saved
Obliterate, Don’t Automate
gist
Michael Mignano extends USV’s “obliterate, don’t automate” investment test to AI. Automation makes an incumbent workflow more efficient; obliteration moves expert capability from a gatekeeper to the customer and changes the market’s structure. Because agents make expertise abundant and directly deployable, products can replace the institution that once packaged that expertise instead of selling it better tools. The practical screen for an AI startup is whether success would redistribute power and leave the existing market recognizably different.
ideas
- Test for structural change. A product is obliterative when its success changes who controls the market, rather than only the speed or cost of the existing workflow.
- Follow the expertise bottleneck. AI weakens institutions whose power depends on limiting access to specialist knowledge.
- Move capability to demand. Directly deployable expertise lets customers perform tasks without renting it from an intermediary.
- Judge the end state. Ask whether the market would still look the same if the company worked at scale.
quotes
“Our whole quest has been how to overhaul market structures instead of simply creating efficiencies within them.”
“Instead of renting expertise from a gatekeeper, you can access and deploy it directly. No gatekeeper required.”
“That shift, from the supply side to the demand side, is what actually restructures a market.”
“In each of these examples, if they work, the markets they're in won't look the same for much longer.”