economics
Imported tag from Readwise
economics
But "sell work" is the wrong business model for capturing that opportunity. It sounds like a paradigm shift, but it's actually a regression to the services economics that software was invented to escape. The frontier AI companies already understand this. They sell subscriptions that give customers access to intelligence-on-tap and let the customer
... See moreEvan Armstrong • Don’t Sell the Work
A recent paper out of Ramp, " Payrolls to Prompts ," puts hard numbers on this. Researchers tracked firm-level spending on freelance labor marketplaces like Upwork and Fiverr alongside spending on AI model providers from Q3 2021 through Q3 2025. After ChatGPT launched, the firms most reliant on contracted online labor adopted AI earlier, spent more
... See moreEvan Armstrong • Don’t Sell the Work
As I argued in " Context is King ," the software stack is splitting into three layers: systems of record (databases), point solutions (the interface layer), and a new middle layer — the context layer — that holds the institutional knowledge telling AI agents what to do, in what order, and whether they're allowed to do it. The "sell work" thesis was
... See moreEvan Armstrong • Don’t Sell the Work
If everything is tokens of context in and tokens of intelligence out, where does the pricing power come from?
Not from the tokens. Inference is a commodity, getting cheaper by the quarter, and your customers know it. Not from the "work" — which is nebulous, hard to specify, and invites the adversarial dynamics of every consulting engagement ever.
... See moreEvan Armstrong • Don’t Sell the Work
Professional services solved the quality verification problem not by making outputs easier to evaluate, but by building accountability infrastructure around the producer — licenses, liability, long-term reputation. AI has the capability to produce the output but none of the scaffolding that lets a buyer trust it. It's the most competent worker in
... See moreEvan Armstrong • Don’t Sell the Work
And note what these companies do have that a raw inference wrapper does not: deep workflow integration, proprietary data pipelines, purpose-built UX, and switching costs that compound over time. The production of AI work — the inference itself — is reproducible. The production of AI products — with their context layers, workflow lock-in, and
... See moreEvan Armstrong • Don’t Sell the Work
Harvey AI uses traditional seat-based pricing. It grew from roughly $50M to $190M ARR in 2025, with median seat counts doubling within 12 months, and reached an $8-11B valuation. Cursor uses tiered subscriptions with compute credits. It became arguably the fastest-growing B2B SaaS company in history, reaching approximately $1B ARR in 24 months. Mic
... See moreEvan Armstrong • Don’t Sell the Work
But customer support isn't really "selling work" in the way the argument orginally meant. A resolved support ticket is a binary state change. Did the customer's problem go away? Yes or no. The outcome is measurable not because the "work" is well-defined, but because the absence of a problem is well-defined. Attribution is unambiguous: the AI either
... See moreEvan Armstrong • Don’t Sell the Work
Sierra AI grew from roughly $20M to $150M ARR in about 15 months, charging ~$1.50 per resolution. Decagon grew from ~$6M to ~$35M ARR using perconversation pricing. Intercom's Fin at $0.99 per resolution drove 40% higher adoption. The only other prominent case study I could find is legal tech firm EvenUp which charges per brief generated, but even
... See more