We Fixed It. You're Welcome.

Aaron Wolpoff [0:14 - 1:30]: All right, here's how this works. In each episode, we pick a company we all know that has something going on right now. Then we put ourselves in charge and see if we can fix it. You'll be hearing from Melissa and Operations Chino on people and culture and and me on marketing. My name's Aaron. As always, a quick disclaimer. We are going into this somewhat cold and nothing we say should be construed as legal advice, financial advice, or anything that would get us in trouble. These are our views and opinions. We're here to ask the kinds of questions everyone's thinking, have an engaging conversation, and maybe come to some conclusions that we feel are worth exploring by the end. If We Fixed it. You're welcome. All trademarks, IP and brand elements discussed are property of their respective owners. Welcome back to We Fixed It. You're welcome. Before we fix what we're about to fix and then pat ourselves on the back, we want to thank you. First, our listeners. Whether you're a fixaholic or just tuning in for the first time, we appreciate you for getting the word out. We just launched in December of last year and our little podcast is about to hit 10,000 downloads and we're on the charts. So you must like what we're doing, which is what we're hearing, and we'll keep giving you more. In addition to your regular fearless fixers, Chino, Melissa and myself, we have a financial expert who'll be joining us and I can't wait to introduce him. But first, Melissa, tee us up. What are we going to fix today?

Melissa Eaton [1:30 - 2:02]: Well, today let's jump into another hot topic. We don't seem to shy away from those. And that is is AI killing SaaS as we know it? What better company to focus on than Microsoft, who's known as a trailblazer in both SaaS and AI, making it an ideal focal point and subject for this discussion. The panelists, including our special guest panelists, look forward to talking about this and we will work on how we would fix it. So, Aaron, please introduce our special guest today.

Aaron Wolpoff [2:02 - 2:14]: Yeah, let's. Let's meet our guest. With the. With the financial take on all this, we're joined by a venture capitalist and investor, Daron York of cityside Ventures. Daron, will you take a minute to introduce yourself and let our listeners know who you are?

Melissa Eaton [2:14 - 2:15]: Sure.

Doron York [2:15 - 2:33]: Thank you for having me. My name is Doron York. I'm the CEO of cityside Venture in Birmingham, Michigan. Created Cities Adventures six years ago. Seven and we investing in early stage startup companies. We have about 75 companies in our portfolio, all tech based, scalable tech.

Aaron Wolpoff [2:33 - 2:44]: Thanks, Daron. Great to have you here. And I know you have a lot to say about AI and SaaS and the business model disruption. Not to get ahead of ourselves, but Melissa, tell us what we're going to get into.

Melissa Eaton [2:44 - 4:00]: So just a little background for us. In today's episode, we're diving into a topic that's revolutionizing both technology and business. Microsoft at the intersection of SaaS and AI. Why Microsoft? Well, because it's not just a tech giant, it's a pioneer. From dominating traditional software with Windows and Office to transforming into an innovation powerhouse. Microsoft has led in the shift to SaaS with Microsoft 365 and is now redefining productivity with AI tools like Copilot, its partnership with OpenAI and the Azure AI platform. So Microsoft's journey from software king to AI leader offers a blueprint for the future. But with innovation comes big challenges. How do businesses adapt? What happens to pricing models and workforce challenges and strategies? And how do we ensure AI drives value without leaving gaps? So today we're going to try to unpack some of these questions, offering insights for anyone ready to navigate this revolution. We whether you're a tech enthusiast, business leader, startup leader, Dora, and this conversation is for you. So let's dive in. And who would like to start? I don't know. I can pick on someone too.

Doron York [4:00 - 4:01]: Pick on somebody.

Aaron Wolpoff [4:01 - 4:02]: I'll pick on you.

Melissa Eaton [4:03 - 4:14]: I'd love to know how you think AI will disrupt the SaaS business model or will it enhance it? What's your thoughts and what have you been hearing from especially tech startups?

Doron York [4:14 - 4:23]: Well, the great question, we actually we're running our own podcast. We have an X which is spinning. It says stop, start over.

Aaron Wolpoff [4:23 - 4:24]: We're losing your audio.

Doron York [4:24 - 4:29]: It tell me that the recording stops. If it stops or should I keep going?

Aaron Wolpoff [4:29 - 4:32]: No, keep going. But your, your audio is cutting in and out.

Melissa Eaton [4:32 - 4:33]: Yeah, start over again.

