AI Rollups: How Legacy Industries Are Turning AI Into Million-Dollar Businesses

00:00:00: What type

00:00:00: of

00:00:01: entrepreneur do I have to be... ...to build a company in this space successfully?

00:00:06: Is it the same kind of skills that are needed for built-a startup.

00:00:12: We're going to have AI agents support humans, To do their job better faster stronger AI enabled robots effectively Beyond the cost savings that i've generated myself.

00:00:23: How does this translate in terms of competitiveness In the market?

00:00:27: Am I reducing my prices?

00:00:28: is everyone else also reducing Their prices because they Have access to some AI?

00:00:34: Everyone is talking about AI and artificial intelligence everywhere, but the use cases are still not that clear.

00:00:40: And one of these case is rollups like buying companies putting them together and then trying to figure out everything.

00:00:47: that's administrative being better done through The help of artificial intelligence using a I to enable businesses be more efficient Be more productive and combine them because you have the back end that you could put on as a layer to increase the value.

00:01:03: So one of the trends right now we're seeing is entrepreneurs buying different companies, they have similar expertise and similar offering bringing them together by connecting their dots through an eye-enabled backend administrative work everything in the Backoffice.

00:01:21: And thats exactly what Mike Malko and Cyrus Hasabi are talking about this episode of The Unicorn Bakery.

00:01:26: Cyrus is a aerospace engineer very deep in the trenches was at Salesforce before.

00:01:32: Mike is a serial entrepreneur and angel investor, both of them in the US talking about everything that's important for use cases with AI what's happening?

00:01:42: What's not happening And how you can use it For your company.

00:01:46: So I hope this episode Of The Unicorn Victory brings tremendous value to You.

00:01:51: if It does please subscribe To the podcast!

00:01:53: Now Mike & Cyrus over.

00:01:58: Welcome to another episode of Unicorn Bakery, today with Cyrus.

00:02:03: And we will talk about AI but also talking old school companies and how you can combine both.

00:02:13: Maybe Cyrus let's just start by telling us a little bit about yourself then mostly your fascination Of

00:02:27: course, thank you so much for having me Mike.

00:02:29: It's a real pleasure to be here and I'm excited to share more about my work on the space... ...and my passion for intersecting AI in the traditional economy as well.

00:02:42: So yeah, brief background of myself.. ..I was born in France raised in the UK.

00:02:46: for most of my life I've lived here also London For about twenty years.

00:02:52: I'm an aerospace engineer by training, spent some time as a sales engineer at Salesforce.

00:02:57: Went to business school in the US and then joined The Fun World of Venture Capital in twenty-twenty two.

00:03:05: And then over the past Two years i've been exploring the intersection of technology for various traditional economy verticals that I felt were just historically falling You know out of the typical venture spectrum.

00:03:20: But I felt we're increasingly good candidates for venture investing or any other types of investment as well.

00:03:30: And working now with the search fund investors, so happy to share more about that too.

00:03:35: but yeah i think it's a huge topic and there are lots to be shared.

00:03:38: So happy to answer your questions.

00:03:41: Yeah technology has always been used for private equity To improve companies.

00:03:49: The way I think about it is that a few years ago, maybe ten years ago you usually use technology to reduce costs.

00:03:58: Right?

00:03:59: To basically improve one part of the P&L.

00:04:03: but now You can also use it to increase revenue or to reach more customers and just like...you have just more leverage overall.

00:04:13: But maybe you can tell me a little bit about what has changed over the last few years when we think of the intersection between technology and the old economy.

00:04:21: Because a lot has changed, right?

00:04:24: Absolutely!

00:04:24: I think that a lot have changed for sure... The main change is being democratization in two ways One in terms of cost, how much it costs to distribute the produce new tools and so on.

00:04:40: And two In terms of willingness to adopt right?

00:04:44: Especially if people are increasingly familiar with AI type interfaces and their personal lives.

00:04:49: you know think through chat GPT for Plexity all this good stuff.

00:04:54: It's easier to push as well On The in that in the workplace as Well.

00:05:00: If I may say I Think there is other drivers as well, kind of non-tech and more to do with just wanting it be more competitive.

00:05:10: Wanting to do more with less things like that.

00:05:14: but I think on the technology front and its frontier in terms being applied through traditional economy those are probably two main factors.

