Personal LLMs: The Black Hole for SaaS

Back in the ’90s, Intel’s CPUs were often likened to a “black hole” for personal computers because they kept on expanding their functionality, rendering neighboring components on the motherboard obsolete. Now, it looks like personal large language models (LLMs) are set to play a similar role for numerous SaaS products. And the harsh truth is, there might not be much these products can do to resist.

Personal LLMs, designed to be tailored for an individual’s working environment, tasks, and preferences, are beginning to surface. In fact, I just stumbled upon a new project, PrivateGPT, which facilitates interactions with local documents. The future will likely see an influx of personal LLMs aiding us with routine life tasks — relevant notifications, scheduling, purchasing items, reminders, and so forth.

These LLMs will function like our own intelligent, personalized assistants, carrying out tasks the way we prefer. When connected with APIs and systems, like Zapier, they’ll be capable of interacting with virtually everything. A lot of these tasks are currently managed by SaaS applications, which LLMs will soon be able to accomplish without any extra cost. The first SaaS applications to be sucked into the LLM “black hole” are likely to be those designed for straightforward, niche market functions for individuals and small teams — think scheduling, to-do lists, task and project management, and basic sales and marketing automation tools.

Let’s consider scheduling tools, for instance. Over the years, these tools have come, gone, and come back again, gaining substantial market traction recently due to the increasingly dispersed workforce. Typically, they let you link your calendars to a central system and provide a page where people can choose the best time for a meeting. They save a ton of time — I built one such tool about a decade ago. However, their straightforward architecture and workflow mean they don’t possess a formidable technology moat.

A personal LLM with access to your calendar and email can replace this basic functionality. It can contact other people and schedule meetings at the most suitable times, taking into account your personal preferences. For instance, it can guide other parties to schedule meetings with me at the best possible time, not simply one where I am free.

Of course, successful companies that build scheduling apps understand this emerging competitive threat and many are tweaking their applications to include LLMs. Sadly, there’s little they can do to counter a comprehensive LLM that handles dozens or hundreds of personal tasks, with scheduling being just a minor feature. This is the genuine threat to their business model: a free, superior, readily available competitor that exists as a feature in a more potent tool.

While every SaaS company is crafting an LLM strategy, I’m willing to bet most are focusing on enhancing their own products for their customers based on this powerful new tool. This is the Innovator’s Dilemma: The real danger lies in an emerging new competitor with a distinct business model that completely eclipses their value proposition. If you’re one of these companies, I don’t have much advice for you, beyond pointing you to the wise words of Clayton Christensen.

The SaaS industry has enjoyed a 15-year boom, but the halcyon days might be coming to an end. The victors of the future will be the companies that create new business models with different value propositions based on this emerging tool. It’s going to be quite a spectacle.

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Prolego is an elite consulting team of AI engineers, strategists, and creative professionals guiding the world’s largest companies through the AI transformation. Founded in 2017 by technology veterans Kevin Dewalt and Russ Rands, Prolego has helped dozens of Fortune 1000 companies develop AI strategies, transform their workforce, and build state-of-the-art AI solutions.

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