The SaaS Playbook might be dead? AI could be the smoking gun

Starting with a miniature AI agentic Exec Assistant

Is AI going to replace us? I think for some of us the answer is yes. And that’s okay.

Let’s talk about 1894. I’m getting older but I definitely was not around for this! But there was an article written in 2004 by Stephen Davies titled The Great Horse-Manure Crisis of 1894. It is often cited as one of the most famous urban planning and environmental crises that never actually happened. The article illustrates an important shift in technology and society.

In the late 19th century, cities around the world, especially in Europe and North America, relied heavily on horses for transportation. These animals powered everything from personal carriages to streetcars, freight wagons, and delivery carts. In London alone, there were an estimated 50,000 horses, while New York City had over 100,000.

The problem? Horses produced an enormous amount of manure. Each horse generated about 15 to 35 pounds of manure per day, along with several gallons of urine. The Times of London predicted that within 50 years, every street in the city would be buried under nine feet of manure.

Conventional thinkers created conventional solutions. All failed.

The leaders of the day tried to develop options. City planners and governments scrambled for sensible solutions:

• Street cleaners tried to remove waste, but it was an overwhelming task.

• Manure was sold as fertilizer, but supply far exceeded demand.

• Urban horse populations continued growing, making the problem worse.

All of these make sense.

But then came along the automobiles

While planners struggled, an emerging technology provided an unforeseen answer: the internal combustion engine. The automobile, considered a novelty at the time, started becoming a viable alternative to horsedrawn transport.

By the early 20th century:

• Cars, buses, and electric streetcars began replacing horsedrawn vehicles.

• The demand for horses dropped, reducing manure production.

• Cities transitioned to cleaner streets, with better sanitation methods.

And just like that, the shitty problem went away.

Technology created a paradigm shift and the expected jobs of tomorrow never materialized. Instead, a brand new era began.

And so it will with AI

In my Youtube video at the top I leveraged Zapier’s no-code agent functionality to build an Executive Assistant for me. This newsletter is a passion project of mine but it has generated real economic interest for GTM vendors trying to reach revenue operators, sellers, and other marketers. I struggled with keeping on top of:

• Field sponsorship inquiries

• Responding to vendors

• Providing reporting and visibility on results

In short, I sucked at the back office and the selling. I was really disorganized.

So I started to create systems for myself. My first system was blocking out time on Saturdays to write content and Sunday evenings to respond. Instead of letting weeks go by without a proper response I was down to a few days. You can pick whatever platform you want to build your own AI Agent but I suspect it’ll become easier as companies build “personal assistant” apps for you that are more plug-and-play than where we are today.

For paid subscribers I’ll share my full prompt below the paywall. But I’d encourage you to try to set one up for yourself.

The largest cost in GTM is headcount

Whenever I run a Customer Acquisition Cost analysis the largest line item contributing to expense is clearly headcount. Take a look at an organization with 40 sales reps. If you ran the existing GTM SaaS playbook you would likely support those 40 AEs with 1 SDR for every 3 AEs. But looking at this recent LinkedIn poll I ran it appears that the number of AEs per SDRs supported has increased. Perhaps the age of AI SDRs has already made a material impact.

Original LinkedIn post

I, for a very long time, felt that the ratio was 2 to 2.5 for every SDR. Times must be a changing as they say.

Okay so let’s keep breaking this down:

• 40 Account Executives

• 5 managers (assume 8 reps per manager)

• 1 VP Sales (leader-of-leaders)

• 13 SDRs (let’s use a 3:1 ratio)

• 2 SDR managers (6.5 - 8 SDRs per manager)

• 1 sales development director

• 2 sales operations leads

• 1 sales operations director

If this is a technical sale then you also have to add:

• 13 sales engineers (assume 3 AEs to 1)

• 2 sales engineering managers

• 1 sales engineering director

Whoo! That’s a lot of people!

If the 40 sales reps had a $125K base and $125K variable then their OTE would be $250K. Assuming a 4x quota then you’re staring down a $1,000,000 quota per rep. Multiplied by 40 reps the org has $40,000,000 in deployable quota. Assuming you’re using a centralized “80%” attainment number then the internal company target is $32M (representing a 25% overassignment). Assuming another 85% to the Board then your Board target is $27,200,000.

