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​The 3 Attributes of an Attractive Market for AI​

Call it Service-as-a-Software. Call it AI agents or agentic systems. There’s a brewing idea that AI will complete human labor especially in white-collar work. What attributes of a market make it attractive to pursue? Those with three attributes :

Toil, labor market shortages, and margin pressure.

Toil is repetitive work : reviewing alerts, triaging leads, data entry. Necessary but not strategic.

Jobs laden with toil tend to be difficult to recruit for & retain. Turnover rates of 30-50% are common in these roles.

Labor market shortages are a result of a mismatch between the supply of labor and the demand for it. Perhaps not enough graduates in a particular discipline. For example, accounting graduates have fallen approximately 18% since 2016. or too few applicants for a particular role like customer support.

Whatever the reason, the challenge is the same facing a hiring manager : difficult recruitment to maintain or grow headcount.

Last, margin pressure. Wobbles in the economy are impacting the labor market. Unemployment is now at 4.3% & new job creation has fallen in half compared to the last 12 months employers will need to do more with less.

Recent earnings reports from publicly traded companies that use AI continue to underscore the significant cost savings when AI is deployed successfully.

Last week, Amazon reported the impact of its AI system called Q : “With Q’s code transformation capabilities, Amazon has migrated over 30,000 Java JDK applications in a few months, saving the company $260 million and 4,500 developer years, compared to what it would have otherwise cost.”

ServiceNow mentioned British Telecom (BT) : “BT Group announced that its now-assist pilot helps agents write case summaries and review complex notes faster, cutting both times by 55 percent. This helped drive down the average time to resolve cases by one-third.”

The ideal customer profile for an AI startup are hiring managers recruiting for rote work in challenging labor markets facing margin pressure.

When faced with the choice between a long hiring process or the potential to fulfill the role with a software robot at 15-20% the cost of human labor, a hiring manager calculated risk to try AI may result in tremendous savings to the business.

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