What will be the valuation impact of AI thoughtfully incorporated into industrial companies?
As I watch private equity focused coverage of AI I see a large emphasis on business model disruption in SaaS. And
@zorian had an interesting post recently on how sponsors and deal teams can and do use it.
I don't see nearly as much around how AI can be leveraged to improve industrial and manufacturing business operations. And I see almost none about using AI to improve organic growth.
So if there are four primary value creation levers - financial optimization, operational efficiency, inorganic growth, and organic growth - there are definately broadly untapped opportunities to use AI.
And then there's a potential fifth lever - an AI mindset in a company. Will really thoughtful AI adoption be a value creation lever? Or will it be table stakes, and its absence a drag?
It's a really interesting question and I enjoyed my recent conversation with
@JstnMtchll from
@FundFire .
FWIW, I'm seeing some amazing tool development in both the marketing and sales functions of organic growth.
My friends at
@humbleopscorp are also doing really cool stuff around using AI to unlock massive operational value - even in companies that are well run with defined processes, LEAN, and more.
I would argue the biggest differentiator I'm seeing is with companies (really key people in companies) that are thinking beyond replacement (of steps, process, etc.) and looking for opportunities for step change. I would expect that companies that take this approach will realize a valuation premium - but that's just my non-financial guess.
It's exciting.