00:05:26: by the way we're still very early in that journey as well.

00:05:29: And we hear a lot about AI-enabled services and AI rollups now over the past few months, but I think in the grand scheme of things it's still very much in its early phases.

00:05:39: Yes, you've been a big proponent for awhile right?

00:05:42: You even have like a WhatsApp group who are building in this industry, posting lots of content on it... This is also originally why i thought would be good to chat here because they just know your not thinking much else.

00:05:58: Maybe you can give a couple examples of what we're actually talking about, so that people who have not heard of AI-enabled services or AI rollups can get an understanding of the basics.

00:06:13: We start with basic definition and then some examples afterwards to drill deeper

00:06:21: for sure I think.

00:06:22: by the way there is multiple layers overarching theme, which is AI-enabled services.

00:06:29: Which I'll explain first...I think you have rollups in the context of AI enabled services and then you also have AI under context of roll ups!

00:06:39: This kind of interchangeably used.

00:06:40: but i think it's probably worth adding my views on how these kind of differentiate.

00:06:47: what belongs to what category as well?

00:06:50: On the AI Enabled Services piece The best way to define it is just say in the last twenty, twenty-five years we've been you know adventurer and then the world of technology.

00:07:03: We're being focused a lot on software for things right?

00:07:07: Software your CRM for yourselves people or software for customer service, software for you know function insert problem And we haven't talked about services much, if at all.

00:07:20: I dare say service is a little bit of a vulgar term in VC just because it's not... The economics are typically just not there right?

00:07:29: What i mean by AI-enabled services is redefining the services that surround us That are typically quite labor intensive Your accountant your lawyer your property manager, you're insurance broker.

00:07:43: You name it really.

00:07:45: they make up the vast majority of the economy.

00:07:47: we don't even think about them on a day-to-day basis but there are their and its bout redefining those services for quote unquote.

00:07:56: The Age Of AI if I may say so to say.

00:07:59: with today's technology ,with today ways doing things other way to rethink an augment people who work in these service industries a new generation potentially of exciting services companies can emerge.

00:08:15: Okay, so basically the first thing we're talking about then is how do you use AI to improve the value creation in the services industry?

00:08:24: And that can also have a couple different shapes right?

00:08:30: So You could either sell software to accountants or They can use AI to do bookkeeping, to do accounting.

00:08:41: Maybe even text prep more efficiently right?

00:08:44: Correct.

00:08:45: or what you could also do is either buy the account and then force them to use AI Or You Can Just Build Your Own Accounting Company Based It All On AI and undercut the prices of someone who might not use AI, right?

00:08:59: So there's a lot different shapes to do that.

00:09:01: But maybe let's start with AI-enabled services.

00:09:03: we mean using AI to reshape the way services are being provided.

00:09:08: That is this one piece.

00:09:09: And then tell us for most people will probably know but what our rollups like?

00:09:17: Most have heard about it.

00:09:18: Do your own definition of roll ups How they actually factor into conversation now?

00:09:24: Yeah, of course.

00:09:24: Absolutely!

00:09:25: And I think and i appreciate maybe we can talk about this down the line in our conversation too...I think at the core a lot of there's kind of will always be a bridge between you know the world of VC and private equity as well which is by the way quite interesting.

00:09:41: so what is meant by roll-ups?

00:09:42: Well it's quite visual term right just kinda like your rolling up a little piece of paper to make it bigger.

00:09:47: And I think what, uh-what means is you're taking aggregating out of small businesses and shifting them from standalone, small local business to one unified ideally integrated fat form that has a lot of skill economies data network effects in this situation as well um just benefits from being at big companies.

00:10:08: so all the advantages.

00:10:12: So basically, roll-up is I buy a couple of smaller companies and then morph them into one bigger company to use the advantages.

00:10:21: Exactly!

00:10:22: I buy all the bakeries in my village and make it on big bakery group...

00:10:28: Let's not use the bakery or coffee shop example because there has been little bit controversy recently and many of our listeners are from Germany about a VC-funded coffee chain.

00:10:40: It's been ninety percent, ninety percent off the content that I've seen on my... On the German side of my LinkedIn was someone vandalizing this like BC funded coffee chains.

00:10:52: so we will buy services companies.

00:10:55: in fact you don't care much

00:10:57: exactly.

