Buy, Build, Deploy: Using M&A to Drive AI Transformation — Prathik Naidu, Long Lake

Hello everyone. My Hello everyone. My name is Pratik Naidu. I'm a name is Pratik Naidu. I'm a name is Pratik Naidu. I'm a founding partner at founding partner at founding partner at Long Lake, and today I'm Long Lake, and today I'm Long Lake, and today I'm excited to share excited to share excited to share more about why more about why more about why business acquisitions are a business acquisitions are a business acquisitions are a unique unique unique strategy for strategy for strategy for bringing AI to the bringing AI to the bringing AI to the real world. Let real world. Let 's start with an experience that is 's start with an experience that is very familiar to very familiar to very familiar to many of you. many of you. many of you. Let's say you're Let's say you're Let's say you're building an AI product building an AI product building an AI product and trying and trying and trying to sell it to a to sell it to a to sell it to a corporate corporate corporate client. Where to client. Where to client. Where to start? You found the start? You found the start? You found the problem. You created an problem. You created an problem. You created an agent for it, and it agent for it, and it agent for it, and it works, but only for works, but only for works, but only for one narrow one narrow use case. This is a use case. This is a great initial great initial great initial stage. But now you stage. But now you stage. But now you need to actually need to actually need to actually launch it into launch it into launch it into production. This may production. This may production. This may involve involve security clearance, security clearance, internal internal internal coordination, and coordination, and coordination, and integration with integration with twenty-year- twenty-year- old systems. It's a lot of old systems. It's a lot of old systems. It's a lot of hard work, and hard work, and hard work, and it's usually the first it's usually the first it's usually the first wall to wall to wall to overcome to overcome to overcome to implement AI in a implement AI in a implement AI in a corporation. But once corporation. But once corporation. But once you've passed this you've passed this you've passed this stage, now you need to stage, now you need to stage, now you need to get the team get the team get the team to use it. to use it. Typically, you will be Typically, you will be improving the improving the improving the product interface, product interface, product interface, conducting training, conducting training, conducting training, collecting collecting collecting user feedback, and the user feedback, and the user feedback, and the typical typical typical question arises: whose question arises: whose question arises: whose job is it to drive job is it to drive job is it to drive this adoption? Yours this adoption? Yours as an AI provider as an AI provider as an AI provider or a client you or a client you or a client you work with? And work with? And work with? And let's say you've been through all of this let's say you've been through all of this let's say you've been through all of this and are now and are now and are now trying to trying to trying to figure out how I can make a figure out how I can make a figure out how I can make a profit on the profit on the profit on the agent I just agent I just agent I just deployed. You deployed. You deployed. You usually usually usually work on work on work on several different questions.

several different questions. several different questions. Sell ​​tokens or Sell ​​tokens or Sell ​​tokens or subscriptions, or maybe subscriptions, or maybe subscriptions, or maybe a bit of both? a bit of both? a bit of both? How to deal with How to deal with How to deal with customer customer customer price sensitivity? And then how do price sensitivity? And then how do price sensitivity? And then how do you actually measure you actually measure you actually measure return on investment return on investment return on investment (ROI)? The bigger (ROI)? The bigger (ROI)? The bigger question here is: how can an AI question here is: how can an AI startup working with startup working with startup working with corporations corporations corporations get value get value get value from an implemented from an implemented from an implemented solution? All of this may solution? All of this may solution? All of this may sound very sound very sound very familiar to many of familiar to many of familiar to many of you. I'm sure, and these you. I'm sure, and these you. I'm sure, and these deployment barriers deployment barriers deployment barriers reflect a fairly reflect a fairly reflect a fairly common problem: you common problem: you common problem: you build the solution build the solution build the solution from the outside, and that makes from the outside, and that makes from the outside, and that makes implementing AI very implementing AI very implementing AI very difficult. And it's important difficult. And it's important difficult. And it's important to note that it's to note that it's to note that it's not about the model. Models, not about the model. Models, not about the model. Models, as you know, are becoming as you know, are becoming as you know, are becoming incredibly high quality. incredibly high quality. incredibly high quality. Intelligence grows Intelligence grows Intelligence grows exponentially. So exponentially. So exponentially. So what makes it so what makes it so what makes it so difficult? I want difficult? I want difficult? I want to share to share to share a few observations a few observations a few observations about why about why about why implementing AI in implementing AI in implementing AI in business is a challenging business is a challenging business is a challenging task. First, task. First, task. First, organizations are organizations are organizations are incredibly complex. incredibly complex. incredibly complex. On paper, your On paper, your On paper, your organizational organizational organizational structure might structure might structure might look like what's on look like what's on look like what's on the left. You know, there's an the left. You know, there's an the left. You know, there's an owner, there are teams, owner, there are teams, owner, there are teams, managers, it's a managers, it's a managers, it's a standard standard standard team structure. But team structure. But team structure. But in reality, in reality, in reality, organizations are much more organizations are much more organizations are much more multifaceted. There are multifaceted. There are multifaceted. There are solutions that are rooted solutions that are rooted solutions that are rooted in a network of interactions between in a network of interactions between in a network of interactions between team members, often team members, often team members, often people with people with people with many years of many years of many years of experience. They experience. They experience. They interact with the interact with the interact with the sales department, with the sales department, with the sales department, with the operations department operations department . The owner often . The owner often . The owner often relies on them.

