AI is eating B2b software (in a good way)

This morning, I woke up remembering Archimedes: “Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.”

The software technology has been built with technology breakthrough levers pivoting on the ever-growing fulcrum of overall technology capacity. Each lever allows the industry to lift ever greater objects with ever greater ease, creating larger markets for all. A few very impactful levers come to mind, including:

• • Windows

• • Protocol standardization (TCP/IP, HTML, SSL, etc.)

• • Smart Phones

• • Broadband

• • Cloud infrastructure

• • SaaS

Numerous potential levers, including crypto, decentralization overall, and VR, have also received significant investment but have not yet delivered world-lifting ease.

We believe that AI is a lever that will leap the shark and take its place as one of the longest and most impactful levers, especially for B2B software. The technology industry has done an amazing job creating, storing, and calculating data (thanks to Moore’s law, etc.). However, understanding and acting on the data has been largely left to humans (sometimes assisted by algorithms, as in Search and Social Media). Yet humans are rate-limited in our I/O devices, storage, and processing capacity. We also get bored easily and tire of tedious tasks quickly.

AI can act as a new lever, lifting the burden of data analysis and decision-making from human shoulders and onto machine learning algorithms. This will enable faster, more efficient processing and insights, unlocking new opportunities for growth and innovation.

Like those last two sentences, written by AI for me, as my brain stalled for a minute. We are still just barely across the starting line in this race. Today, AI is very good at quickly collecting and generating inferences from huge quantities of data. AI never gets tired or bored.

The best B2B software companies are using this AI Lever to attack business problems previously too intractable for humans to solve at scale. Our portfolio company, CivicIQ, utilizes AI to scrape local government websites, listen to online meetings, and read PDFs to build a definitive, structured database of local government spending. This problem was intractable at scale with humans (too slow and costly). While the AI platform vendors focus on generalized intelligence, B2B software companies are applying these technologies to specific vertical markets and business data sets to bring new intelligence to specific functions or industries.

Last week, we were the first investors to back the founders of procurable.ai. Cofounders Ali Oztan (CEO) and Cansu Saracoglu (CTO) perfectly combine deep business problem knowledge and strong technical background to build this specific product for this specific market. They are building an AI intelligence layer on existing supply chain databases. Ali is a mechanical engineer turned MBA turned rocket engine supply chain procurement leader (literally a rocket scientist). He and Cansu have worked together before. She has built multiple AI/ML systems. I met Ali as part of our new outreach program high quality to “stealth” founders that may be building in areas of our thesis (yes another AI tool I wrote). They both have had exits and were busy building the product and not actively raising capital. Ali and I hit it off. My thesis on reducing friction in B2B software resonated along with my CEO background and ability to connect them to larger investors, so he agreed to let us be the first outside investors.

Speaking of AI’s ability to make sense of lots of data, here is what Perplexity.ai says when asked, “What does Procurable.ai do?”:

Procurable.ai is a powerful AI-based platform revolutionizing business procurement operations and supply chain management. It offers a suite of smart tools and features to streamline various procurement processes:

1. 1. Vendor Onboarding: Procurable.ai simplifies and accelerates vendor onboarding, reducing time-to-RFQ and ensuring compliance, enabling businesses to stay agile.[1]

1. 1. Order Management: The platform automates order follow-ups and facilitates real-time interactions with suppliers through its generative AI framework, ensuring seamless coordination and timely deliveries.[1]

1. 1. Get Quotes: Procurable.ai‘s “Get Quotes” feature leverages an extensive network of trusted suppliers to simplify sourcing components and finding the right supplier.[1]

1. 1. Interactive Reporting: The platform provides interactive reporting capabilities for data-driven supply chain management.[1]

1. 1. Conversational AI: “Ask Procurable” can interact conversationally, managing supplier data and answering queries about supply chain processes.[1]

1. 1. Spend Analysis: Procurable.ai offers advanced spend analysis to detect overspending, bulk purchase advantages, and renegotiation opportunities, yielding significant cost savings.[2]

1. 1. Risk Mitigation: The platform monitors supplier risks, ensures proactive risk management, and meets regulatory standards.[2]

Procurable.ai aims to revolutionize procurement operations by leveraging AI and automation, enabling businesses to optimize their supply chains, reduce costs, mitigate risks, and drive efficiency.[1][2]

Sources [1] Procurable – – https://procurable.ai [2] Procure Ai: Augmented Procurement https://www.procure.ai [3] Companies Should Ask These Risk Questions When Procuring AI … https://news.bloomberglaw.com/us-law-week/companies-should-ask-these-risk-questions-when-procuring-ai-tools [4] A practitioner’s view of AI in procurement – Are we there yet? https://spendmatters.com/2024/05/22/a-practitioners-view-of-ai-in-procurement/ [5] Blog – Procurable – – https://procurable.ai/blog/

Not bad huh?

The AI Lever is already a huge lever for VCs and is already today delivering a step function improvement in B2B software. And we are just beginning.