00:10:57: accounting firms.

00:11:00: Okay great!

00:11:01: So now we have established like the ground layer.

00:11:07: My question might be, why is this so interesting right now?

00:11:11: Because rollups have been around for a very long time.

00:11:17: There's like running gag here in the US that well oh there's an HVAC company.

00:11:21: For those who don't know what HVAK is it's like The Cooling ACs, the cooling heating all of them in your

00:11:29: house.

00:11:32: Exactly.

00:11:33: And every single HVAC company has either been rolled up or gets like ten emails a day of, hey we want to buy your company?

00:11:40: So roll-ups have been the thing for awhile right.

00:11:43: so why are you that interested in it now?

00:11:46: and I assume The big talking point is AI.

00:11:49: but let's talk little bit more about Why is AISO helpful when we talked about these types Of companies?

00:11:56: For sure.

00:11:58: okay there was multiple things To be said.

00:12:02: concept and I'm trying to make it as concise, you know...as possible.

00:12:07: They want to open too many kinds of worms at once!

00:12:14: The first thing that's interesting about the roll-up piece is there are so many...there is a huge wealth of small businesses potentially up for grabs If we just step back from the AI piece for a minute, which by the way is feeding this broader trend with people going for entrepreneurship through acquisition routes trying to acquire any businesses because on the other side you have also lots of people who are looking to sell their business.

00:12:45: From the previous generation slowly going into retirement.

00:12:52: When you think about AI-enabled services, for some industries I can detail kind of how i've thought about what makes a roll up ready AI enabled service play as well.

00:13:03: But For Some Of These AI Enabled Services it Makes The Most Sense To Do A Roll Up Because That's How You Go And Acquire Your First Customers In The Most potentially efficient way, financially-efficient way.

00:13:14: So instead of raising a tonne of capital and then going after your customers in the hopes that they would switch away from the existing service providers that we've had for a long time and come to you which will be not best use of your capital You might find that you can for fairly good price acquire some of these businesses.

00:13:33: That are you know?

00:13:34: To the extent there quite small require them for access to their customers And then use that for initial scale.

00:13:42: Is that making sense?

00:13:46: I think it is, and let's dive a little deeper into this.

00:13:51: So who are buying these companies?

00:13:57: You mean the small businesses right?

00:13:59: Yeah you said...I want to buy them so they have access to demand immediately.

00:14:05: Okay give me some concrete examples if you'd like.

00:14:08: Yes please

00:14:09: Let us say you know, what a really hot theme in Europe has been property management and many forms.

00:14:16: So we can use that because if listeners are going to Google this they'll probably find a lot going on at property management.

00:14:22: so let's use that!

00:14:25: Think about I want to build an AI-enabled property services business.

00:14:32: So what is that job?

00:14:33: I'm managing the building, and managing the fire code...I have to manage payment connections because people are sending me money And i'm also basically the orchestrator of repair works throughout the building right Very labor-intensive very localized and so on.

00:14:51: Now with AI there's tons of things you can do to improve it.

00:14:54: You can automate a lot of the comms communications with people, you can automate some level of payment tracking.

00:15:03: You could use AI to read ingest long documents like compliance documents and support that aspect of things as well.

00:15:14: so let's say I'm thinking about if i want to go acquire my first customers.

00:15:20: it might be better for me property management players locally, because that would help me access directly my customers.

00:15:31: It might be better to use my money that way versus if I try to convince people across these different buildings to switch away from their current service provider.

00:15:42: to me basically it doesn't mean that my entire company's story has to be revolving around just buying businesses but That in the early days, I do that just because it helps me get initial access to some customers.

00:15:57: Got it and so customer access is one of the main reasons apparently.

00:16:02: are there any other reasons why you would buy these types of companies?

00:16:07: Yes i think in general for You know, for these kind of roll up plays and by the way we can also a whole avenue with just building your company from scratch in services.

00:16:17: And I know that so happy to touch on that.

00:16:19: but i think if you're when you are businesses where there is some sort of regulatory barrier two entry where it's fairly non-cyclical, so whether the economy is kind of up or down.

00:16:37: You have very good visibility on your revenue when a lot of the companies are fairly standardized in the sense that some SMEs will look and operate in similar ways and have like similar customer bases and things like it can make quite a bit to go acquire these businesses.

