldn't have blogs. It would just be a very different world. Now that, you know, there's no, no one thinks about the marginal cost of a page view. I'm sure there is a cost, right? You add it up, but so marginal, you don't think about it. It's just going to change. The second and third order effects are huge. And so.
48:36 Speaker 01 You know, as you think about scaling up a software company, you want to grow, right? And so the only reason you'd have fewer people is if it didn't contribute to your growth. And it's not obvious to me that like just less is always better. The question is like, do you saturate your market with fewer people? And I just think that the saturation of like, how much innovation can this market absorb? Like, we've never experienced that. And now we might have the opportunity to, but the idea that it's strictly less people, I'm like, maybe. But is there is a smart, is the next, you know, Google, the one that says like, I want just as many software machine operators as I had programmers before. And I'm just going to produce something that's like worth trillions in value as a consequence. I don't know. I don't know what the answer is.
49:19 Speaker 00 I feel like we're nerding out about enterprise software. But one of the, you were, you were the co-CEO of maybe the biggest, probably the biggest standalone application software.
49:30 Speaker 01 Pure play.
49:30 Speaker 00 Pure play company out there. From a consumption of software standpoint, if I think about my own behavior, I've shifted to definitely visiting far fewer websites because I just ask Claude or.
49:46 Speaker 01 I think you mean ChatGPT.
49:47 Speaker 00 Yeah, you know, you can dub, I'll do Harvey, you can do. I can ask ChatGPT what, what question I have. And I don't go to the websites. I don't go to Wikipedia to look up, you know, Bret Taylor's history of, of work or whatever it is in the same way that I did in the past. Do you think that it's an inevitability that enterprise software consumption moves in that direction? Where we have some central portal, ChatGPT, that we're asking the questions of, of Salesforce or Snowflake or Workday or, or ServiceNow? And that we're no longer going to the, to the domains in the same way that we have in the past?
50:31 Speaker 01 Probably. I mean, I think that you end up with this. I think, actually, I think just speaking from a consumer perspective first, I think sort of consumer leads enterprise in a lot of ways. You'll you'll end up having agents or agent, you know, who helps you digest and synthesize information, help you take action. When I planned like our vacation this summer, I used ChatGPT exclusively and it was amazing. And I'm sure there was 20 websites I didn't visit that I could have. But I also visited some and I ended up finding the actual, you know, Airbnbs we stayed in through through the service. So it didn't take away traffic from, you know, the Airbnb sites, but a lot of the like,
51:14 Speaker 01 maybe the the the travel recommendations. The content. And others that I didn't. So I think there'll be winners and losers in that. But then, as you look at enterprise software, I always like to think about it as jobs to be done. Like, what is the job you hire this piece of software to do? And, you know, if you took it like my my alma mater, you know, CRM software, it manages leads, opportunities and, you know, manages your sales pipeline. And there's still going to be salespeople and they still need to sell. They need to be accountable. They need to get paid. But it's going to be a ton of value and, you know, those jobs to be done. How you do them is will probably change dramatically. And as much as I love Salesforce, people don't, you know, a good salesperson doesn't want to stare at that screen all day. They want to go sell, right?
51:58 Speaker 01 And so, you know, I think the future of that industry will hopefully be more delightful for the people using it. And but I think it will really change the shape of it. One interesting point about what you and I just said about ChatGPT that I think is interesting, though, is kind of the aggregators, like the Ben Thompson sort of theory of the consumer internet is really interesting here because you sort of look at the internet and you have demand generation, which is like social media and the ad platforms associated with them, and you have demand fulfillment, which is web search and pay-per-click ads and AdWords and things like that. So much of that with sort of ChatGPT specifically, actually, is really changing.
