Suppose you’re a startup in a competitive market with a large incumbent who owns the system of record - the software that runs the sales team or the support team or the marketing team. How do you win?

In the last decade, startups have chosen to identify a feature or workflow to improve & leverage that wedge into an advantage. Many have reached great levels of success, but few have overturned the incumbent. Early AI advantages have reinforced this advantage.

How does this change?

When AI products are sold as services, they replace in-house labor. This changes internal processes.

When the internal processes change, the opportunity to replace the system of record arises because the existing workflows are no longer relevant.

If paralegals’ roles and business development reps’ roles & account executives CRM reponsibilities change meaningfully, then the systems that are fully optimized to support these roles don’t match the needs of the role anymore.

Systems-of-record are the horse carriages in the age of the automobile - designed for a different job to be done, outmoded, outdated.

But the key is changing the internal operations of a customer, evolving the metrics, & understanding those dynamics more quickly than the rest of the market.

Selling service-as-a-software enables a startup to change the way a customer works. Behavior change is hard. But successfully executed, it’s a moat.