00:16:58: The bonus and what we should also look at is how much competition there is in this space, right?

00:17:04: Are they a lot of other PE actors sometimes who are also competing to buy the small business's... Is it market?

00:17:13: you know where we call fragmented so or their like thousands of these small businesses to go after?

00:17:18: Or just few because these also impact by simple law supply on demand your ability to negotiate acquisition at attractive prices, basically.

00:17:29: And of course if you're here to make some investment returns for yourself as well this is the consideration.

00:17:35: that's hugely important

00:17:37: Yeah and it seems like many people specifically in Europe have discovered these more recently.

00:17:44: I know there was a wave of former tech entrepreneurs now building roll-ups or thinking about roll ups providing money for roll-ups.

00:17:57: So, is it just AI that has prompted at all or... Is there anything else I'm missing?

00:18:06: No!

00:18:07: There's two things in the same time actually.

00:18:10: so one might even say AI Rollup as kind of the latest two buzzwords we've put together and some way.

00:18:17: That why i also polluted saying like there are multiple facets to this because I think in parallel, there's also as i was saying like a lot of interest going after and buying these companies for this.

00:18:31: There are multiple reasons...I say one of the chief ones is the realization that there is a huge wealth transfer going on over the next few years from this prior generation of business owners to the next-generation.

00:18:45: basically right?

00:18:46: In parallel you might add other things You may add my own hypothesis but At the same time, as startup founding has democratized.

00:18:55: It's cheaper now to build your business than it was twenty years ago.

00:19:01: Well maybe its also become more saturated.

00:19:03: so people are looking for new ways To buy a business that is perhaps perennial and cash positive.

00:19:09: Maybe there is Also an element of wanting agency And wanting go back into concrete tangible industries.

00:19:17: That something I've heard some Of my friends were in this space too.

00:19:22: I think there is this as well, and among that crowd of course curiosity and excitement for how to use AI.

00:19:29: So i've tried to develop people who are trying go after VC types of players.

00:19:37: so we're going build the next core center company which will be AI enabled And we're rolling up right now because we need to grow and acquire customer data, scale.

00:19:48: Then were going into this multi revenue stream platform with these visionary types of VC plays on one side I think the other.

00:19:57: you have a new version of rollups which has been around for many years.

00:20:01: To say We've found an opportunity here to aggregate businesses in this niche.

00:20:06: but On top of Other areas value creation we are also exceptionally good at implementing and building AI for various functions of that platform.

00:20:19: I think these two are kind... They look the same in early days, they're overall different stories both very exciting off course.

00:20:27: Yeah i think there's always a lot of nuance to it right?

00:20:29: And then theres like this third thing you alluded earlier which is.. ..I am using someone else money but im just buying one company.

00:20:39: There's like.

00:20:40: there is a handful of people also who are buying mid cap, with market companies that have been going on for awhile.

00:20:49: They're buying out the owners and then they just setting up themselves as the CEO only off specific company so their not rolling anything.

00:20:58: So usually targets there little bigger.

00:21:01: And this goes into direction to what you said Like how does my company continue when I'm retiring?

00:21:11: So that's like another pillar of this whole thing.

00:21:14: Maybe let switch gears a little bit, Let's assume... ...I am building an iEnabled service companies and it doesn't matter whether my long-term plan right now is to build a VC type company out of it or whether in quotation marks just want to build the roll

00:21:32: up

00:21:32: case Yeah then sell at few years afterwards.

00:21:36: There's a lot of playbooks that you have to go through, actually make sure it works.

00:21:41: Because its not simple.

00:21:43: I buy these like fifteen accounting firms and then there is worth so much more because i will make them more efficient than when they sell again right?

00:21:50: There are lots of work culture integrating systems with each other etc.. So what do we see that actually works really well in implementing this playbook?

00:22:03: I think you're so right to ask this question.

00:22:06: One of my biggest fears is thinking too top-down about these things, and it's actually too easy to say oh yeah i'm just gonna combine AI on this job and I know best and fantastic!

00:22:20: And I think this recipe for disaster frankly, a recipe for bubble like mechanics... Okay we'll give the principle first then tactical application.

00:22:30: The base principle in this stuff is primary research, primary understanding and bottoms-up thinking.

