The Revolution in Services: General Catalyst's AI Rollup Strategy, with Marc Bhargava

"The Cognitive Revolution" | AI Builders, Researchers, and Live Player Analysis

Marc Bhargava from General Catalyst discusses their Creation Strategy for building AI-enabled roll-ups – companies that start as vertical software startups, then grow by acquiring traditional service businesses and transforming them through AI automation. They explore how systematic analysis of 70 service categories identified 10 verticals where 30-70% of tasks are automatable today, potentially transforming low-margin service businesses into software-like companies with 30-40% margins. The conversation covers the practical implementation of AI in industries like accounting, legal services, and call centers, where teams shadow workers to identify automatable tasks and layer AI into existing processes. While both see tremendous potential in bringing AI transformation to Main Street businesses, they debate whether the transition will be as smooth as projected or more disruptive to employment than anticipated.

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Sponsors:

Labelbox:

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Oracle Cloud Infrastructure:

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Shopify:

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NetSuite by Oracle:

NetSuite by Oracle is the AI-powered business management suite trusted by over 42,000 businesses, offering a unified platform for accounting, financial management, inventory, and HR. Gain total visibility and control to make quick decisions and automate everyday tasks—download the free ebook, Navigating Global Trade: Three Insights for Leaders, at https://netsuite.com/cognitive

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CHAPTERS:

(00:00) About the Episode

(04:50) Introduction and Investment Thesis

(13:04) Software Substituting Labor (Part 1)

(20:00) Sponsors: Labelbox | Oracle Cloud Infrastructure

(22:37) Software Substituting Labor (Part 2)

(26:40) Company Development Playbook (Part 1)

(35:59) Sponsors: Shopify | NetSuite by Oracle

(39:19) Company Development Playbook (Part 2)

(41:19) Customer Partnership Strategy

(51:57) Technical Implementation Approach

(01:00:15) Market Consolidation Dynamics

(01:07:57) Automation Limitations Analysis

(01:19:25) Big Tech Competition

(01:22:40) Public Strategy and Vision

(01:25:56) Outro