Buy the incumbent, then refound it: a bank's loan time went 30 days to 11
The thesis is that AI's impact on the economy is uneven, and there is a class of industries where the incumbent holds every advantage through brand, scale, network effects, or regulation. Buying one and inheriting those advantages beats trying to attack it as a startup. Most enterprise AI effort is dismissed as handing small machines to every human in the assembly line to speed up work, when machines that run 24/7 and scale with electricity should trigger a reorganization of the company itself. The reason ownership matters: a CEO cannot recruit the engineers to do it alone, services firms are structurally incentivized toward incrementalism because they optimize for share of your wallet, and software vendors can only sell into a workflow as it exists today. At BankSouth, average consumer underwriting time fell 94% since March and the average loan went from thirty days end to end to eleven, with a smaller underwriting team, which let the bank absorb doubled Q2 loan volume it would historically have turned away. The regulated nature of a bank turned out to be a feature: well-defined rules and clean data hygiene are exactly what agents need. On what makes it work culturally: "In a world where you believe that alpha comes from engineering and AI, you need to create a culture whereby the celebrated persona is the engineer." The firm is targeting one deal per year, and just announced a $7.7B take-private of insurance broker Baldwin backed by the Dell family office.