52:43 Speaker 01 And so. You know, if you look at the sort of direct consumer retail market, the relationship between Shopify and Instagram and TikTok and all that, it's quite nuanced. And I think you're just going to see like a real big shift in consumer behavior, which will have a ton of downstream effects. And, you know, just like people spend a lot of time thinking about search engine optimization and, you know, people who are dependent on the App Store for distribution have spent a lot of time thinking about that. Some are really happy with it, some are very upset about it. We are entering a new world where these agents will mediate the consumer experience for a lot of different brands. And I think
53:23 Speaker 01 it will, people are still working through the implications of that. I was talking to someone who works in the telecommunications industry about all the work they do for offers, you know, like to incentivize you to, you know, switch, you know, cable or mobile phone plans. And if it's consumer agents, do the offers go away? Does everything, you know, revert to the lowest price plan? You know, the, in the travel industry, as I was describing my vacation, like what businesses win from that, what lose? If you are an aggregator of sorts and you've been focused on Google, how do you, how do you translate that business to ChatGPT? And my guess is, just like there's an ecosystem of like companies built around
54:05 Speaker 01 helping people with, you know, purchase ads effectively, search engine optimization, there's this whole world that hasn't yet been created around that. But I also think it'll really, you know, change the economy because so much starts with the consumer behavior and trickles down from there. And I think we're in the very early innings of that, that behavior change.
54:23 Speaker 00 Yeah, it's, it's interesting to see at a personal level, like the personalization that exists in terms of the content I receive has just gotten so, so good. And it could be outbound emails, feels like a very simple thing. But at some point, there's a saturation, the number of hyper personalized outbound emails I get, there's just like a saturation point that I ultimately.
54:45 Speaker 01 And what's the saturation point for your personal agent?
54:48 Speaker 00 Yeah, exactly. It's infinite, right? I guess it's an interesting question. What do you think, like you and Clay have a bet about at what point, like agent to agent will out, be, be more than 50% of human to agent? I guess, can you maybe outline that for people? And then what do you think like the implications of that, of that are?
55:07 Speaker 01 Yeah, so Clay and I have a lot of bets. Clay has won every single one of our bets so far.
55:12 Speaker 00 Is he like a, has he been more of the maximalist?
55:14 Speaker 01 He has been the more maximalist optimist and I don't know if I'm just, I like to think of myself as an optimist, but in this case, he's taken the upside.
55:22 Speaker 00 Someone has to be more.
55:23 Speaker 01 Someone has to be more and he's been right every time. So I think he's going to win this one too. You know, all of our agents have a brand at the top and they power companies' customer experiences. So ADT has an agent you can talk to over the phone or over chat and DirecTV and SiriusXM. And, you know, most of those conversations today are people talking to the agent. And we had imagined a world where, you know, some combination of OpenAI and Google and Apple, and you'll have a personal agent that will, you'll send out a task who might, for example, go change your SiriusXM plan because you want a different type of content.
56:05 Speaker 01 We have a bet of when the line will cross where the majority of the conversations will switch over from people to other AI agents. I, I think this probably will happen. I think that the experience you were talking about with Claude and ChatGPT, I think, is real. And I think, you know, it feels like Maslow's hierarchy of needs of those experiences are first, you know, think, second, go out on the internet and do research on my behalf. And then after that, take action on my behalf. I'm not quite to the level where I would give it my credit card and ask it to go book a trip, but it doesn't feel like that's a decade from now. That feels way sooner, I think. And I don't think I'm that overly optimistic on that front.
56:50 Speaker 01 And when you do, or, you know, do these services sort of become headless in some ways? Like where they're, they're there to, if the majority of your interactions with your customers are via their agents, it just upends the, the. How you think about everything from user interface design to what your business model is. And I'm not smart enough to predict the second order effects. I like it's, I think it's easy to imagine that world if you just took the current world and projected into that future, but that's not what's going to happen. It's going to be gradual and it will really change, you know, the business model for a lot of consumer companies. One of the main values we hope to provide at Sierra is helping future proof our customers for that.
57:34 Speaker 01 Their agents are compatible with people that are compatible with other agents. They can be embedded in their mobile app. They can be used via WhatsApp. You know, if smart speakers make a comeback, you can publish your agent to those smart speakers. I think that's really important right now. I think we really want to be a trusted AI advisor to each of our customers. And I think it's so complex to predict where the future is going, but step one is make your customer experience available in that new world. Then you can decide, you know, what is it that the search engine optimization that world? I don't know. But the last thing you want is to, you know, not have your, not be able to conduct commerce and gain new customers in that new world. And that's one of the longer term value propositions that we provide.