• The board would consider $27.2M success

• Internally the company would consider $32M success

Original LinkedIn post

But to get here you’d have to pay the following:

• 40 Account Executives: $250K OTE

• 5 managers (assume 8 reps per manager): $280K OTE

• 1 VP Sales (leader-of-leaders): $320K OTE

• 13 SDRs (let’s use a 3:1 ratio): $110K OTE

• 2 SDR managers (6.5 - 8 SDRs per manager): $140K OTE

• 1 sales development director: $160K OTE

• 2 sales operations leads: $130K OTE

• 1 sales operations director: $170K OTE

All of the numbers above are arbitrary. If someone wants to do a benchmarking study by all means send me the figures please!

• AEs: $10M

• AE Managers: $1.4M

• VP Sales: $320K

• SDRs: $1.43M

• SDR Managers: $280K

• SD Director: $160K

• Sales Ops Leads: $260K

• Sales Ops Director: $170K

Total: $14.02M potential sales compensation

Relative to deployable quota you’re looking at $14.02M on $40M representing 35% of potential bookings.

Right there you’re already looking at 35% of CAC on sales salaries and commissions. Add in technology, partnerships, overhead, marketing, contractors and you’ll arrive at the total sales and expense numerator of CAC.

But you have to remember that not everyone will hit target. And not everyone will be paid their OTE. So we may still have 35% but both the numerator and denominator should be estimated.

Replacing people is a no brainer for operators

Why wouldn’t we try to reduce some of this headcount with AI? Companies are already trying the first conventional approach to doing so: offshoring.

There is a growing talent pool of sales operations talent in far flung places like India, Brazil, Mexico, eastern Europe. There is talent in them hills! They’re smart, highly educated, industrious, and ambitious. The only thing holding them back is they work remote and timezones.

But oh wait! Companies are comfortable today with remote working.

After this, I think companies will look to remove low value added activities with AI agents and AI automation.

In order of ease:

1. AI automation

2. AI agents

While we’ve seen an explosion of RevOps agencies we’re starting to see a groundswell of AI Agencies. It’s only logical.

Consider this modest newsletter business. I still time bound (woohoo pomodoro sprints!) how much time I put into this.

• 2 hours on Saturdays writing (apologies if it doesn’t come out perfect, I put little to no time editing)

• 1-2 hours per week building in sandboxes to keep my hands-on-keyboard skills sharp

• 15 minutes recording what I’m doing on Loom

• 15 minutes a day crafting a LinkedIn post

Without an operating system I wouldn’t be able to do this on a regular basis. It would be too stressful for a one-person show.

But I’ve managed to flip the script here with AI Automation and agents. Imagine “RevOps Impact Newsletter Inc.” as an organization. Here’s the “org chart” below.

• Editor and publisher at the top

• Executive Assistant (remember, get organized)

• Researcher (source topics and go deep where possible)

• Content writer

• Sandbox builder (much of what I do is technical or process oriented in nature, someone has to do it)

Before I was only able to do the research and content writing myself. I’ve added sandbox building and expanded sponsorship offerings recently. The agents I’ve built have taken over the EA and research work.

I very much believe that not every task is suited for AI. I could in theory replace the content writing with AI but from what I’ve observed the quality of writing from AI seems inauthentic. Maybe that would change. If it does, then I think this newsletter as well as many other industries would be in for a world of hurt! (I’ll enjoy doing this for as long as I can and for as long as people enjoy reading it; also as long as it makes economic sense to do so - thank you paid members and sponsors).

The sandbox building isn’t far away from AI taking over as well in my opinion. What Sweep (not sponsored) has been able to build with a no-code visual builder to push changes into Salesforce is really impressive. But there’s NOTHING stopping an AI Prompt from mechanically building out the workflows for you.

The Human-In-The-Loop

Some processes you want a human in the loop. After all, your buyers (my readers) are human. Writing may very well have an uncanny valley of its own. But there is a day I believe where this chasm will be crossed. And we won’t look back.

I think I still play an essential part in my own process. And very much for a GTM organization. Much like how I want to empower a Sales Ops Analyst to do their best work, I sometimes will need to coach and direct to drive the best out of them. I’m still growing myself and love it when I receive coaching. It helps me get better 1% every day (it’s a saying, not actually 1% better per day). I’ve often heard that AI is like the hardest working intern. You wouldn’t let them press GO without inspecting the work quality. I very much believe this is the same with an AI-supported organization.

Will there be a place for AI SDRs? Yes I think so. Especially if the SDR is purely focused on setting meetings with very transactional qualification criteria.

Will there be a place for AI AEs? Yes I think so. Especially for high velocity sales motions.

Will there be a place for AI Deal Desk? Yes I think so.

Will there be a place for AI Compensation Dispute Resolutions? Yes I think so.

Instead of fighting it. Embrace it. Wear AI around you like a suit of armor. Be a 10x human if you can.

Here’s my Zapier AI prompt below: