The Logan Bartlett Show• Sep 12, 2025• 1:08:36Interview

Bret Taylor: A New Class of Software Winners

From The Logan Bartlett Show

Bret Taylor•CEO, Sierra AI

Executive Summary

Brett Taylor, co-founder of Sierra and former co-CEO of Salesforce, discusses the transformative impact of AI on the software industry.
He compares the current AI wave to the early internet, highlighting the intense competition in obviously large markets like customer service.
Taylor argues that AI agents shift software valuation from productivity enhancement to outcome-based pricing, creating an innovator's dilemma for incumbents who are constrained by existing business models.
He predicts that most companies will buy, not build, AI agents and that these agents will become as central to a brand's identity as its website.

11 quotes

Concerns Raised

Incumbent companies' ability to adapt to new business models
The 'messy middle' of technological transitions
Potential for disruption of established digital economies (e.g., search, advertising)

Opportunities Identified

Creation of new software categories in previously underserved markets like legal tech
Shifting software from a cost center to a value driver via outcome-based pricing
Massive productivity gains for individuals and companies that adopt AI tools early

Key Themes

AI as a Platform Shift vs. the Internet

Taylor draws parallels between the AI revolution and the early internet, noting that both feature obvious, high-value markets (like search then, customer service now) leading to intense competition where execution and business model, not just technology, determine the winner.

This provides a historical framework for evaluating the current landscape of AI startups and incumbents.

The Innovator's Dilemma for SaaS

Incumbent SaaS giants face a significant challenge in adopting AI, not because of technology, but because of their established business models, sales incentives, and investor expectations. Taylor argues that the shift to outcome-based pricing is a formidable change-management problem that will create opportunities for new, unencumbered companies.

This is critical for investors and strategists assessing the long-term viability of major software players.

The Valuation and Nature of AI Software

AI agents represent a fundamental shift from software as a productivity tool to software that performs a job. Consequently, their value should be measured based on the outcomes they produce (e.g., a sale made, a problem solved), not on a per-seat license, which will upend traditional SaaS metrics and business models.

This re-framing of value is essential for understanding the economics of the next generation of software companies.

The Future of the Software Industry Stack

Taylor predicts the AI software stack will consist of foundation model providers selling intelligence as infrastructure, and applied AI companies building purpose-built agents for specific industries and functions. He believes most enterprises will prefer to buy these specialized agents rather than build them, due to the ongoing costs of maintenance and the value of amortized innovation.

This provides a clear thesis on where value will accrue in the AI application layer.

Get started free

Topics

AI Agents SaaS Business Models Innovator's Dilemma Customer Experience Outcome-Based Pricing Enterprise Software Foundation Models Applied AI Software Development Future of Work Salesforce Sierra Competition

Processed Feb 25, 2026 yt-dlp + mlx-whisper + Gemini