Doron York [4:33 - 5:15]: Okay, so we're doing a lot of investigating and research into the AI space and we're running an episode next week about AI with one of the local experts. It's a great question what you brought. I have a different perspective about AI. If you look at the history of from the Internet to when the World Wide Web got created and then after that we went from software, they have to buy software license to SaaS model. And then blockchain came to the market and everybody said here goes the traditional data. Now everything going to be based on blockchain and blah blah, blah. And now AI. So I think before we even get to the end.

Aaron Wolpoff [5:16 - 5:22]: I'm sorry, I got to stop you. Your audio keeps cutting in and out and if there's a setting you can change. But I don't want to. I don't want to waste a good question.

Doron York [5:22 - 5:27]: Okay. I have a strong signal on my wi fi, so I don't know what's going on. Can you hear me?

Aaron Wolpoff [5:27 - 5:28]: Yeah.

Doron York [5:28 - 9:11]: Okay, so what I'm saying there's a lot of. First we need to understand that there's a lot of hype around AI right now. Question how much of this hype is actual real and how much it's just the enthusiasm from the tech guys and the venture capital guys are jumping and everything and everything around the sun. First, we need to defy. Defy artificial intelligence. It's actually an oxymoron statement because the one you say artificial intelligence, which is you pointed, it's not real, it's artificial and defy intelligence. So some say intelligence, true intelligence is going to come only when it's going to be a free will involved so that the system will make their own choices without the human telling him how to make choices. So I think it's a lot of hype. I think it's going to impact a lot of areas in life not in the speed that people think it is. I think it's going to be like anything else. After the hype, it's going to be kind of adoption and then it's going to settle and then it's going to be part of every day's life. Would this impact certain industry and the way that using AI sure is. Again, I don't think it's a short process. I think it's going to be a long term process. Two things missing in the AI world right now according to our perspective. One, you remember what made the Internet. The Internet as we know it is when they invented the TCP IP protocol, the IP address. When this protocol came, the Internet become the superhighway. Now everybody had the IP address and suddenly boom, everything exploded. The same mechanism or the same principle of the same protocol, if you will. Still not being invented for AI the moment it will, it's going to settle everything together. And then the second thing is the regulators, we don't know how the regulator is going to get into it, to what degree. We already know that in the U.S. for example, they limited the use of medical decisions in other places. So, you know, we need to look at different things. So is this going to kill cess? Yes, but not in the short run. It will Take another cycle of about five plus years until it will introduce a new model. SAS still going to be the prime model right now. If I need to invest in technology that going to be the result is going to be five, six years down the road. I should take it into consideration, but I don't think it's an immediate thing. SaaS actually being challenged not by AI, funny enough. SaaS being channeled in my opinion by the model of the young generation that they. It's almost like I want to pay as I use it instead of subscription. I think there's a bigger impact on cess than AI in this point. And then remember that AI is still missing the false positive into it. So you don't know if what you get is real. You don't know if it's credible information, you know what it's coming from. So it's, it's, it's actually I hear a lot of people that says we prefer to go to the traditional investigation process and information instead of using AI because it's more risky that we get something incredible in AI versus Google or something else. So to answer your question, different way it's going to impact SaaS but it's not going to impact SaaS the way that tomorrow it's all going down the tube. It's going to take some time to replace SAs models in SaaS models. It's funny, according to Forrester, 60% of the people that on SAS model one way or another saying that they're not using more than 50% of what the subscription actually allow them. So they say I don't want to pay for it if micro insurance and micro benefits. This is the model of the future that I want to, I want to be in a system that I pay as I use it, not paying because I have a subscription to it.

Melissa Eaton [9:11 - 10:38]: So yeah, I think you bring up some really good points because I do believe that AI tools won't necessarily replace traditional SaaS platforms like you said, but will complement them. And that's what really the tools are most likely trying to do right now. Not replace but enhance functionality, making platforms smarter, more predictive and adaptive. And then that foundational infrastructure of SaaS remains essential. It's just how the usability and the tracking of that. So that would be something that we should also get into is like those pricing models, subscription models like you said, those are really important things. And I do think that obviously we've talked about AI and other or you know, in other, in other podcasts, but in episodes but the challenges that arise when Integrating something into something traditional that already exists is really not just around the data silos. Lego legacy system, you know, compatibility. Oh my gosh, I'm having trouble speaking today, but it's really about the resistance of change. And so Chino, like that's a big thing, is that like you see some of these more traditional teams and traditional customers and traditional companies resisting change. And Microsoft seems like they're trying to get ahead of that. But tell me what your thoughts are from a people perspective.

