

Software is Eating Labor
670 snips Oct 3, 2025
Alex Rampell, a General Partner at a16z and expert in software and fintech, explores the transformative impact of software and AI on labor markets. He discusses the shift from traditional SaaS models to outcome-based pricing, emphasizing how digitization is not just about storing data but performing tasks. Alex shares real-world examples, such as how software can automate jobs in healthcare and HR. He highlights the vast opportunities AI presents in expanding addressable markets, ultimately reshaping economies and redefining workplace efficiency.
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Labor Is The Next Software Prize
- The U.S. labor market ($13T) dwarfs the global SaaS market (~$300B), making labor the next big prize for software.
- Software that replaces or operates labor can expand far beyond current SaaS revenue pools.
Filing Cabinets To Databases
- Most software historically just digitized filing cabinets into databases without removing human labor.
- That explains where large SaaS market cap and revenues came from but also why efficiency gains were limited.
How Sabre Digitized Travel
- Sabre moved airline reservation filing cabinets onto IBM mainframes and enabled global access via terminals.
- That single digitization transformed travel distribution and spawned major companies.