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Now is a good time to start a service business

Now is a good time to start a service business. Maybe you should try it! A service business is one where your company sells its work output directly instead of selling a product. Dentists, plumbers, design agencies, pool cleaner, consultants: these are all service businesses. The opposite of a service business is a product business, where your company develops a product and sells it to customers. Your dentist pays for a practice-management software product and a bunch of teeth cleaning products like drills, mirrors, and suctions, but you pay for the service of a biannual dental checkup.

But a compound startup is expensive and operationally difficult: you have to do O(N) as much work at the beginning, where N is the number of products you’ll offer out of the gate. The most likely outcome in the near term is semi-autonomy: AI workers that can do work with some supervision by humans to ensure the quality bar stays high. If AI keeps getting better (a guarantee) but doesn’t quite get to superhuman abilities (big question mark), there will be lots of automation opportunities that let you grow your service business beyond the traditional constraints.

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