58:19 Speaker 00 You've touched on elements of this, I guess, in how you've described Sierra, but I think you've, you've used customer experience more than support, more than sales and any of that. I guess, where are we on that, the journey? And I realize every customer is going to be slightly different, but, and the lines probably blend a little bit between what's doing support versus what's doing sales. But are you seeing more and more people are letting it shift from being the, the support resolution thing to starting to have some more sales oriented conversations? Where are we on that journey?
58:55 Speaker 01 Absolutely. Mostly without exception, our customers want to handle inbound customer support, but want their agent to be the front door for their customer experience. One of our earliest deployments was for a shoe company and the very first session was, I'm going to a wedding in Hawaii. What sandals will go with my bridesmaid dress? Which is not a customer support. Query, it's a very much a product discovery, a considered purchase. It turns out that, you know, when you have a free form AI agent with a brand at the top, you talk to it. And sometimes you might have a traditional customer service question, but a lot of the
59:37 Speaker 01 time you're just talking to it the way you would talk to like the, an associate who worked for that company. And it's really hard to segment your AI agent, you know, if you, there's not, it's not always obvious what the customer's intent is. So the pattern that we've seen for a lot of our customers is they may come to us for one problem or that where they want a solution. And then quickly the thread sort of gets pulled to be a broader sense of the customer experience. And I think it's really exciting. I actually, we really believe that every company's AI agent will be as important as their website or their mobile app, that it will come to encompass all of that functionality. And if you think about a company's website, you can buy things, you can learn about their
1:00:22 Speaker 01 history, you can learn with the executive team, it's a public company, there's probably a investor relations section. I think your AI agent will do all of that because at some point you'll ask like, why not? Why can't I ask the, you know, whatever ADT agent, anything I want to about their storied 150 year old history? I should be able to. And that's, that's quite exciting in my mind. And so, you know, we're, if we're successful in achieving our mission, when you encounter a company's branded AI agent in the wild, we'd like to be powered by our platform and we'd like it to be personalized to you, to know your historical interactions with that brand, to really be like a concierge type experience, to be able to take action on anything you want to take action on.
1:01:06 Speaker 01 And when you have that experience for you to feel like, wow, this company gets me, you know? And that's something that I think you can do at scale with AI, not that you just could not do before.
1:01:14 Speaker 00 As we, as we wrap, one of the things you said earlier that I would love your perspective on is identifying as a software developer at your core. And I think if someone had asked me, Five years ago, maybe three years ago, like what field felt that they should go into? Or what should they study in college?
1:01:38 Speaker 01 Yeah.
1:01:39 Speaker 00 I would be like, well, I mean, I don't know. This seems like the biggest scarcity we have in society today, and the value of it only goes up. And now, if that person came back to me, this is a fictional person. I don't think I actually had this conversation. I'd be like, ah, my bad. Uh, no, I was a little off there. I, but I still think, I mean, to your point, like the abstraction of managing multiple agents and all that stuff very well could exist. I guess as, as maybe you counsel young people, and I have a lot of younger listeners, to think about their career in some ways. And like, what pockets of society and professionalism are going to persist?
1:02:20 Speaker 00 This next industrial revolution that we're going to go through in turbo speed instead of 100 years, we're going to go through in 10 or something? I don't know what the, what the right time horizon is, obviously. But is there any advice that, that you give or you think about for people that are kind of trying to navigate their way through an uncertain future?
1:02:39 Speaker 01 It's probably the number one question I get from people outside of our industry, just because it is, it's so hard to know what jobs will sort of endure. First, I'll say, I think lots of jobs will endure. I, you know, we create an economy around the technology we produce, not the other way around. And so we've gone through the agrarian revolution, the industrial revolution. We've gone through globalization and it really shifted our economy a lot. All of those, if you just look at the percentage of people who are farmers or worked in factories who now are sort of a services economy. So the idea that the jobs are all going away, just that doesn't make any sense to me.
1:03:14 Speaker 00 We find new things.
1:03:14 Speaker 01 Yeah, we'll do new things.
1:03:15 Speaker 00 Can you imagine going back to a farmer, you know, that worked every day, 15 hours a day to produce food? And it's like, no, this podcasting thing, actually, like, let us tell us in 100 years.
1:03:24 Speaker 01 And by the way, no one thinks about acquiring food anymore. That's just like, and just turning on a light switch.
1:03:29 Speaker 00 Yeah.
