Why does AI transformation require professional services not just products?

I met a VC last year.

They passed on us because we have a strong professional services component to our mix. We believe that AI is a business transformation and it needs consulting and people to enable that transformation.

It’s easier to scale a product than a services company, they said.

I suggested they might be wrong and that 2026 would usher in a new AI era.

(There may have been other reasons, of course, perhaps me suggesting they might be wrong being one of them….)

VCs and the like have been investing in software tech with a set of rules for years. Those rules have worked: pick a business problem, build tool, get to PMF, create ARR model, scale sales team. Exit.

I believe that is now changing.

I think Naval Ravikant is right on the money, particularly for smaller single-use software tools.

Go to ChatGPT and type in “analyse this company (insert website of small ISV). Build me a spec for an MVP.” And then feed that into Claude Code. And then have something in 48 hours.

I suspect that sales distribution will continue to be a moat.

How long before someone creates a software factory using AI to build copies of every category winner?

Well it’s here now with Neologik. You don’t need an app: you need a task done, a process completed, a report produced.

Caveat: Big ISVs, those that form a system of record, are going nowhere in a hurry.

Why vibe code a complex CRM tool when it costs peanuts to license one?