David Hsu has a front-row seat to how companies are figuring out the balance between employing artificial intelligence and the number of workers they need.
He is the CEO of Retool, which helps companies integrate large language models like ChatGPT into their existing software. Last year, the startup raised $45 million at a $3.2 billion valuation, and it is backed by investors like Sequoia Capital and the co-founders of payments firm Stripe.
Hsu notes the driving force of productivity in the last 20 to 30 years has been software. I talked to him about why AI would supercharge that trend in the edited conversation below.
The View From David Hsu
Q: What problem are your customers trying to solve?
A: So ChatGPT is augmentation. It saves time but a human still has to be involved. With our customers, it’s not augmentation they want. It’s full-on automation. They just want the human to disappear. That is where you see the massive cost savings.
Q: Will companies actually be able to gut their workforce?
A: Outbound email is a good example of this. Let’s say you’re doing sales. You have a sales development rep just copy-pasting a bunch of names in there and sending it out. Probably 5% of SaaS companies are [sales development reps]. I think that job is not going to be around for that much longer.
We have a big travel agency customer and they have this premium product where they’ll go plan trips for you and put together an itinerary. That’s actually reasonably heavy lifting and it’s quite costly. They’ve automated all that away.
Q: But do those people get fired? Or can companies get more out of their existing people?
A: The travel agents now do other things. But I don’t know what’s going to happen there. That job is not a job anymore. The driving force of productivity gains over the last 30 years has been software but it’s hit a wall because basically everything that was immediately automatable has been automated. Now the space has radically expanded, probably by 3, 4x.