In a recent edition of my other newsletter, The CS Architect, I wrote about the new role that AI-enabled insights suppliers will need to win and retain clients. While that piece approached the topic from a distinctly CS point of view, there was a comment I made that has been on my mind for a while.
One piece of advice I give to my advisory clients is that, to paraphrase Clayton Christensen, clients are not “hiring” market research to learn: they are hiring it for reassurance.
I have spent a lot of time over the years thinking about the “job” that insights buyers hire suppliers to do. There has been a lot of fear in the industry especially given the in-roads that technology has made.
Will all this tech make researchers and what they provide obsolete? Am I going to be out of a job?
And yet, for all the fears we had about Google doing surveys, or DIY platforms “democratizing” research (or bestowing great power to the unwashed hordes, according to some), the reality is that these research platforms still only account for a scant percentage of the industry’s revenue.
Why?
I’m convinced it’s because suppliers only partially understood what buyers are actually solving for. Buyers are in the business of making decisions. Yes, they want to make good ones. But the insight is never the end; it is only the means. And it is conditional on two things, which, today, are delivered by humans.
One of these conditions it that the output must be good enough. Notice those words.
The other condition is that any solution must fit how their business works. Concretely, this means that if they have to build a team of people to use the tool, then the supplier is no longer selling a product. It is selling a business transformation.
So what about AI? Could AI-powered platforms finally be good enough to meet those criteria and deliver insight at scale, with fewer or even no humans? Because simply automating research is, provably, not good enough.
If AI is going to make insights truly SaaS, it has to replace what the humans provide. And that changes how businesses and products need to be built.
My latest ebook, AI and the SaaS Mirage: What Founders Should Build and Investors Should Back, explores why a DIY/SaaS transformation has failed to take meaningful root in market research, and what platform growth and scale actually require.
It’s explores why products don’t always succeed on capability alone, why service often wins the day, and what business and operating models are needed. I also specifically look at the growing use of AI and at the two emerging operating models of AI-forward companies.
If you’re running a SaaS business and you’re wondering why your growth has stalled—why adoption isn’t happening as expected, why customers aren’t renewing, why expansion is harder than it should be—this book will help you see the real problem. And more importantly, what to do about it.
If you are an investor in the sector, you will have a clearer understanding of how firms create and unlock value with clients, and how to minimize deal risk by recognizing whether a target company is truly a SaaS business or a tech-enabled service business.
If you’re looking for more perspective on this, or help for your own company, please get in touch.