Unleashing the Power of AI Leapfrogging: A Journey from Good to Great

While many founders are eager to apply AI to industries already digitized, the real impact lies in those verticals where protocols and software have remained stagnant for over two decades. In sectors like agriculture, hospitality, education, legal, construction, and manufacturing, where pen and paper are still prevalent, AI leapfrogging presents a tremendous opportunity. By delivering AI solutions packaged intuitively, we can reach demographics that were previously bypassed by software revolutions, paving the way for unprecedented progress.

To understand leapfrogging, we can look at examples like the mobile payments space in Kenya and China. These countries skipped the credit and debit step altogether and embraced mobile payments, enabling rapid adoption. Similarly, China's major mobile payment platforms, AliPay and WeChat, quickly overtook credit cards, with 90% of people in its largest cities adopting mobile payments by 2020. These examples demonstrate how leapfrogging can create seismic shifts, with AI being the next potential candidate.

“The key to successful leapfrogging lies in ensuring that the value of the change outweighs the burden of change. To achieve this, two factors play a crucial role: creating immense value through the change and minimizing the burden of transition” said Pravesh Mehra, COO at Christian & Timbers. By identifying non-transactors—industries with historically low SaaS adoption—we can target sectors ripe for AI leapfrogging. Industries such as construction, legal, manufacturing, and hospitality present immense potential for transformation.

Traditional switching costs have hindered the adoption of SaaS solutions in many outdated industries. However, generative AI offers a new approach, providing instant value and intuitive user experiences. By automating laborious tasks and removing complex onboarding processes, generative AI minimizes the burden of change and significantly enhances the value proposition. Companies like EvenUp, which leverages AI to streamline the personal injury law process, exemplify the power of AI leapfrogging by delivering immediate benefits to users.

Although executing leapfrogging strategies can be challenging, the rewards are substantial. Industries with entrenched systems exhibit low churn, making them lucrative long-term opportunities. However, the window for AI leapfrogging may not remain open indefinitely. History has shown that these opportunities fade quickly, as seen in the rapid adoption of mobile and digital payments. The time to act is now, as AI leapfrogging holds immense potential to revolutionize archaic industries and unlock unprecedented progress on the path from good to great.