O'Driscoll: AI roll-up models are flawed due to customer misalignment and churn
Rory O'Driscoll · How LP Deployment to Venture Will Change in 2025 & Are Endowment Funds in Trouble? · 20VC with Harry Stebbings · Apr 24, 2025 · at 53:28
Rory O'Driscoll (General Partner at Scale Venture Partners) evaluates the viability of venture-backed AI roll-up strategies across traditional service sectors.
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“I think it's a crappy model. Just for contrast. You really, the bet you're taking is you buy a set of customers that weren't picked by you because they are suited for your product. They were picked by some mom and pop founder as being the 10 best, the 10 customers they could sell to. And then you come in and maybe your AI is so good. It can address all the needs of all 10 of the customers. But my view, you may find much more likely that, you know, of the 10 customers, Three or four of them, perfect sweet spot. You get them across to being all software. It's great. The other five or six to a greater or lesser extent, the needs are slightly different because yeah, remember they didn't pick you because of your AI, because you didn't have their AI when they picked you. So you're going to have a lot of churn and people where you can't make it work.”
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