Services: The New Software

In a Sequoia Capital essay, Julien Bek argues that AI businesses can sell completed work directly to customers. A customer buying a finished accounting task, for example, pays for the result; a customer buying software still needs someone to operate it. Under this model, better AI could reduce the provider's cost of delivering the service.

The essay favors starting with work already outsourced. The buyer has accepted outside delivery, allocated a budget and defined an outcome, so adoption can begin as a supplier change. It also identifies a conflict for today's AI copilot companies: selling completed work means cutting out the professionals who are currently their customers.

“The next $1T company will be a software company masquerading as a services firm.”

Julien Bek

“If you sell the tool, you’re in a race against the model. But if you sell the work, every improvement in the model makes your service faster, cheaper, and harder to compete with. A company might spend $10K a year for QuickBooks and $120K on an accountant to close the books. The next legendary company will just close the books.”

Julien Bek

“For every dollar spent on software, six are spent on services.”

Julien Bek

“Replacing an outsourcing contract with an AI-native services provider is a vendor swap. Replacing headcount is a reorg.”

Julien Bek

“The US has lost roughly 340,000 accountants over five years while demand has grown. 75% of CPAs are nearing retirement, the licensing path is long, and starting salaries lag tech and finance.”

Julien Bek