00:22:36: In terms of the job at hand so I'm an accountancy firm let's say to take your example who are the employees?

00:22:46: Go around you know picture yourself in an episode of The Office in Scranton.

00:22:51: i'm going there into the office room.

00:22:54: whose doing what And What Are Their Days Made Of?

00:22:58: What are the tasks made of?

00:22:59: I would really break down the tasks, what needs to be done and what flow.

00:23:04: And parallel to a task thinking about the information flow.

00:23:07: you know where is that information stored?

00:23:10: Is it kind in my brain?

00:23:12: so can i digitize this?

00:23:14: there's an audit trail.

00:23:15: Where am i sending the information To who?

00:23:18: or The bottlenecks?

00:23:19: Kind Of building A Flow of Work and Data Rather Information?

00:23:26: I think that's kind of the base principle because this ties it back to people, individual employees who you're trying to augment and make more productive.

00:23:36: And they are everything!

00:23:37: They were core business services is about serving other people.

00:23:41: at the end You can't change them.

00:23:44: So... It really has to start with that Understanding, I guess before you kind of invest in your time and other people's money.

00:23:58: And then understanding what are the key drivers?

00:24:02: The main levers to be pulling on where your risk areas and blind spots are again... In terms of people organization and workflow.

00:24:13: This is what i'm saying.

00:24:17: really was a short fairly short set of sentences, but it's extremely hard and tedious to do.

00:24:24: And then the second piece is tying it back to a dollar value?

00:24:31: What's the impact on what you've done?

00:24:32: Okay now I saved twenty percent off my weeks time in terms of work... Is that reinvested into?

00:24:38: am I salesperson and can reuse that time for more sales?

00:24:42: Great!

00:24:42: More dollars from DAI or Am i just having better work-life balance?

00:24:49: what's happening as a result of this kind of efficiency, assuming it successfully implemented.

00:24:55: And I think the third thing and last thing is beyond cost savings that have generated for myself at the unit economics level—as in its cheaper to deliver the same service than I used to—how does this translate into competitiveness?

00:25:12: Am i reducing my prices?

00:25:14: Is everyone else also reducing their price because they have access in which case we're orders on the race down to the bottom.

00:25:21: Am I providing a more premium service so i can actually raise my prices and increase my margins?

00:25:27: On both sides, um...I think just tying it back to people and then dollar value or euro value is kind of the way to go.

00:25:37: And I don't know that We're doing enough of this as uh As people in this space now

00:25:44: Got it!

00:25:47: especially people in Europe.

00:25:49: about rollups, like a lot of path lead to you.

00:25:52: Whether it's asking founders who should talk... That

00:25:55: is good!

00:25:55: It means I'm doing my job fairly well then?

00:25:58: Yeah or investors also…I think that partly just because you've built this community and you post a lot about it.

00:26:09: but one thing might be interesting for me too understand What type of entrepreneur, what type of person do I have to be?

00:26:24: To build a company in this space successfully.

00:26:28: Is it the same kind of skills that are needed for start-up?

00:26:31: is It slightly different skills that i need's?

00:26:34: isn't completely different skill set and eat like who?

00:26:37: Who?

00:26:37: other prime examples Of being good at building these types of companies now assume there's different archetypes but maybe you can just talk a little bit about when.

00:26:46: should someone think, hey this might be something for me?

00:26:49: Or also thinking maybe it's not the right fit.

00:26:54: Great question!

00:26:55: I'll give you what is a great combo but i don't know that anyone re-is kind of precluded from doing these sort of stuff... The skill set or environment in which they are coming into depending on your work is something to be aware of.

00:27:14: pretty well I think let's start with the following.

00:27:17: You can't move fast and break things in a services business, so it is not kind of like the hacker mantra that says if this doesn't work or first.

00:27:28: users are huge fans of us you know?

00:27:30: That is great in traditional startup era here.

00:27:33: If your providing just any service to people Service quality matters It cannot go away regardless how their sausage has been made.

00:27:42: Well, and comparatively one might argue as well.

00:27:45: So the people that you need are at the crux.

00:27:51: I think most important is someone who understands what's the earned secret or was ready to get the earn-secret on the operational side?

00:28:00: What does operating a business successfully in this space work now?

00:28:07: You can have it because your founder previously founded one such business in the, you know maybe you were a PE backed operator and now you're doing this for these new era.

