← Back to context

Comment by IkmoIkmo

7 years ago

I'd mostly disagree.

If you have an extremely high-margin service, e.g. perform bill $10k of work for $100 of salary, there's absolutely no incentive to automate things on the seller's side. It essentially means hiring someone to build out a (software) solution to squeeze the $100 into a dollar of payments on a cloud provider. All you're doing is raising your margin from 99% to 99.99%, it's meaningless, your profits increases by 1%, assuming the Capex for development was zero. And given this is typically a low-volume kind of transaction, with considerable development costs to build a Saas solution, this assumption is way too generous.

It's exactly these kinds of services which are completely fine to have humans perform.

It's the type of legal work where you bill $200 for a simple contract review and have to pay a paralegal say $100 for the work, which would be great to automate to a $1 of AWS payments. Here you're increasing margins from 50% to 99%, doubling profits. Any development costs can be averaged out to approach zero, as document review is a high-volume task in any organisation.