“This is the first of your newsletters that doesn’t align well with what I’ve been seeing in the field.”

After publishing The Four Barriers to AI Adoption, Dave Morse, a reader & a friend who was most recently CRO at Hebbia & VP Sales at Scale AI sent me this email.

Dave continued :

“The biggest blocker to adoption at AI application companies is user education and limitations of frontier models. Finding use cases that work; steering users away from failure cases. Prompting for use cases that work. Dealing with stochasticity.

This is where agents comprise most good adoption stories I know of. GPTs get into production quickly while search based apps or chatbots have a longer path to wide adoption. Even small startups can push agents into production in <2 weeks.

Most customers will waive or streamline security review, procurement processes, etc. to get their desired solution in house IF the vendor can demo a use case that actually works. They will gate some data access until the vendor has certifications or the business simply pushes IT to approve access. Some companies are closing deals in <90 days with no demo…there is some impressive selling going on.

Most AI companies I know send their initial MSA waiving rights to train on customer data. This can be added later if the business needs it. With issues around data retention and training waived the MSA doesn’t look that different from data analytics companies. Customer legal teams push risk around data leaks or other data issues into higher limit of liability”

One of the gifts of writing in public is receiving emails like this one that offer a different view of what’s working in the field.

Some things stand out to me from Dave’s perspective :

The nuance in selling between GPTs compared to search & chatbots is a great example of how the market is evolving differently in different segments : lumping all AI solutions into the same category is a mistake.

Leveraging the executive sponsorship to bypass procurement processes is consistent with the AI imperative boards & executives have championed.

The AI market isn’t a single market : it’s reflective of the software market both older segments & newer segments.

If you have a view on how the AI software market is evolving, I’d love to hear from you.