Chino Nnadi [10:38 - 13:22]: Yeah, I think Doron and you both, Melissa, bring up a really good point because when we look at like the word artificial intelligence, right, to me AI is a tool. It should always be a tool. People are so afraid that AI is going to take our jobs. That is not going to happen. It's going to help enhance our jobs. I think Microsoft is doing a really great job as they have in the past, being those leaders, those visionaries, the pioneers to set forward. But to your point, Doran, when it comes to regulation, certain sectors, when you look at SAS as a whole, it became very popular when there was vertical SaaS, meaning that SaaS subscription as a service moved into niche markets. Vertical SaaS became really big. And so you have different products for different things. And Microsoft is one that has become a catch all. And so with AI, if AI is a catch all and we're not really sure what information is going where and what, and we can't really trust that. To your point, Melissa, is like, how do we get people to trust in the SaaS that they're using, the AI that they're using as a tool? Because if we're saying it might not give you all the information, how do we kind of fine tune that? And so I think of looking at vertical AI, so niche focused AI within SaaS will be really important. So when it comes to the medical field, right, Like I, you know, don't want to, you know, share if I'm doing my taxes, I don't necessarily want like my number, all of my data, my business or whatever to be there or there's other personal data as well, because we don't really know and trust. And so I think what Microsoft will need to do is build a tool within their AI to help kind of the mundane tasks. So organization, setting things up, allowing people to realize kind of the other 50% of that service that they're not really using will be helpful, right? So that it builds that trust to then continue to use. And then we can get a little bit more niche focus, have more of a vertical AI within that space. So I think that will be really important moving forward for Microsoft. I do think AI within Microsoft and SaaS is going to be a tool. I don't think it's going to kill SaaS. It's only going to enhance it, like most things, but it's just how we use. And I think it's going to take some time to figure out what that looks like. And I think any business, if you're going to move into the future, you need to start thinking about what that looks now so you can get your customers, your clients, your base to learn how to use it in the way you need to so that it can get adopted.

Doron York [13:22 - 13:22]: Yeah.

Aaron Wolpoff [13:22 - 15:06]: And I think we're moving into what I'd consider the third phase of software development. Right. Like it started out, you'd go to a retail store, you buy software in a box. Maybe early adopters would get it from a catalog or, you know, a mailing list or something and get a floppy disk. But most people have the experience of, if you're of a certain generation, you go to the store and you, you pick up your office or Photoshop or whatever it is. That's, that's wave one. Wave two is, wait a minute, I can't buy the, the, the box edition. And that's going to serve me for the next five years. I've got to pay this monthly subscription license fee, which we've come to call sas. That was the next wave business model. But then this third wave of AI, it almost, you know, it has the potential to decouple the user from the software and go anywhere. You could argue Iot also. Right. Like if you can use your product or your brand, touchpoint on a refrigerator or smart speaker, you know, that's kind of a bridge situation. But now we're in the fact where, you know, if Microsoft's creating these agents that can make decisions for you and carry from one application to the next, or be almost headless where you, you know, you access it where you want to, is how do you even know you're interfacing with Microsoft anymore? Like, what's, what's the value that that brings? And you know, from, from one company to the next, how do they play in that space? And Durant, you're saying, I think, I think everyone's building the highway right now. Right. They're building the tracks and laying down the foundation. But do they know what they have with all this investment? It's not just Microsoft that's a big player. But do they know what they have or are they just building for the future.

