Bret Taylor: belief

Transcript context

…Yeah, I'll start with the example and then I'll broaden it. So at Sierra, we help companies make customer facing AI agents primarily for customer service, but more broadly, for customer experience. So if you have a problem with your [inaudible 01:04:58], you'll call or chat with Harmony, who's their AI agent. If you have ADT home security and your alarm doesn't work, you can chat with their AI agent. Sonos speakers, a lot of different consumer brands. And if you think about running a call center, there's a cost for every phone call that you take. Most of it is labor costs, but if you have, let's just say a typical phone call is anywhere between 10 and $20 USD. Some of it's software, some of it's telephony, but a lot of it is just like the hourly wage of the person answering the phone. So if an AI agent can take that call and solve it, that is in the industry often called a call deflection or a containment. And that essentially means you saved, call it $15 because you didn't have to have someone pick up the phone. So in our industry, basically we say, "Hey, if the AI agent solves the customer's problem, they're happy with it and you didn't have to pick up the phone," there's a pre-negotiated rate for that and we call it resolution based. There are other outcomes as well. We have some sales agents being paid a sales commission, believe it or not. We do. We really think of our agents as truly customer experience like the concierge for your brand and we want to make sure that our business model is aligned with our customer's business model. As you said, these agents need to be autonomous and the outcome has to be measurable. That's not always possible, but I think it's broadly possible. And what's really neat about it is if you talk to any CFO or head of procurement with their big vendors, they look at the bill of materials and it's overwhelming and it's impossible to know if you're getting the value that you hoped from that contract. I think consumption based, which was popular particularly in the infrastructure space is closer to it. But I'm not sure a token is actually a good measure of value from AI either. I always use the analogy, like right now, most of the coding agents are priced per token or per utilization, but there's this famous story of an Apple engineer who had a bad manager who's like had you report how many lines of code you wrote every day? Which every engineer in the world knows is an idiotic way to measure productivity. He famously went in with a report that had a negative number because I think he did a big refactoring, deleted a bunch and it was his way of saying like, fuck you to the man. I think tokens are similar. Yeah, you used a lot of tokens, like good for you, did it produce a pull request that was good? And I think that's the whole point of all this. g like, fuck you to the man. I think tokens are similar. Yeah, you used a lot of tokens, like good for you, did it produce a pull request that was good? And I think that's the whole point of all this. I think there's a huge difference between outcomes-based pricing and usage based pricing because especially in AI, they're not necessarily even correlated and you could have a long phone call and not solve the customer's problem and they give you a negative review online and call the call center again, all that effort was for nothing. In fact, you might've added negative value. And so, I am a huge believer in this. And what's fun about it is it really just aligns... I think every technology company aspires to be a partner, not a vendor. And I think at Sierra, we are truly a partner to every single one of our customers because we're all aligned on what we want to achieve. And I think that is really where the software industry should go. It requires a lot of different shape of a company. You have to be able to help your customers achieve those outcomes. You can't just throw software at the wall because you'll never get paid if it doesn't. Your orientation becomes so extremely customer-centric when you do this the right way. I think it's just a better version of the software industry. So I think it's right from first principles, it's right for procurement partners and I think it's right for the world. We've been chatting a little bit about productivity gains. There's a lot of skepticism in the headlines these days of just like what is AI actually doing? Is it actually helping people be more productive? There was a recent study actually, I don't know if you saw, where they showed engineers were less productive with AI because it was just putting them in different directions. They had to research all what's going wrong here? So I think CX is a really good example where you clearly are seeing gains. Are you seeing actual gains at your company or any other company you work with outside of CX in terms of productivity that is like clearly yes, this is working and a huge deal?…

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