Also had a great conversation with @SMBderek about AI adoption in accounting firms and something I’ve been thinking a lot about lately. You can give your team all the AI tools, agents, skills, and applications in the world, but if you can’t change behavior and get people to actually use them, what’s the point? You’ve just spent a bunch of money. There’s a strong argument that the cultural and behavioral shift is even more important than the technology itself. One thing I really liked about Derek’s approach was starting with the problem and working backwards. Find the constraint or bottleneck in your business, figure out what’s causing it, and THEN determine whether AI can help solve it. In accounting firms, that bottleneck is often at the partner level. Reviews, decisions, and approvals all pile up waiting on the partner. If you can solve that constraint, the ROI could be enormous. I think that’s a much better approach than building a bunch of cool AI tools that ultimately don’t move the needle. Really appreciated Derek’s perspective. Lots to think about as we continue down this road! 3/3 🧵

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Here s why Greg is wrong, from someone who bought, grew, and sold one of these: Nobody running of these is dumb, and the fact that they've survived is testament to the fact that they're smart. To me, baked into this strategy is a sense of paternalism. Look at these dumb boomers. I can come in with absolutely zero industry experience and a Claude Code subscription and change this industry!! The most pervasive dynamic within Main Street businesses is resource scarcity. Not enough time or money to do any of the million things that you plan to. Awesome, so you want to do some big Claude Code thing? Cool, you're going to need to find time to do that between figuring out how to repair the trucks, fix your broken Google My Business listing, and not take a salary that month because of the reinvestment you're making with the hope that it will pay off. Getting a CRM implemented correctly is hard enough!! You need managers who enforce the process, employees who change their habits, and someone accountable when things break. Now try rebuilding delivery around AI WHILE KEEPING THE BUSINESS ALIVE AND SERVICING DEBT. You come in full of piss and vinegar and on day four your operations manager quits because she liked doing things the old way, and suddenly you’re covering her job instead of building agents. Greg acknowledges key-person risk, but it deserves far more weight in his economics. The people, process, and change management required to make even basic technology productive can consume years. Innovation has to improve the performance of the whole business. Justin Roff-Marsh and I have discussed the sequence: identify the constraint, get more productive use from its existing capacity, then add capacity where necessary to increase throughput. Said another way ---If an accounting firm’s bottleneck is senior review, generating drafts ten times faster may just create a bigger queue. You have to show how AI frees the reviewer, change the workflow so that capacity gets used, and then upgrade whatever limits further growth. Technological innovation must drive global maxima, not local maxima. Even real savings elsewhere need to be converted into lower expenses (which is only weak replacement) or redeployed against the constraint. A list of automated tasks tells me very little about how much more profitable work the firm can complete. Now put a large, expensive acquisition loan underneath that transition. In the SBA buying range, debt payments compete with the money you need for implementation, training, replacement hires, and additional capacity. Saving people time doesn’t automatically remove their salaries. Your plan is to do what? Have Betty train you in the first three weeks to replace her, and then you're gonna fire her. Let me know how that goes for you with a big ass loan due every month. More than likely you're going to end up keeping Betty and adding a bunch of AI expenses, which are going to reduce all of your fancy pre-acquisition projections. You can spend months paying for the existing payroll, new software, and human review before realizing any savings.... If at all. And cutting a support role can make your scarce, expensive specialists less productive if they inherit its work. Ultimately a playbook like the below is achievable but requires an enormous amount of experience, judgment, skill, etc. And the idea that a corporate refugee is going to parachute in out of their W2 with a couple agents and transform a business model fundamentally feels like something that someone who's never tried to do it before in a real business would say. I'm happy to have this debate with anybody who'd like to have it. I've both owned these businesses and built agents in an enormous number of these categories referenced.

Great thread, I’ll add some thoughts: 1. Pricing in the US is completely absurd. The link between pricing and value is entirely broken. Extremely mid hotels are hundreds of dollars a night; the average price for a new car is $50,000; really nothing feels like a deal. When you go out to eat, just assume you’ll spend $100 minimum. One of my personal benchmarks, Fage 5% Greek yogurt used to be $4.50 per tub back in 2019. Now I spend $7.80 2. Major cities are worse than they were a decade ago. Things have improved relatively since the nadir, but only relatively. There is still real, noticeable, quality of life decline in most urban downtowns. 3. Ubiquitous pot. You smell it everywhere now. 20 years ago, you’d usually encounter somebody smoking. Today, the cigarettes are largely gone, replaced by marijuana. This is not an improvement 4. Asian culture is much more prominent, from music to cinema and television, books, food, and the list goes on. 5. Airports have generally improved. This might not be saying much, but it’s true, with certain exceptions 6. Politics is much, much, worse. 7. Food is much better. The millennial food revolution is taken for granted, but I grew up before it in the 1990s and I remember the old world. Eating isn’t everything but the embarrassment of riches we now have is still underrated. You can get high quality food and drink almost anywhere now. That’s a major quality of life enhancement, even considering the prices. 8. There’s a broadly shared sense that America’s best days are behind it. A sort of background pessimism - on both the left and right - that shapes everything. Even in the optimistic corners of our society - Silicon Valley, say - the ambition primarily appears to be to escape the US - and the nation state itself, and even humanity - rather than to improve the country itself. Political ambitions are backward rather than forward looking. 9. Suburban amenities are significantly improved. If America’s major cities have mostly changed for the worse, America’s suburbs have changed for the better. Essentially all suburbs now have these “mixed development” zones where if you blur your eyes slightly you can (sort of) imagine you’re living out a fantasy of life in Greenwich Village or Manhattan. They’re walkable (though you have to drive to get to them), there’s clean play areas and green space for kids, a good variety of shops and breweries and beyond third wave coffee places and the like, and - because these are invariably private and because they aren’t connected by public buses - there aren’t any of the urban quality of life issues to deal with. The public has clearly woken up to this; all these places are absolutely heaving with people, even during the week. 10. The proliferation of conspiracies and apocalyptic thinking 11. The normalization of scams and “get yours by any means necessary so you can escape the permanent underclass” type thinking. 12. A much degraded intellectual environment. Politics is one facet of it, but there are many others. For example, the recent Nolan interview in China that’s gone viral on here this week. Odyssey discourse has been heavy for over a year in the US, but the relative quality of this interview is so much higher than anything we’ve seen so far. As a comparison, think about that execrable Wilson piece in the London Review of Books - ostensibly a highbrow prestige publication. The difference is honestly embarrassing, and synecdoche of what I see generally: for example, in academia.

If they really start to gatekeep who gets to use the best models, that is a declaration of war. This prospect fills me with the most sincere, bodily cypherpunk will-to-power that I've ever felt (at least since I was a teenager). If they really go down this route, I would go all-in on building the most psychotic swarms of open-source models and fine-tunes possible, all geared toward a Chaotic Good jamming of the entire institutional public sphere. If we didn't do that, all of political life and the marketplace of ideas would be over before we know it. It's one thing if the top models become too expensive for me or others to use (I'm already pricing that in, and if you can't build something profitable enough to climb that ladder as it gets pulled up, then that's fair enough). But if the ladder gets pulled up politically, now, so only select institutional players get access to the most intelligent models, then any mature American man should be as energized as gun collectors are around the 2nd Amendment, or liberal women are around Planned Parenthood.

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