00:28:17: It can also be that your buying your first business and The seller actually is staying with you guys And it's super aligned on the next stage of the company.

00:28:25: It Can't Be Actually That You Guys Have Never Done This But You have A ton Of Amazing Advisors Around You Who Know This?

00:28:31: It Can Come In Multiple Ways.

00:28:32: I think End Principle Is You Need I Think The Operating Pragmatism To Understand what, you know how to run a services org in this business.

00:28:41: Be it at the beginning just even fact.

00:28:42: check your own thesis on What are you going to do?

00:28:46: In this space because change management is hard Even and very small or an integration is hard.

00:28:52: I think The second thing Second skill set someone has to bring whether again co-founder or hired or other ways Is if we stick to the roll up element is M&A process right?

00:29:07: You're good at diligently acquisitions fast and well because once a bit, you know.

00:29:12: on one hand I said Instead of raising round after around the venture money for sales in marketing.

00:29:17: You can You know invest money into acquiring the business.

00:29:21: The flip side of it is A customer can technically turn out of one company And to the other right but like again use that if rule one day gorillas next they.

00:29:31: But Once your company's acquired its acquired.

00:29:34: so you have to probably acquire high-quality companies fast.

00:29:39: And then the third thing I'd say and we probably don't think about that enough is someone who's good at integration, so to integrate on two things.

00:29:50: first are you able to align the troops people?

00:29:55: Because in the end it's all going back to leadership and organizational behavior and topics.

00:30:00: but Are You Able To Align The Troops On The Change Plan or Are You Abled To Have a Common Touch with people who might be quite, you know... Who just have very different lives to you and are now under your leadership.

00:30:15: So so you have to manage that?

00:30:16: And I think integration also—and that's probably a different person from an IT perspective—to the extent that you're building an AI-enabled services business.

00:30:26: You're building data infrastructure that underpins it data architectures across various companies that you've acquired and trying to unify them into one.

00:30:42: And so I think, most likely the only founder trade is probably the common touch intangible trades that i mentioned.

00:30:58: everything else was always horrible But yeah, I don't-I would just say that's kind of the... I think the worst thing you can do is to go after an industry.

00:31:10: That sounds great but you haven't surrounded yourself enough with people who've lived through a journey trying to integrate these companies or operate these companies such that you might find yourself facing unexpected pitfalls.

00:31:28: Maybe two more questions in the course time?

00:31:31: We could talk about this for days.

00:31:34: Let's start with, how are you evaluating these companies?

00:31:39: Because you're investing money into them.

00:31:42: You were providing the money to either build or buy them right.

00:31:47: so what is a criteria that your looking at?

00:31:50: So I think there was few things specifically in this AI-enabled roll up category.

00:31:59: I guess chiefly believe in the opportunity to transform gross margin structure or the contribution margin, you might call it a unit economics of service delivery and this business.

00:32:13: So is this a business that has labor intensive?

00:32:17: That have significant share of automatable work repetitive work I guess chiefly where the significant chunk of an employee's workload is repetitive tasks that frankly they also want kind of, you know outsourced to the machine.

00:32:35: To augment them into doing something a bit more productive and fulfilling for themselves.

00:32:39: so that is kind of the base.

00:32:42: Is this an industry in which This can be done?

00:32:46: True I think it's around...is there is just team setup In however way if we put together That You Know It's thinking about similar ways as what I was saying earlier around bottoms-up thinking, clear industry thesis and things like that.

00:33:09: Those are the market and team points.

00:33:14: In the VC context you're also thinking about kind of what is the strategy around product versus M&A?

00:33:18: You're assessing M& A pipeline, you're assessing Well, it depends also what stage right kind of.

00:33:26: I've done some incubation stage investments Some slightly later stage.

00:33:31: Right?

00:33:31: So to the extent that there is in any extend you're trying to understand Also What does the quality of the companies That have been you know that are available To acquire if your going through a roll-up route?

00:33:42: Um Whatever I missed and would have said Yeah i think.

00:33:48: And i think There's an element also Of what Is The Product that you're building, and what is the... What kind of level of evidence can we get around?

00:34:01: impact on their product?

00:34:02: That has been developed so far.

00:34:06: And one of the employees saying this hasn't actually translated into meaningful dollar value.