relies on them. relies on them. Therefore, creating an Therefore, creating an Therefore, creating an agent as a third-party agent as a third-party agent as a third-party provider is difficult provider is difficult , because you need to , because you need to , because you need to actually actually actually integrate into integrate into integrate into the organization. The second the organization. The second the organization. The second reason I reason I reason I want to talk about is want to talk about is want to talk about is that you won't that you won't that you won't be able to deliver the be able to deliver the be able to deliver the full value of full value of full value of an implementation without an implementation without an implementation without understanding the nuances of how the understanding the nuances of how the understanding the nuances of how the business works. business works. business works. The vendor can The vendor can The vendor can integrate with integrate with integrate with your your your accounting systems, such as a CRM accounting systems, such as a CRM accounting systems, such as a CRM or ticketing system, or ticketing system, or ticketing system, or even with or even with or even with document repositories document repositories where where where your SOPs, contracts, or your SOPs, contracts, or your SOPs, contracts, or old correspondence are stored. This is a old correspondence are stored. This is a old correspondence are stored. This is a very valuable source of very valuable source of very valuable source of information, very information, very information, very useful. But useful. But useful. But the reality is that the reality is that the reality is that business, especially in business, especially in business, especially in complex areas, complex areas, complex areas, relies on relies on relies on human judgment. human judgment. human judgment. It's the exceptions, It's the exceptions, It's the exceptions, the edge cases, the the edge cases, the the edge cases, the tacit knowledge, the quick tacit knowledge, the quick tacit knowledge, the quick questions to questions to questions to the expert—that's what the expert—that's what the expert—that's what really matters. really matters. really matters. And this is what largely And this is what largely And this is what largely determines how the determines how the determines how the company operates. company operates. company operates. This is the operational This is the operational This is the operational reality. You reality. You reality. You need to work with need to work with need to work with those who do those who do those who do the work to understand the work to understand what quality what quality what quality work looks like. The third reason work looks like. The third reason I want I want I want to emphasize is that even to emphasize is that even to emphasize is that even if you are able if you are able if you are able to provide full to provide full to provide full value, as an AI value, as an AI provider it is quite provider it is quite provider it is quite difficult to get it.

difficult to get it. difficult to get it. Let's say you Let's say you Let's say you get a get a get a seven-figure contract, which is seven-figure contract, which is seven-figure contract, which is pretty impressive. But pretty impressive. But pretty impressive. But how to assess how to assess how to assess the long-term business the long-term business value of this value of this value of this contract? There are many contract? There are many contract? There are many important questions. Will important questions. Will important questions. Will customers customers customers continue to continue to continue to subscribe? Will you be able to subscribe? Will you be able to subscribe? Will you be able to maintain prices maintain prices maintain prices as models as models as models improve and improve and improve and alternatives alternatives alternatives become cheaper? become cheaper? Let's assume that within the framework of Let's assume that within the framework of this this this million-dollar-a- million-dollar-a- million-dollar-a- year contract, the client receives a year contract, the client receives a year contract, the client receives a considerable benefit. considerable benefit. considerable benefit. In fact, maybe In fact, maybe In fact, maybe $5 million per $5 million per $5 million per year of EBITDA impact. What is year of EBITDA impact. What is interesting is that a interesting is that a sustainable business has a sustainable business has a sustainable business has a long history, long history, long history, long-term relationships with long-term relationships with long-term relationships with customers, and a customers, and a customers, and a proven model with proven model with proven model with real real real economic economic economic indicators. You indicators. You indicators. You are adding to the profits of a are adding to the profits of a are adding to the profits of a business business business whose value can already whose value can already whose value can already be assessed. So, be assessed. So, be assessed. So, using using using roughly a roughly a roughly a conservative conservative conservative 10x multiple, you 10x multiple, you 10x multiple, you can generate can generate $50 million in enterprise value for your client, which is enterprise value for your client, which is really exciting. So really exciting. So really exciting. So the question arises: as a the question arises: as a the question arises: as a supplier, have you supplier, have you supplier, have you done all the work? done all the work? done all the work? You deployed You deployed You deployed agents, overcame all agents, overcame all agents, overcame all barriers to integration with barriers to integration with barriers to integration with systems, and worked systems, and worked systems, and worked with a team. But the with a team. But the with a team. But the biggest impact biggest impact biggest impact is reflected in the is reflected in the is reflected in the profit and profit and profit and loss statement of the business loss statement of the business loss statement of the business you worked with. These are you worked with. These are you worked with. These are typical obstacles and typical obstacles and typical obstacles and challenges when challenges when challenges when implementing AI implementing AI implementing AI from the outside in.

