00:15:12 · Matthew Fitzpatrick
[00:15:12] S0: I... Well, one thing I'll say is I think it will be uneven in its in its proliferation. So I think you will see certain areas of society that will proliferate much faster. You know? I think I think contact centers, for example, is one that it might... It's definitely not there yet, and there's been a fair amount of bumpiness, but I could see that making huge inroads the next couple of years. I think media is another one where, you know, everything video creation, I think you're gonna see really rapid adoption of of that as an example. I think there are other areas like financial services that will that will definitely take longer. Particularly, any regulated industry is gonna take longer. And I I think the... And I think, by the that's different than the Internet because the Internet is a broad based technology. It's a network. In in many of these cases, it... Like, you could be super advanced, and I could not be advanced at all, and that we could both be using the same technology. So the adoption paradigm here is more individual to individual institutions, individual companies, individual sectors. And so that means, I think, in some cases, it will advance faster, the Internet business presence. In some case, will advance slower. But I do think it's going to take longer than people expect even though it is... Even though you see hyperadoption in the... At the individual level. Like, there... There's a study I really like by the NBER, like National Bureau of Economics, and they basically look at individual productivity use cases versus company level. And it's like the average... They look at, like, 60,000 employees or something like that. And the average individual improves in productivity, like, 15 to 20. But the average company improves in productivity, I think, is, like, one to 3%. And I think that is really the paradigm right now is, like, people using all these tools, and they're helpful, but they don't really redesign the way the work is done. And I do think that takes time. Like, there's an analogy that, like, the automobile took forty years for mass adoption, and it actually took the redesigning of the factory to get that. Like, you actually had to redesign factories around the assembly line to bring costs down the automobile to use them.
00:17:15 · Matthew Fitzpatrick
And I think there's a similar analogy here, which is we're not really changing the nature of the work in the factory. We're just having everyone use the tools, and I think that will take time to play through. So we're five years into the journey now. Everyone is using a lot of the technology, but I think the nature of work will take another... You know? We're we're still, I think, five to ten years away from material, like, than the amount of use cases being shaped. I will say, though, this is where digitally native companies are different than enterprise. And I I think that's... If you are a company founded in the last ten years, you... Or, sorry, last two years, anchored around all the cool... All the digitally native kind of tooling, coding apps, etcetera. I think the acceleration of those businesses has been vertical. I think it's very different if you were a ten year or twenty or thirty year old company reengineering yourself around that tech. And I I I think that's... That is a much harder thing to do, and that's most of the scaled companies in the world.
00:18:13 · Guillaume Moubeche
[00:18:13] S1: So do you feel like to build up on what you were saying with, you know, the the initial prediction of having the the existing blockbuster of the world, like, take all the market share. We can compare this to some of the existing giants today. Do you feel like the fact that they have distribution, if you take Google, for example, even though Google is working, you know, like on AI and they're shipping a lot of things, I think they've been a bit more quiet compared to like what OpenAI and Anthropic, etcetera have done. Do you think they still have a chance like to to get like tons of market share or do you feel like it's a lot harder per your points because they haven't been built as AI company first?
00:18:59 · Matthew Fitzpatrick, Guillaume Moubeche
[00:18:59] S0: Oh, I think they absolutely were built as an AI company. I think they're the original and perhaps, you know, greatest AI company anyway. So I... What I'll... Without coming on the tech landscape, because I think that's a I think that's a different dynamic. That's a bunch of companies all investing heavily in tech. I think what I meant by that comment is more to take, like... Let's take banking, for example. Like, you're... If you take all the neobanks like a Revolut, I think the question is the adoption rate of AI in a business like that versus traditional banks, how does that change the paradigm? And I think you can extrapolate that to almost every sector, which is for companies that become hyper adopters of AI, their product theory should increase materially. And so how many new businesses like that do you see that spring up by sector? And contact center is another good example that we've already seen some new entries grow incredibly quickly. [00:19:50] S1: Okay. And you were mentioning, I think, that the the SaaS playbook is kind of like dead. So how exactly do you think it's gonna it's gonna evolve from where it is right now?
00:20:02 · Matthew Fitzpatrick
[00:20:02] S0: Yeah. Let me clarify that, Kyle. So so I think the repricing in SaaS companies is not... What the market, I don't think at least, is is not assuming that they will all decline in revenue. Like, they're not assuming something even gets ripped out. I mean, I think the rough multiples on SaaS was... In 2021, SaaS... The average public SaaS mobile was, like, 20 x revenue. Recently, it's been on the order of 10 x. Right? And maybe... So in many cases, 15 x revenue. And so what... The repricing I think you've seen is a view that they should be trading, you know, much lower than that as a multiple because in the future, their growth will be slower and the terminal value will be less. And so the repricing is not a view that they're gonna contract. It's just a view that they will grow less slowly because of a competition from AI companies, and as a result of that, pricing competition as well. And and I think that is a fair assumption in many ways. Like, I think that the way that people buy software and technology is gonna change. Like, I think in the last ten years, you kind of... Simplistically, the way you bought software was you bought a box, whatever that box is. So, like, you bought something that did, like, an InsurTech that did claims, for example. And then you have an SI come in and customize that thing incredibly for exactly what you needed. And so what you ended up with after, you know, two years of customizations was like a kind of an ill fitting thing that sort of fit what you needed, but was probably very different than the core box that you started with. And that's that's been why I think enterprise software has been so frustrating for so many is that a lot of the tech was really not fit for purpose. And now with AI, I think the question a lot of folks are asking is, rather than doing it that way, shall I take, you know, a variety of different tools that now exist to me and build something or use something that is pretty customized exactly what I want? And I do think that will be a change. I think that'll be a direction a lot of folks will go in. That's kind of effectively what Invisible does. We use a series of foundational infrastructure to deliver hyper personalized software. And I do think that's a much better user experience than buying a box that is kind of ineffectively customized.
00:22:12 · Guillaume Moubeche
[00:22:12] S1: Makes a lot of sense. And do do you feel like... Because you you touched a little bit on this about the fact that usage was gonna change, and I feel right now when I look at most AI software, they... I mean, a lot of people are talking about AI agent and things like that, but actually it's more or less the same capabilities, you know, as a a normal software or a workflow that you can do. In some cases, they add intelligence, but in most cases, it's like what I would call, like, just custom software or, like, just normal software. So in in what way do you think interfaces are gonna change to kind of, like, match the new needs of consumers or enterprise?