00:34:12: if it's already in the early stages like typical pre-seed and seed really ends up being about.

00:34:18: do we have a thesis under space or people who are backing?

00:34:23: Later on, of course you're looking at initial evidence around the unit company level.

00:34:27: What kind of value creation has been affected?

00:34:31: Is that a helping to answer your...

00:34:33: Yeah!

00:34:33: That's definitely helpful.

00:34:35: Maybe as last question too closed off where can people learn more about this topic?

00:34:41: maybe also more like your own thinking about the topic.

00:34:43: but then in general let us assume I want to learn more.

00:34:46: i might wanna found a company in space and maybe start investing it if they have money.

00:34:53: So what is the best way to educate myself?

00:34:59: There's tons of resources now increasingly floating around.

00:35:05: I can do a little shameless plug on this one, but there are some articles in the format of essays so you read those as well.

00:35:16: My friend and peer Sahil Patwa has good sub-stack.

00:35:20: Happy to share a set of newsletters.

00:35:25: We can put it in the show notes?

00:35:26: Yeah, for sure we could do that.

00:35:27: there's a lot... So is

00:35:28: this mostly sub-stacks?

00:35:33: then where people are...?

00:35:34: I think so!

00:35:35: There're some market maps which have been published as well in the past and you see companies coming up.

00:35:42: One thing you might notice is some industries are overrepresented Right now, there's a lot going on in accounting.

00:35:51: There is a lot of property management as I said and to some extent insurance topics at large which kind of super exciting.

00:36:02: I'd say if you're a founder, it might be interesting to also consider where the puck is going.

00:36:07: so maybe this is opening up the topic for different conversation but i think there's...I think the next frontier right now is around like physical AI and physical work services and i think you might want to consider that in which case robotics is also something to go and acquaint yourself with as a founder.

00:36:28: Yeah, I just made a couple robotics investments

00:36:30: amazing.

00:36:30: Well then see perfect.

00:36:31: so

00:36:33: I can.

00:36:33: I could follow them to you and then we can see whether we can Deploy the robots in any of your companies.

00:36:40: well?

00:36:40: I mean did he know to the extent that here in this conversation We've been saying We're gonna have AI agents support humans to do their job better faster stronger And turn you create modern era services organizations.

00:36:55: You could expand the point and say AI enabled Robots effectively are going to support physical worker humans, uh To do their job better faster stronger.

00:37:04: So

00:37:06: Yeah I think that's a good way to close it.

00:37:08: um We are buying companies and then we'll see how robots improve them.

00:37:13: Yes exactly yeah go ahead.

00:37:15: i was gonna say one point?

00:37:16: I think That I forgot to mention earlier around the interest like what makes this interesting And why I found is personally interesting from the perspective of a VC investor in the past.

00:37:27: one crucial point, because people might say oh yeah but why don't I just invest or build an AI agent business for a job right and another services company.

00:37:35: And i think that point is around.

00:37:38: where is there the most commoditization?

00:37:41: Where you might accrue the most value to yourself!

00:37:45: One might make the argument here as a service organization in your perennial business model whether service is continuously needed And you're able to build a new business with the right to win as a new entrant, because you have a better cost structure using the fact that these AI agents are increasingly kind of commonplace and democratized versus maybe in some industries.

00:38:12: You might not find the same economics for yourself if you were to go at the AI agent route?

00:38:17: That's may be your hot take but this is good thing too.

00:38:20: add it makes up this conversation tool

00:38:23: okay.

00:38:23: Well, Cyrus thank you so much.

00:38:25: If anyone wants to learn more about AI enabled roll-ups enable service companies or anything else You should check out the sub stack where there's way more information than we could cover today.

00:38:34: and Yeah happy investing Happy building and speak soon.

00:38:37: Thank you So much.

00:38:38: like a pleasure to be here I hope

00:38:40: this episode was as insightful as it was to us because It's so important to understand and discover the use cases on how actually make use of AI.

00:38:49: You can listen it all day long, we know that its here but what is actual process?

00:38:54: use AI inside the company to be more productive and efficient.

00:39:01: If this episode was helpful, please send it a friend and subscribe not miss any other episodes!

00:39:09: Thank you so much to Mike and Cyrus for listening next week with another episode of The Unicorn Bakery.