Doron York [15:06 - 17:57]: No, it's not only that. It's very similar to what's happening with the EV market right now. We in Detroit and Michigan. So when Tesla took the electric vehicle market to a whole different level, everybody got in and motor got into it. GM and Ford and crisis and callous, I mean they all got, they're all making a lot of EVs. But then to realize the infrastructure is not there, the adoption is not there, you know, there's no charging station around the highway, there's a problem with the batteries, the problem with distance, the problem. So now everybody's scaling back and say, oh, wait a minute, we need to rethinking. So with AI, there's also an element that I believe in the next few years, at least in the short run, we're going to see AI as a utility, which means that you have a SaaS model. If it's Salesforce or if it's something else, they will implement AI as part of the offering to make it faster, better. So instead of using the mouse and click and buttons, I can talk to the system or if I need information, instead of going and check 27 menus, I can say, hey, Salesforce, give me the sales report for last month and boom, it's going to happen. So it will start by implementing as a utility, but, but until AI going to be an independent entity that can really manage the world, we are 20 years away from it. Until we're going to have the quantum computing become mainstream, it's not going to fly because it requires so much computer power, so our regular computer cannot handle it. So when you have supercomputer or quantum computer as a mainstream and then it's going to expedite the process. But we went from AI as a, as an application to an AI as a platform to a vertical AI, now it's a gentic AI, tomorrow it's going to be something else. We don't know yet. I don't think any of them are right and I think all of them are wrong. So it's like, you know, we don't know yet. We see some area that AI can be a big benefit for. When you search for information, there's some research, you're looking for some stuff, it can help you sort through many things. But the question again, do. Right now we're using a lot of AI tools in our due diligence process on companies and we're running them in three different AI platforms simultaneously to see the gaps in information. And there is a gap. So you know, it's, it's a challenge. So we, we're not building the superhighway now. Everybody get excited to building the next shiny product based on AI, but they all forget that the infrastructure is not there yet. So we'll end up with all those tools and all this great development that they have. No way to go with it because there's no supercomputer that can run the what you need. So yeah, GM announced that they building their own AI engine internally in the company but they, they waiting for the supercomputers to because they're not going to be able to process the amount of data they have in a company and a regular computer network. So it's like, it's insane.

Melissa Eaton [17:57 - 19:59]: Bring up the integration challenges because I do think that like the infrastructure that we have is, to your point, not what is going to be able to support that future of AI. I think that currently to your point, there are ways in which AI dramatically enhance, for example, operational efficiency. So you'll see there's that automation of repetitive tasks, reducing the human error. And I've seen that in businesses that I've worked in and that is really great from a customer experience perspective because it accelerates response times. You're getting more consistent resolution to your issues. Like in customer support, for example. Most of us are participating in a relationship, whether you want to or not, with AI powered chatbots and virtual assistants to help handle common inquiries, also allowing for availability 24,7. But there's always a need for that. Well, in today's world that human assist to tackle more complex issues. And I think Erin, you kind of talked about this a little bit with the trust issues and how to personalize the responses so it feels like something that you feel like this is somebody I can trust. And I think it's interesting and maybe Aaron, your thoughts on this. But like when you look at for example what these big SaaS companies are calling some of their AI integrations. So for example, Microsoft has Copilot, which is, you know, another. It's a leader, you know, you feel like, okay, safe with a pilot. Salesforce has Einstein. Right. And you know, I think Adobe is called Sensei or something like that. So Erin, what's your thoughts about how to brand this so that you can take the fear away from the customer base as well as like how do you, you know, integrate all of the challenges that are, you know, for the long haul? Because this is something that everybody's hot on right now.

Aaron Wolpoff [19:59 - 21:50]: Yeah, about seven, seven or eight years ago I wrote, I wrote A little treatise on a paper. And I, I called it a bottom. You know, I didn't have a word for it. So I thought, you know, there's going to be a bot, which is like a digital self, right? Because once you, and now with AI, you start feeding these applications and training them and saying, speak the way I speak, it's going down. Maybe we're, you know, 10, 20 years from it, but it's getting to the point where you could maybe, let's spin the future story, have a digital kind of footprint or replicant, right? Who can think like you, make decisions like you, and then you can start to trust it to make purchases and set it on, you know, if it's your co pilot, if it's, if it's someone that you've, you've fed enough information, you can say, you know, from a business perspective, make, make business decisions for me and I'll stand behind what you do. If it's more from a consumer perspective. I love concerts. I love sitting in the front. I just, you know, and my, my digital self bought me some concert tickets while I was sleeping and spent my money. I'd say thanks. So I think, you know, it's trust and familiarity, right? So do the, the trust part comes with, do you know who I am? You know, as a professional, as an individual, can you reflect back with accuracy the kinds of decisions or kinds of, you know, thoughts, thoughts that I'd be having and can you replicate that for me in areas that I can't do myself? Because it's, it's tedious, it's repetitive, it's, it's, it bogs me down. That's where you would, I guess, create maybe a brand preference or a loyalist preference from one company to another. But, you know, I'm curious, like, until we get to that point where there's a polished product to attach yourself to and we're in this incubation phase or sticky phase. What's that like from a company perspective? Like, how do you keep momentum going?

