Schmidt: AI automation expands small agency profit margins from 5% to 30%
Joe Schmidt · AI-Powered Acquisitions: A New Playbook · Dec 23, 2024 · at 7:29
Joe Schmidt, partner at Andreessen Horowitz (a16z), details how automating administrative tasks with AI enables traditional service businesses to cut headcounts and dramatically improve profitability.
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“Leveraging AI agents to basically have some of those conversations with the customer, whether it's on new business On renewal or on client servicing and then actually resolving these claims in real time or like resolving these service issues in real time. Now, Steph's insurance agency doesn't need four people. It might need two people. It might need one person. And you go from having five percent net margins to 30% net margins”
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