Shaun Clowes: belief

Transcript context

…Something sort of related, I'm just going to ask one more AI question. I don't want every talk to end up being just all AI, but something that's kind of been a meme recently, and I know you have a perspective on this, is that AI makes it really easy to build products. So in the future, if you can easily clone, say, a B2B SaaS app like Salesforce or Atlassian or whatever your favorite B2B SaaS app, what happens to these businesses long-term? Do they just become, are they all in trouble? Are there going to be 100 Salesforce competitors? What's your sense and prediction on what might happen there? Yeah, I think it's really weird. I think people really underestimate where the value is created in these applications and they just kind of get it completely wrong, and I'm not sure why that is. So if you think you bet. So I spent a long time at Atlassian, so I worked a lot on Jira, which many people know, and I spent a long time at Salesforce, so I spent a lot of time in the CRM ecosystem, the marketing ecosystem and all the rest of it. If you want it to be not charitable, you'd step back and you'd look at all those applications and you'd say, "They're all just forms on databases." You'd say, "The Jira is a form on a database, Workday is form on a database, so Salesforce." They're all forms on databases, all vertical SaaS or business SaaS is ultimately forms on databases. And you're be like, "Well, how hard can that be to replicate?" And the answer is unbelievably hard, unbelievably hard. And people just think, "You totally get it wrong." Because it's not actually just about the data model. So if you think about, if it formed some databases, it's these beautiful user experiences that sit on top of data models. So whatever the object is, it might be a customer object or a campaign object or an employee object, you could say that, "Well, there's some elements of lock-in in the object, the object itself, like the fields of the object." I'm like, "Pretty boring. That's not very interesting." But sure, maybe. Certainly there's some value in being the system of record like the default that everybody uses. There's definitely some value in the UX. Like, "Well, I want to be the best HR-facing applications for working employee data." Yeah, there's some value there, but the real thing just staring at everybody in the face is it's all about the business rules. That is what drives the lock-in because why do you buy Workday? You don't buy Workday for its out-of-the-box configuration. You buy Workday because you want to configure it to be Lenny Inc's HR processes. It becomes Lenny Inc's Workday. It's not Shaun Inc's Workday, it's Lenny Inc's Workday. And actually the longer you have the software, the more it becomes that, the more it becomes less and less like Workday and more and more like your specific company. Which makes sense because it was built to be configured to meet the needs of any specific company, and every company is their own precious snowflake. And as that happens, those configuration pieces, the bit that makes the application native and a fit for your organization makes it a fit for nobody else's organization and also makes it a black box to the point that you don't even understand how it works anymore. If you went to, for example, Salesforce and you said, "Hey, could you define all of the processes by which software was sold inside Salesforce?" They couldn't tell you that without reading the code of their Salesforce instance. That's not a proprietary secret. That's obviously true because over time, that's literally how sales happened. orce?" They couldn't tell you that without reading the code of their Salesforce instance. That's not a proprietary secret. That's obviously true because over time, that's literally how sales happened. There is no other way to do a sale other than through their internal tooling. And so what that means is that it's not the UI that matters and it's not the data model that matters, although those are both very useful. It's the years and years and years of evolution of the underlying workflows of the product to support the customers, but also the customers evolving those workflows to make them work the way they do. And so how does that impact AI companies? You could say, "It's easier than ever to build forms on a database application." And so I'm like, "Yeah, okay, that presumably drives the incremental value of every new one of those to zero, right?" So probably leads to more power to the existing winning systems of record because there'll just be a gazillion competitors who would just more form some databases. So like, "How would you ever choose between them? You may as well just go with the winner. Nobody ever gets fired for buying Salesforce or whatever. You may as well start from the kind of the premier vendor." That's one element. You could go the other way and you could say, "I've heard a few people mount this argument," which I think is really interesting that at the end of the day, agents are going to take away most of the use of that user interface. So let's say for example, your Salesforce with Service Cloud, I've heard people say, "Well, a lot of those service agents might end up being replaced with agentic workflows. That will mean that there is no person operating the UI. If the UI doesn't even exist anymore, then why do you even need Salesforce? We may as well just have raw database tables on who even needs forms of databases, you can literally just have databases." But that also doesn't make any sense either because the agents have to operate against the rules of the system and the rules are defined by the business processes. So think about Salesforce without a head. Imagine Salesforce had no UI, it would still have those business rules that I was talking about. And those business rules are what define what the agent should do. They're almost telling the agent what it should do and how the world can operate, what is possible, what is allowed. And so from my perspective, this idea that this just completely destroys the differentiation of these kind of business process SaaS applications just seems like a fantasy, a crazy fantasy. The only way I could really believe it is if you said, "Well, you could have a new startup that introspected all of the rules that are configured into a Salesforce to try and reverse engineer what your actual business processes are and then kind of operate on top of that." But the best place people to do that would be Salesforce themselves or Atlassian in Atlassian's case or Workday in Workday's case. I just can't see a world in which this... I think one of two things could happen. All this moving to AI makes those applications even better, even more unassailable, they basically get stronger.…

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