Chino Nnadi [21:50 - 25:27]: And I want to touch on two points that you mentioned and also you too, Doran. So I think we're a lot closer to this stage because Nvidia actually a few weeks ago, shout out to Nvidia, who's been really pushing the game. Obviously that has been shaken up a little bit in the last coming weeks. But they, the CEO introduced a new supercomputer. I think it's like $3,000 that has the processing power to do that. Right. Again, like if you think back to, you know, a Mac 15, 20 years ago. They were huge, chunky, but they had the power, they were expensive. I think Leo's at a time where it was a little more consumer friendly and like budget friendly for everyday person. And so I think we're a lot closer to it being used in the day to day. And I think, you know, looking at a background in terms of behavior and again went to school for psychology and you know, understanding behavior and the whys. And Aaron, you bring up a really good point when it comes to the brand and understanding yourself. And so it's really important for Microsoft right now within their sat, like within sas, is to figure out, and this is that testing, this is that Q and A period where they're, you're doing a lot of research to figure out what do your customers want. There's been thousands and thousands of inquiries, troubleshooting. Anytime there's a problem, there's a bot asking you something, you have the data, right? So using the power of AI and the power of even having human eyes look at it and analyze that to figure out what do our, what does our team, what do our customers want here? Because if the second you figure that out, and again it doesn't need to be, you know, you're thinking for me to be honest, again, when you look at certain tools like Adobe where you talk about design, right? Those people get paid for their designs, their intellectual property. I don't want AI necessarily to take exactly who I am, right? Because then it becomes into the system and then okay, cool. How do I differentiate myself? How do I capitalize off of that? I'm just giving it to Microsoft, who again is a billion dollar company. But what I would love Microsoft to do is make my life easier in my day to day. So maybe that's, you know, defining things, summarizing certain notes, having access to it. It's really about from the beginning having little ways to kind of build that trust. So you think about, you talk about purchasing power ta buy me, you know, restock my toilet paper, you know, it's going low. We've started seeing that. And I think Microsoft and other SaaS companies need to start thinking about, okay, what are ways that we can slowly bring in and build this trust. Because personally I don't want AI to you know, take all of my intellectual property and you know, teach their machine and teach their robot. But what I would love a robot to do is do those mundane tasks I don't want to do. And so it's figuring out kind of what that middle ground is for their customer base so that you can start adopting that into and teaching your AI to kind of fine tune that again once you have that and again, maybe 15, 20 years, I might say, you know what, please duplicate me so I can be on an island somewhere and someone else can be me. Right, that's fine too. Right now in this incubation phase, I need someone just to do the mundane things for me. And I think that's what they need to focus on, is what that common denominator is for everybody and really lean into that.

Aaron Wolpoff [25:27 - 25:38]: Well, Duran, what do customers want in this experimental phase? Do we want the comfort of an app and a software and a subscription, or are we ready to experiment and go along for the ride?

Doron York [25:39 - 29:37]: Well, I think you need to break it down to two different the answer of two different sides to them. One, as I'm pointing again to the utility element, that's what Chino is talking about, is utility. So look at Zoom, for example, the tool everybody use 10 hours a day. You know, now you can click a button and it takes summary of the conversation. So here I am three months ago, stop taking notes. When I'm actually singing with people. I don't have to worry about missing anything. It's going to summarize everything for me and I checked it periodically and it's pretty accurate. So, you know, I don't have to worry about it. I finished the meeting. I don't have to spend another 15 minutes organizing my notes. It saved me two hours a day, you know, by not doing it right. So, so that's a utility. The other utility is that, you know, if I, when we get to a point like if you ask Alexa, hey, Alexa, you know, I'm hungry, what should I eat? And she going to suggest to you, there's Chinese food and there's Mexican food. Well, that's kind of, that's kind of obvious, right? But when I get to the point, I say, Alexa, I feel bliss today. I mean, I'm not really myself today. I feel a bit of a down my, my stomach and I'm hungry. And Alexa be able to say, you know, should be able to recommend me something based on understanding my communication. I'm saying, wow, this is a utility I want to have, right? So, you know, in many ways, so all the SaaS platform like Zoom or Salesforce, that they're going to implement the AI component on top of it to eliminate unnecessary things like you said, mundane things that you do, like taking notes or customized reports or things that are too mundane to do it. And AI is going to do it for you from that level to what the customer wants. If you ask techies or young people or people that just like to play with technology, they will tell you I want to know how to write codes. You ask professionals like myself, I want it to do stuff for me I don't need to understand when I buy a car. Most people buy a car today. You don't open the hood to look at engine. When is the last time you bought a car and you opened the hood and said, oh, show me the engine, Explain to me how the engine is different than this one. You get to the car, you feel comfortable, you see the tech, you take a test drive and you buy the car. I'm driving in Range Rover that I bought a year ago. I never opened the hood once. You know, I don't care. So most people don't care what's under the hood, right? They want the utility, they want them to do the work. So asking the customer what you want is, could be a mistake in that regard. But any SAS, any SaaS model out there from Microsoft or anybody else need to look, what are the mundane things that you asked me to do as a user that you can take AI away from me and then end of the day you give me an hour, extra hour of whatever, organize my file, you know, organize my schedule, you know, I don't know. I we tried. Somebody show me this thing. When you have go to your Google, excuse me, using the calendly for example, to schedule meeting, can I go say hey Colin D. Can you change Wednesday between hours of three and four to do only 15 minutes, I can speak into it and boom, it's going to go do it for me instead of me go clicking 100 times. So I think the utility element of AI is going to take over a lot of things in life. Is this going to replace the people or they're going to replace the existing system in the future? In the long term? Future, yes, but not now. The whole digital self and my digital twin and my AI twin and all this stuff, I think we have an issue with that because AI can actually create your identical twin with a twist. So which means it's not really you, it's you as you want people to see you. So is this real? So you know, you know, you have some issues here that you have to, to. To be careful about. But in manufacturing, in, in, in Industry 4.0, taking the mundane tasks that people do, is this going to replace some workforce? Yes, but not to the degree that it's going to impact the industry in a significant way, not in a short run, in the long run.

