Your Business May Be Disrupted Sooner Than You Think
“By next year,” says Alan Pentz, “we’ll start hearing about PE plays rolling up traditional businesses and implementing AI to strip out massive costs. That will be the first wave.”
Good Morning!
Editor’s Note: The Morning Report will not be published on Thursday, which is Yom Kippur. It will return on Friday.
Today’s highlights:
Here’s how a 25-year-old startup founder is trying to disrupt the legal industry.
Yes, the government has shut down. Air-traffic controllers are expected to work without pay.
Even Mark Cuban thinks it’s smarter to build the business first and then raise money.
“I probably talk to LLMs like 10 times more than I talk to people,” said Jake Adler, 21, founder of defense biotech startup Pilgrim.
ARTIFICIAL INTELLIGENCE
Alan Pentz says an AI disruption wave is coming for small businesses: “For the past year, I’ve been coaching business owners on AI adoption and building tools to help them implement it. My estimate? Only 10 to 15 percent will succeed. I didn’t start out thinking that, but reality has a way of educating you. Here’s why—and why this matters more than you might think. Most owners are drowning in operational reality. You have existing processes, legacy systems, teams to manage, and competing demands pulling you in 12 directions. This infrastructure—the very thing that made you successful—has become an anchor.”
“Meanwhile, I now run agent systems that automate 15 different tasks I used to do manually. What took me 10 hours now takes three minutes. Here’s the scary part: some 25-year-old with 35 tuned agents is already working on recreating your entire business model. No legacy systems to migrate. No team to retrain. No ‘but we’ve always done it this way.’”
“By next year, we’ll start hearing about PE plays rolling up traditional businesses and implementing AI to strip out massive costs. That will be the first wave. I’m already hearing about it anecdotally, but by next year we’ll start seeing proof.”
“The PE wave will come from the top down, but soon after, you’ll see that 25-year-old with 35 agents coming from the bottom up. How long will this take? I don’t know, but here’s my guess: You have a one to two year window right now to make unreasonable profits with AI. The tools are good enough to earn multiples of what you did before at almost no additional cost.”
“After that window, non-adopters will be mowed down—first by PE, then by disruptors coming up from the bottom. Within five years, entire industries will be radically altered.” READ MORE
Here’s how a 25-year-old plans to disrupt the legal industry: “Legora develops AI software to help lawyers save time on repetitive tasks like document review and contract drafting. It integrates into everyday tools like Microsoft Word and allows users to analyze thousands of documents at once, conduct in-depth research across databases, and write and edit contracts as part of their daily workflows. Co-founded in 2023 by 25-year-old Swedish entrepreneur Max Junestrand, the startup touts 300 law firms as customers including Cleary Gottlieb and others, and has grown to 100 employees.”
“A Y Combinator alum with no legal background, Junestrand started out by interviewing some 100 lawyers to learn more about the inner workings of the profession. He would send LinkedIn messages to lawyers, asking them to meet for lunch and offer to pay them their hourly rate, Junestrand said during a recent podcast.”
“Because of the sometimes tedious and repetitive nature of legal work, law is quickly becoming an area of massive opportunity for new AI companies. A 2023 Goldman Sachs study estimated that 44 percent of legal work could be automated. Even though AI was expected to impact low skill jobs, fields like programming, law, and medicine have become the test bed for AI tools with the promise of reducing workload and increasing efficiency.” READ MORE
