Enterprise VC-engineer-company builder. Early investor in @databricks, @tubi and 6 other unicorns - @cohesity, @eightfold, @turing, @anyscale, @alation, @amperity, | GP@Foundation Capital
Service-as-software is a $4.6T opportunity. But no one knows how to actually grab that opportunity yet. Enterprise software has gone from assisting human workflows to now, LLMs giving software the ability to actually perform parts of the workflow. Instead of relying on timely and sometimes inaccurate human inputs of structured data, today's systems actively capture and process both structured and unstructured data. The service-as-software shift was huge—but we're on the edge of one that's even bigger. My Foundation Partners Joanne Chen and Jaya Gupta have now outlined how to put the service-as-software paradigm shift into action: through a System of Agents, which doesn’t just streamline a workflow but actually completes whole tasks, becoming the worker. A System of Agents mirrors a human team, with agents taking on collaborative, specialized tasks and continuously learning from each other, just as human teams do. Advice for founders building with Systems of Agents: → Position at the data source, own the path. Traditional software waits for humans to input data, whereas Systems of Agents capture it at the source. When an agent owns the interface where data is born, the system can then orchestrate every downstream action. → Move beyond software budgets, tap workforce spend. When a System of Agents completes a whole job task, it should be categorized as a personnel cost, not a software expense. → Use AI’s 24/7 nature and scalability to create new workstreams. AI agents working in areas like healthcare can operate 24/7, providing reliable support and an around-the-clock presence. → Stay ahead of pricing and business model shifts. Service-as-software shifts the core business model from seat-based pricing to outcome-based pricing; value is placed on the tangible improvements that AI delivers. In the past 6 months, we’ve heard from hundreds of startups working in this space. After those conversations, we’re announcing the System of Agents 50, which includes the companies you see here. 👇 Full blog in the comments.
Neeraj Bhargava
1mo
We should chat sometime about this.
Karan Singh
1mo
Super insightful , very relatable and I am glad that we are having similar discussions at our workplace. One of our insights to this is : Attaining seamless handoff of a job from AI to Human, is key in delivering a cohesive experience to the other side, in order to deliver a true outcome as a service. Cost model : You charge the customer for the success fee, i.e. only for the job that is successfully done. The complexity of the job decides the rate. No initial upfront cost, only pay per use, to lower the entry barrier. Collaboration (state of union) : Human-Human (expensive, unpredictable, works) , Human - Tools(SaaS) (expensive, complex) , AI-AI (cheap, simple, emerging, unreliable), AI-Human (reliable, flexible, limited) Nitin Dhawal V C Karthic Hitesh Kothari
Sanjeev B.
1mo
What fascinates me most is how Systems of Agents could redefine our approach to value creation - not just by automating existing workflows, but by uncovering entirely new work streams that were previously impossible due to human limitations. As someone deeply involved in the enterprise space, I see the real opportunity lying not in replacing human workers, but in creating AI-native functions that operate at unprecedented scales and timeframes. The shift from seat-based to outcome-based pricing feels like the early days of cloud computing - a fundamental restructuring of how we think about enterprise value. This could be as transformative as the shift from on-prem to SaaS, but with far deeper implications for organizational design.
Sanjay Basu
1mo
Good insights. Quick question - when I read one of the bullets suggesting this to be categorized as personnel cost and not software expense - what are your thoughts ? Is it to do with - - do more with same personnel (personnel cost remains same while outcome may be in multiples) - do more with less personnel ( here personnel cost reduces and outcome multiplies) (little sensitive pitch though on the personnel cost reduction) What are the views ?
Jagbir S Bhatia
1mo
Ashu Garg Thanks for sharing your insights. A few questions remain unanswered - would love to get your take on these. 1. Implementation Challenges: What specific challenges might startups face when transitioning to a System of Agents model, and how can they effectively overcome these obstacles? 2. Measuring Success: How can companies quantify the success and effectiveness of a System of Agents in terms of productivity, cost savings, and overall impact on business outcomes? 3. Ethical and Regulatory Considerations: What are the ethical implications and regulatory considerations associated with deploying AI-driven Systems of Agents, particularly in sensitive areas like healthcare?
Ashu Garg This is a great take on Service-as-software and how a System of Agents can deliver complete work in enterprises (as opposed to streamlining a task). One question - do you see the Service-as-software players of the future being largely software-only firms (similar to today's SaaS firms) but tapping into the labor spend, or do you see a blend of human + AI (somewhere between today's SaaS and services)? In other words, do you see the System of Agents comprising of software agents only or a combination of software and human agents? I am sure there will be multiple models in play here, but would love to understand your thinking.
Edoardo Anselmi
1mo
I would add a section in "In-house Functions" about People Development. In US, a third party 1h e-learning program has an average cost of 6k, while with an agentic platform (like Syllog AI) you can easily create personalized development plans for employees at scale and gather and extracts insights on learning gaps / areas of improvement
Greg Ceccarelli
1mo
Ashu, based on the post and the infographic it certainly seems like "companies know how to grab the opportunity". Or at least they're trying! What's most interesting is _how_ an agentic future gets adopted in the enterprise. And the cultural and systemic challenges that need to be surmounted. Core to my thesis: it won't happen at scale until more robust workflow specific benchmarks are developed that move past the academic.
Enterprise VC-engineer-company builder. Early investor in @databricks, @tubi and 6 other unicorns - @cohesity, @eightfold, @turing, @anyscale, @alation, @amperity, | GP@Foundation Capital
1moHow a System of Agents works. Full blog here: https://foundationcapital.com/system-of-agents/