from the outside in. from the outside in. So why So why So why not just create not just create not just create such a company and such a such a company and such a such a company and such a business yourself, business yourself, business yourself, implementing AI into implementing AI into implementing AI into its very foundation from its very foundation from its very foundation from day one? This is actually a day one? This is actually a day one? This is actually a very sound very sound very sound strategy. You can strategy. You can strategy. You can improve the entire improve the entire improve the entire workflow, not workflow, not workflow, not just a narrow just a narrow just a narrow part of it. You are selling the part of it. You are selling the part of it. You are selling the work itself, not just work itself, not just work itself, not just one specific one specific one specific tool. And, tool. And, tool. And, importantly, you own the importantly, you own the importantly, you own the results. So, results. So, results. So, the profits and losses and the the profits and losses and the the profits and losses and the value you value you value you create belong to create belong to create belong to you. And many of you. And many of you. And many of these companies will be these companies will be these companies will be incredible. We incredible. We incredible. We think this is a great think this is a great think this is a great strategy. But I strategy. But I strategy. But I also want to draw also want to draw also want to draw attention to some of the attention to some of the attention to some of the challenges that arise challenges that arise challenges that arise with this approach. with this approach. First, you First, you start without start without start without any clients. any clients. any clients. It is difficult to set up It is difficult to set up It is difficult to set up distribution. You have no distribution. You have no brand reputation whatsoever. brand reputation whatsoever. Therefore, it becomes difficult Therefore, it becomes difficult Therefore, it becomes difficult to develop. And it is difficult to to develop. And it is difficult to to develop. And it is difficult to hire experts, hire experts, hire experts, especially in new especially in new especially in new niche or important niche or important niche or important industries where clients industries where clients industries where clients may need may need may need various specialized various specialized various specialized services. Here is an example. services. Here is an example. services. Here is an example. If you are a If you are a healthcare leader planning to healthcare leader planning to build a new build a new build a new surgery, would surgery, would surgery, would you outsource the project to an you outsource the project to an AI architecture startup or to a architecture startup or to a architecture startup or to a firm you have firm you have firm you have worked with for 20 years that worked with for 20 years that worked with for 20 years that knows the standards and knows the standards and knows the standards and nuances of how you nuances of how you nuances of how you design buildings and design buildings and design buildings and can can can trust to do the trust to do the trust to do the entire job?

entire job? entire job? This is a completely different This is a completely different This is a completely different implementation model. So the implementation model. So the implementation model. So the main takeaway main takeaway main takeaway here is that here is that here is that the best firms have spent the best firms have spent the best firms have spent decades decades decades acquiring their acquiring their acquiring their clients, building a clients, building a clients, building a brand and trust, brand and trust, brand and trust, and creating an and creating an and creating an incredible team incredible team incredible team to deliver quality to deliver quality to deliver quality services. So instead of services. So instead of services. So instead of trying to trying to trying to sell an AI agent to a sell an AI agent to a sell an AI agent to a company externally or company externally or company externally or building everything from scratch, building everything from scratch, building everything from scratch, what if you could what if you could work much more closely with already work much more closely with already existing existing existing incredible incredible incredible businesses through businesses through businesses through acquisition? I want to acquisition? I want to acquisition? I want to talk a little talk a little talk a little more about why more about why more about why ownership is ownership is ownership is such an interesting such an interesting such an interesting strategy in this strategy in this strategy in this context. Let's start with the context. Let's start with the context. Let's start with the engineering side, engineering side, engineering side, namely, access. namely, access. namely, access. Your team’s ability to Your team’s ability to talk to talk to those doing those doing those doing the work, understand the work, understand the work, understand their tasks, their tasks, their tasks, build relationships, build relationships, build relationships, learn who the learn who the learn who the key experts are, the key experts are, the key experts are, the veterans, the people with veterans, the people with veterans, the people with 20 years of experience—this is 20 years of experience—this is 20 years of experience—this is critical critical critical to creating to creating to creating agents who don’t agents who don’t agents who don’t just solve just solve just solve one workflow one workflow one workflow or task, but or task, but or task, but embrace full embrace full embrace full automation and automation and service delivery capabilities for the entire service delivery capabilities for the entire business. The second is business. The second is business. The second is data. Any data. Any data. Any business can be business can be business can be viewed as a living viewed as a living viewed as a living environment with environment with environment with real tasks real tasks , non-standard , non-standard , non-standard situations, and situations, and situations, and real real real answers to whether an answers to whether an answers to whether an agent has coped with agent has coped with agent has coped with something or not. And this is a something or not. And this is a something or not. And this is a huge opportunity huge opportunity huge opportunity to use this to use this to use this information, this information, this information, this signal, to signal, to signal, to improve your improve your improve your agents and models.

