Fantastic framing of AI through the transacton cost lens. The point about AI reducing minimum efficient scale really clicks - I've seen consultants deliver stuff that used to need whole teams, just with AI handling the complementary tasks. What's interesting is how this creates a sorting mechansim where the best independent workers might actually outproduce firms now.
Thank you! That’s exactly the intuition I was trying to surface. The minimum efficient scale point is doing a lot of work here, and consulting is a great example of where you can see it play out in real time. Once that scale falls, it does seem to introduce a sorting margin you pointed out where some high-performing independent workers can outproduce firm-based teams, at least for certain types of work! Will be interesting to see how this continues to play out.
Fantastic framing of AI through the transacton cost lens. The point about AI reducing minimum efficient scale really clicks - I've seen consultants deliver stuff that used to need whole teams, just with AI handling the complementary tasks. What's interesting is how this creates a sorting mechansim where the best independent workers might actually outproduce firms now.
Thank you! That’s exactly the intuition I was trying to surface. The minimum efficient scale point is doing a lot of work here, and consulting is a great example of where you can see it play out in real time. Once that scale falls, it does seem to introduce a sorting margin you pointed out where some high-performing independent workers can outproduce firm-based teams, at least for certain types of work! Will be interesting to see how this continues to play out.