1:03:29 Speaker 01 It's just like, mind blowing. So. That I am not personally worried about.
1:03:35 Speaker 00 But that's at a societal level, not an individual.
1:03:37 Speaker 01 Individual level. I mean, I just think that your
1:03:43 Speaker 01 jobs will probably change less regularly, like vocations, like the way we do things, I think will change dramatically. I think it's really important to understand like the value your department provides. I've used the analogy before of accounting before and after Microsoft Excel. Your job wasn't to add up numbers. You did that with your HP calculator and, you know, actual physical spreadsheets before. And then when Microsoft Excel came out, the arithmetic of accounting became a commodity. And, you know, you end up with higher leverage things like pivot tables and fewer people doing more things.
1:04:21 Speaker 00 That's what I think about investment banking, like bankers in the 80s worked 100 hours a week and bankers today work 100 hours a week.
1:04:27 Speaker 01 Exactly. But they're doing a lot more and their models are more sophisticated. It's very different things. So what I like to think about and I, you know, if you were that accountant before and after Excel, are you the one who learned pivot tables first? And taught your colleagues at work and your boss said, wow, that person's like a go getter. They learned this amazing new thing that made them a lot more productive. And if you're a software engineer, that means are you using, you know, Codex and Claude code on the weekends and like leaning into the tools? That would be the advice I would give, which is this is for the people who adopt it, they'll be 10 or 100x more productive than their peers.
1:05:08 Speaker 01 And if you lean into using the tools and they'll change a lot, like the difference between cursor one years ago and Codex and Claude code today is stark, right? So we're talking on a monthly basis, these tools are changing. And if you do, I think you can create a career around them. And I'm not sure what it will be. You know, it might be something that's obvious in your career or my, you know, it might be something that's counterintuitive. But I think that it's for younger people in particular, like this is a new superpower, a super intelligent. That you have access to make it a part of your daily life and be the one who pulls it into your profession and into your career. And then whatever happens to your profession, you're going to be on the bleeding edge of it.
1:05:52 Speaker 01 You know, are you the first company to put up a website? Are you the first accountant to use Excel? Are you the first software engineer who's got coding agents working for yourself, you know, and producing your outcome? And if you're in that position, I think you're in a really both it's a mindset and a kind of a safeguard for your career. On the what to study, I still am a big believer in computer science. I think, you know, the one of the criticisms of some computer science departments is they've been not, you know, too theoretical. You know, if you think about complexity theory and, you know, how, how, how algorithms work and distributed systems.
1:06:31 Speaker 01 I think a lot of that will really benefit you. It's hard to tell an AI agent what to do if you don't have the context on what it's doing. It's very easy to make really significant mistakes. So I think it's probably more important than ever to understand the fundamentals. And the other thing, though, I just like maybe in a parting thought. I wonder, and I to some degree, hope that this will benefit generalists. I think Patrick's written a lot about this in the context of science, but the world has gone towards more specialization as just the world has become more complex. And as a consequence, you know, someone with like a great app idea who wasn't a great programmer had to depend on a lot of different people to make it.
1:07:12 Speaker 01 And put another way, you could have great taste, but if you didn't actually have the tools of the craft to act on that taste, the world might not benefit from it. I always think of like Christopher Nolan at 22 or whatever, you know, he made Memento, but he couldn't have made Interstellar. Like there's just, you just need too much money to make a movie like that. Will the next Christopher Nolan be able to act on his creative vision without societal permission? Because the cost of doing so is so much easier. You don't need to be a visual effects expert. You can just be a person with a great artistic vision. So one of the things I really hope that's a little adjacent to career advice is, you know, generalists. You understand a pretty broad range of things fairly well.
1:07:55 Speaker 01 We'll be able to leverage AI and this technology to produce exceptional things. And I think that's really good for society. I think the move towards narrow specialization. Most great breakthroughs in science and technology and products and art have been like the cross product and intersection of a lot of different domains of expertise.
1:08:16 Speaker 00 Brett, thank you for doing this.
1:08:17 Speaker 01 My pleasure.
Previous EP 149: Marc Benioff (CEO, Salesforce) Predicts Half of Conversations Will be With AI Agents Next Year Page updated October 26, 2026 · transcript and summary are machine-generated
