[senko]

I run a dev agency, and I can spot one when I see one.

The trouble with dev agencies, "services companies", integration specialists and "forward deployed engineers" is that they scale lineraly with the number of people.

You can't 100x your revenue without at least 80x-ing your headcount.Oh, you might go for that once due to AI - but so can everyone else. After that, it's boring linear growth.

When I say "boring", I don't mean as "capitalism requires exponential growth" critique. I mean OpenAI valuation is not priced for that. They're priced for singularity. If the bulk of their revenue turns out to be bodyshop, that's...quite a different math.

The way to charge big with this kind of work is to do what big consultancies (MBB, IBM, etc) do: brand equity and (supposed) expertise in solving domain problems. OpenAI has ... interesting tech.

It's going to be interesting seeing if they can pull this off. If I were a betting man, my money would be on "no".

[MagicMoonlight]

The problem with these kinds of businesses is you have no capital. You have labourers.

If you’re SAP, you build SAP once and you sell it. If you’re an author, you write the book once.

With consulting, you have to keep doing the same work every year just to stand still. You don’t own an actual product.

[senko]

Mostly.

Many of these companies do build up internal know-how.

In case of big consulting companies, they have huge internal knowledge bases, decks, cases etc from previous engagements. In case of product companies with FDEs, the feedback from customers ideally trickles down to product improvements. In case of OpenAI, they can improve their models.

Whether that's actually valuable enough to turn a blind eye to the downsides of consulting, I don't know.