Chino Nnadi [29:37 - 31:11]: I actually would disagree with you, Dorian. I like, I appreciate everything you're sharing and I agree up to the point of when you think it's going to take your, like it's AI is not going to take our jobs. We like the artificial intelligence is humans putting it out there. Right. We know right now AI is quite biased. It doesn't have certain perspectives there. It can never duplicate me as a human because there's so much nuances to that. Maybe in 3,000 years, like literally 3,000 years, I would think so. But as a human, there's something about that human experience that we can't touch. The things that are untangible, that make me me, that make you you. And so again, when you look at SAS as a subscription and with Microsoft and companies like that, yes. Mundane tasks, utility, great. That's what you're, that's what people need right now. That's, you know, you want to start incorporating and building that trust. Sure. If I'm using Microsoft and I'm saying, hey, people pay me as a consultant to help with their kind of recruiting. And again, yes, I don't actually use Zoom summary notes because I'm often having confidential conversations where again, I don't know where this is going. I don't want to share this person's personal information here. So it can't. There are things that are. That I have to do as a human to move away from that, to protect and from a regulation perspective, the people that I work with. And on top of that, I can't give AI everything again. You see it so much, especially on LinkedIn.

Doron York [31:11 - 31:11]: Right.

Chino Nnadi [31:11 - 32:20]: You can tell when it's an AI generated post. You can tell right now. And of course it's getting smarter. But the problem is if everybody's using the same tech and if everybody's learning from the same thing and AI as a whole is giving us all the same information, the only way to stand out in the market is to be an individual, to be human. So cool. We can all put our information, we can utilize it, but then AI will become this one singular entity. And so that's where we can never really replace us. It can't. It can learn from us, but it can never be me, it can never be you. And so I agree with the utilization piece, but I don't think that in the future. And again, at the end of the day, it's supposed to help us do our jobs better. If AI was to take me as a whole Then what? It's not helping me at all. Then you know, my clients just go to the AI, you know, businesses. Microsoft ceases to exist because everyone's like cool, I can create my own Microsoft then and build that. That's not going to happen. There's a reason there are people who are programming AI. That's a tool for us. AI is not us.

Doron York [32:20 - 33:33]: So first of all I want to correct something. I didn't say that AI will replace humans. I'm saying in some areas, especially in the industry, and I know it from the industry expert, that it will replace some workforce that do mundane job with the AI utility. It's not going to emulate people from the production line. It's just instead of 20 people, they're going to use 16, you know, so it will impact in that regard. And the second thing I want to, I want to, I want us, all of us to be very careful to make statement like he never replaced human. We don't know, we don't know what it's going to do. Have you ever seen the movie Odyssey 2000 that you know that they, you know when AI going to get to a point that in some glitch in the system it's going to take over and his own identity. We don't know that's the risk that we're taking with developing this cutting edge technology. So I wouldn't say, because I've seen in my lifetime and I'm a little bit older than you that people say in the beginning of the Internet, oh that's going to go away, it's not going to replace hahahaha. It did replace the entire system. So I don't know why it's going to look 20 years from now. The rate of development as we experience right now, it might happen quicker than we think, but not in the immediate future.

