Software is Eating Labor
The a16z Show
Capital, Labor, and Automation History
Alex traces how capital historically augmented labor and situates modern software as an end-to-end automation wave.
Software has fundamentally changed the way we record, store, and share information. Its next act is to fundamentally change the nature of our economy, capturing trillions of dollars of value in the process.
In this talk from the 2025 a16z LP Summit, a16z General Partner Alex Rampell discusses the history of filing cabinets and databases, how SaaS pricing moved from seats to outcomes, and how AI agents will accelerate the trend of the last 70 years of software progress.
Timecodes:
0:00 Introduction
0:58 The Scale of the Labor Market vs. SaaS
1:41 Capital, Labor, and Automation: A Historical Perspective
3:32 The Filing Cabinet Metaphor: Digitizing Work
3:50 Case Studies: From Airlines to Accounting
8:42 The Limits of Efficiency: Humans Still in the Loop
9:02 Rethinking SaaS Pricing Models
10:21 The Impact of AI on Labor and Software
11:41 Outcome-Based Software: Moving Beyond the Filing Cabinet
17:41 Real-World Examples: AI in Action
22:05 The Expanding Market: New Opportunities with AI
25:44 Conclusion and Takeaways
25:48 Podcast Outro and Disclaimers
Resources:
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Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures.
Stay Updated:
Find a16z on X
Find a16z on LinkedIn
Listen to the a16z Show on Spotify
Listen to the a16z Show on Apple Podcasts
Follow our host: https://twitter.com/eriktorenberg
Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures.
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