The AI Creative Destruction Wave

The scariest thing to me about AI is that I think very few of the current companies and products are the best solutions.

Current companies are inefficient versions of what they could be. Current products are bad versions of what they could be.

This was never a problem before because everything is like that. Every company making every product. We’re all struggling with efficiency and bloat and overhead and bureaucracy.

This is what scares me.

I think we’re about to see millions of jobs lost—not just because the companies and products that survive will replace many workers with AI.

What I’m really worried about is those companies and services and products disappearing altogether.

The New Competitive Reality

I’m worried about how many of them will be replaced by brand new products and services that do the job much better, and iterate far faster, because the “team” that made them is actually just 1 or a handful of people who are shipping features almost instantly.

Think about what this means. A traditional SaaS company might have:

• Product managers
• Designers
• Frontend developers
• Backend developers
• QA teams
• Support teams
• Marketing teams
• Sales teams

Now imagine a competitor with 2-3 people using AI to handle most of these functions. They can:

• Ship features in hours instead of months
• Pivot instantly based on customer feedback
• Operate at a fraction of the cost
• Price their product 90% cheaper

The Protected and the Vulnerable

Of course there are tons of businesses and products that have moats of different kinds, and that this won’t happen to. Companies making hardware. Companies where it’s almost impossible to switch to a competitor.

But I think most products and companies—especially SaaS companies—are about to face existential pressure from new AI offerings that are just better and cheaper.

Consider the typical B2B SaaS company:

• High customer acquisition costs
• Complex onboarding processes
• Armies of customer success managers
• Endless feature requests backlog
• Slow development cycles

Now imagine a lean AI-powered alternative that:

• Onboards customers automatically
• Provides instant 24/7 support
• Ships requested features in days
• Costs 1/10th the price

The Timeline Is Terrifying

I think AI is going to remake things. It’s like a giant reset. For a lot of things like government I’m eager to see the changes.

But I’m very concerned that the replacement of these companies and products and services is going to abruptly shock the labor market in a way that we’ve never seen before.

Unfortunately, there doesn’t need to be some giant movement for this to happen. It’s not like a bunch of people are gonna coordinate and say hey, let’s do this.

It’s a whole bunch of tiny cuts happening independently.

Death by a Thousand Startups

Every week, another tiny team launches something that makes an entire category of software obsolete.

• That project management tool your company pays $50/user/month for? Someone just built a better one for $5.
• The customer support platform requiring a team of 10 to manage? Now it’s an AI agent that needs zero management.
• The data analytics dashboard that took 6 months to implement? Built in a weekend by one person.

Each one seems insignificant. But collectively, they’re hollowing out entire industries.

Why Listen to Me?

But wait, why do I have an opinion on this? And why should you consider anything I say?

First off, I could be wrong, and no amount of experience can negate that. But for those skeptical of my perspective and/or experience, I’ve consulted for hundreds of companies across multiple industries in the last 25 years. I’ve worked full-time at companies like Apple and HP, and have seen a lot under the covers of what makes companies move slowly. And that’s why I’m worried.

When one person can build what used to take a team of 50, and when AI can handle what used to require entire departments, the old way of doing business is going to face extraordinary pressure.

This isn’t about whether AI will take your job. It’s about whether your entire company, or product, has a reason to exist at all in a market full of options that move faster than you.

And this doesn’t need to happen all at once. It’s not like there’s going to be some meeting where people decide to replace “old” products and services. And companies aren’t going to decide to lay off workers en masse.

But all of them individually are now facing that pressure. And I think a large number of them will either go out of business or lay off many or most of their people.

I’m worried. Let’s hope I’m wrong.