Chino Nnadi [33:33 - 34:45]: I would agree to disagree because AI again like this is like this theory of like the Matrix and there's so many movies and books and things about this. AI cannot reproduce. AI is a robot. I put water on said robot. The robot is dead. End of discussion. Right? Like it's, it's zeros and ones that we're programming. At the end of the day we are not zeros and one, we are made as humans. You can kind of take that into more spiritual, theoretical, biological in many different ways. And so I agree that some jobs will become redundant. However, there will also be a thousand other jobs that built in terms of like AI, prompt DevOps, AI engineers, machine learning engineers and things of that nature. Where people can then learn and maybe not needing to go to school, do that and can kind of use AI to, to learn from that. But to say that AI will become people in the future, like that can never happen because we are the people who are prompting and like programming said AI, we are, they're learning from us. But the biological data that makes humans humans, we're human, they don't. AI doesn't have that.

Doron York [34:46 - 35:50]: I can, I can tell you that I experienced two weeks ago the Innovation Authority in Israel, which is putting a lot of money into turning Israel to an AI powerhouse. All the cybersecurity companies struggling right now with AI because they were not ready to AI threat to cybersecurity. So they're all developing different things and one company in particular, without mentioning the name, they build, some of the engineer build, they call it Mario, which is kind of the Mario brothers. You see in the game, Mario is the warrior inside the software that's supposed to combat threats. How it works right now is the threats coming in and there's people sitting behind the, the, the screen and they doing some stuff, try to fight it and they develop Mario. So they throw a threat at Mario and Mario take his time and respond. And then he threw another threat and he responds again and he threw another thread and respond again. In a matter of two and a half months, his knowledge base and his capability went thousand percent. So right now, this is a month and a half running in Israel right now. No hacker was able to beat Mario yet.

Chino Nnadi [35:50 - 35:53]: I don't disagree that AI is not smart.

Doron York [35:53 - 36:18]: No, no. But the point that I'm trying to make is that when this big brain call or the biggest language model, that when AI get to a point that they're going to have enough to teach himself, we don't know where it's going to go from there. They're not going to be. AI is not going to be human flesh and blood like humans. But the intelligence that we talking about can get to a level in the, in different dimension that we not even comprehend to see.

Chino Nnadi [36:18 - 37:25]: I agree with that. But I would too AI like again, the Internet's smarter than me. AI is smarter than me. That'll always be that. But it can never be me. AI will never have the nuances of me as a human. And so again, it can, you know, beat every hacker, which is fine. And again, what, what's the point of that AI? What, what's the end result? Why for the. Is it just to gain information? Are they using that in a malicious way? Are they just having it so we know that they can and to help people patch holes like the why is the human piece for the AI and that's kind of what it comes down to. And so going back into our topic with Microsoft and SAs and incorporating AI again, I will never be us as a human being. It'll always be smarter, the Internet smarter than us. And so using that as a tool will be really helpful because at the end of the day the people who need the tools are the humans. And so I do think that for any SaaS company you do need to start incorporating, figuring out what the utility base is for your customer base to keep moving.

Aaron Wolpoff [37:25 - 38:00]: Melissa, I want to take us back to the, to the business case because if AI becomes another utility, right, and everyone's got there's enough companies spending huge expenditures on this, right? 228 million some wait, 228 billion, sorry. This coming year, if we're just in the big three companies, it becomes a utility and everyone can produce images, everyone can produce videos, everyone can produce time saving tools and all that. How do you create, how do you stick to what you can, what you do best as a business and that kind of evolving landscape if you're Microsoft, let's say.

Doron York [38:00 - 38:05]: Well, it's, you know, I want to mention one thing that I want to hear. Melissa's.

Aaron Wolpoff [38:05 - 38:06]: I want to hear Melissa and we'll go back to you.

Doron York [38:06 - 38:08]: Oh, I got it.

Melissa Eaton [38:08 - 40:33]: Well, I think to be able to ensure a smooth evolution, SaaS companies need to prioritize both the design, user centric design and maintain a balance between that automation and human interaction. You know, I talked about human touch. We really need to understand and give comprehensive communication and transparency around that tailored training and support helping customers adapt to all of these new AI driven features and with transparency. And so their understanding of how AI is interacting with either with the sat, with SAS or with the software, whatever they're asking for, monitoring that feedback and how it's performing is really important because again, as we're looking to line up that journey to build trust, we really also want to make sure that we're iterating and innovating and refining the AI experience. And so Microsoft needs to exemplify this by integrating IA gradually and continuing to focus on that like it's doing in its partnerships with OpenAI, Azure Copilot, while maintaining robust customer experience channels. I think that's really important. I think the one thing that I know that we're trying to wrap this up, this is a hot topic, but we didn't really get to which I think is really going to be important too. And this is probably from, you know, all of our perspectives is really shifting to the different type of models. So like there was mention at the beginning about usage based models that we talked about and whether that's going to be the way of the world. I mean, because it is interesting because a subscription means something to, you know, people versus, you know, as needed. I definitely, you know, have worked in businesses where we were a Google Suite versus Microsoft World. And so I let my Microsoft subscription lapse, right? And so then I would get annoyed when someone would send me like a PowerPoint because I couldn't open it. I'd be like, what? You know, so again, I think that there's, there is a need to think about as the business is evolving. So as SaaS is looking to incorporate all of these innovations, how do they, from a business perspective stay on top of that too? So that's my answer, Aaron. I don't know if that helps.

Aaron Wolpoff [40:35 - 40:58]: We're being asked to wrap it up, but before we do, we always have to ask ourselves if we fixed it. And I want to know Doron is the big headline from Microsoft recently is SaaS is dead. That's the one that got all the attention. Is SaaS dead? Is AI taking it over? Or did we create maybe a world where SAS can coexist? Or do we fix the issue we set out to fix?

Doron York [40:59 - 41:22]: I'm taking the statement of Microsoft CEO said SaaS is dead is like telling somebody you have a cancer and you have 10 years to live. Which means I'm saying, yes, SAS is dead, yes, but it's going to take 10 years. It's not like you're dead tomorrow. It will take SAS out of the equation in some point in time, but it's going to be a while before you see it.

Aaron Wolpoff [41:22 - 41:23]: What do you think, Gina?

Chino Nnadi [41:23 - 41:59]: I think SaaS is going to look different again. You can use AI as a tool and if they can figure that out from like usability and all the other things that we talked about and building your teams around that, you know, you, you can see a resurgence in sas. You know, who knows, as Doran was saying earlier too, like, like blockchain and everything else that has come and gone, we might be saying, you know what, in 10, 15 years, everyone's kind of over AI and only uses it for this, right? We again don't know. So I think it's going to change the landscape of SaaS. I don't think it's going to kill it necessarily.

Aaron Wolpoff [42:00 - 42:07]: How about you, Melissa? Is SAS dead or do we find a compelling reason to keep it around and have it coexist with AI as it continues to emerge?

Melissa Eaton [42:08 - 43:01]: Necessarily? I think it just needs to evolve and level up. And I think that that means that you need to do what they're currently doing. And one of the things that, you know, really needs to happen is the infrastructure remains critical, but we need to use AI in a way that they don't fall behind, but they're evolving and making it more intuitive for everyone who needs it and understanding what the customer needs look like. And again, I think in the future, what do AI agents look like using these smart, adaptive, efficient tools and making them personalized, intuitive, part of our everyday life, but with transparency is going to be really important. The business model may need to change a bit, but again, I would say that's evolution, not necessarily killing it to extinction. How about you?

Aaron Wolpoff [43:01 - 44:03]: I think I agree with what you're saying, what everyone's saying. I think as AI is more and more of a utility, it's which I guess it comes down to which company I trust more, which company knows me better, which brand do I identify with more. And unless Microsoft can create a compelling reason why Microsoft can continue to evolve in the age of AI versus Google versus Meta versus everyone else, you know, how do they play in that space? And I know a lot of the companies you work with and startups in that field are wrestling with that issue, maybe taking on a bite sized piece of it or one segment of that challenge. Microsoft is, we're all watching because we're face to face with it. But I have a feeling we're never going to buy the software in a box again or not going backward. So I like the conversation that we've had and that takes us to the end of another episode. Thank you again to Duran York of cityside Ventures and Doron. If our listeners want to find out more about you, where can they go?

Doron York [44:03 - 44:06]: Go to citiesidevc.com and find everything they need to find.

Aaron Wolpoff [44:06 - 44:25]: Great. It's been a pleasure having you on. For the rest of us, you want to connect with our panelists about fixes for your own company in hr, marketing operations, customer experience and other critical areas. Please reach out@wefixeditpod.com and we will see you next time. This podcast is produced by Straightforward Media Group. All rights reserved.