agents and models. But importantly, in But importantly, in operational terms, the operational terms, the operational terms, the alignment of incentives is of alignment of incentives is of alignment of incentives is of paramount paramount paramount importance. Ownership importance. Ownership importance. Ownership solves this issue. solves this issue. solves this issue. You only win You only win You only win when when when your your your team and your business win team and your business win . And there are no separate . And there are no separate . And there are no separate revenue targets or revenue targets or revenue targets or distractions to distractions to distractions to other customers. This other customers. This other customers. This creates an incredible creates an incredible creates an incredible level of alignment, level of alignment, level of alignment, allowing you to identify allowing you to identify allowing you to identify and remove obstacles and remove obstacles and remove obstacles for faster for faster for faster implementation and implementation and implementation and achievement of shared achievement of shared achievement of shared goals. Results goals. Results goals. Results really really really matter here. Another matter here. Another matter here. Another aspect is trust, aspect is trust, aspect is trust, which we already which we already which we already talked about. And it's important talked about. And it's important talked about. And it's important that instead of that instead of that instead of coming in from the outside coming in from the outside coming in from the outside or building everything from or building everything from or building everything from scratch, ownership has scratch, ownership has scratch, ownership has this element of trust this element of trust this element of trust built in from the built in from the built in from the beginning. You beginning. You beginning. You have a brand that have a brand that have a brand that has been built over has been built over has been built over decades, along with decades, along with decades, along with all the all the all the customer relationships. And this customer relationships. And this customer relationships. And this naturally contributes to the idea of naturally contributes to the idea of naturally contributes to the idea of scaling. scaling. scaling. Starting with a large Starting with a large Starting with a large base of customers, base of customers, base of customers, a team of experts a team of experts a team of experts capable of providing capable of providing capable of providing great service, and great service, and great service, and cash flow to cash flow to cash flow to invest in growth invest in growth invest in growth and new products—that's and new products—that's and new products—that's very powerful. very powerful. The important point is The important point is that these five that these five that these five characteristics are not characteristics are not characteristics are not simply independent simply independent simply independent advantages. They advantages. They advantages. They create something create something create something much more powerful—a much more powerful—a build-up effect, where build-up effect, where build-up effect, where your agents and your agents and your agents and employees employees employees continue to operate in continue to operate in continue to operate in real-world operations.

real-world operations. You can understand You can understand how work gets done how work gets done how work gets done , create , create , create real data that real data that real data that leads to real leads to real leads to real results, and that results, and that results, and that learning learning learning accumulates. And this accumulates. And this accumulates. And this flywheel is really flywheel is really flywheel is really interesting. It contains interesting. It contains interesting. It contains all the elements of all the elements of all the elements of ownership to power ownership to power ownership to power this flywheel from this flywheel from this flywheel from day one. So what's interesting is that day one. So what's interesting is that day one. So what's interesting is that property can property can accumulate quickly over accumulate quickly over time. So, we time. So, we time. So, we discussed why discussed why discussed why ownership is so ownership is so ownership is so interesting. But which interesting. But which interesting. But which markets are ripe for markets are ripe for markets are ripe for takeover, especially takeover, especially takeover, especially in the age of AI? I want to in the age of AI? I want to in the age of AI? I want to start with the economics of start with the economics of start with the economics of software software software . This is a . This is a . This is a global software market global software market . . Most of us Most of us Most of us have spent a lot of have spent a lot of have spent a lot of time and careers time and careers time and careers building in this area. And building in this area. And , as you know, this is a fairly , as you know, this is a fairly , as you know, this is a fairly large market. But large market. But large market. But the interesting thing is that the interesting thing is that software has always software has always been sold as been sold as been sold as tools for tools for tools for people to do people to do people to do work. If work. If work. If you look at it more broadly, it is a you look at it more broadly, it is a you look at it more broadly, it is a service economy. This is a service economy. This is a service economy. This is a global market global market global market worth $70 trillion worth $70 trillion worth $70 trillion . And the important . And the important . And the important realization here is that realization here is that owning the owning the results of services results of services results of services from start to finish from start to finish from start to finish is much more valuable. is much more valuable. is much more valuable. And that is what inspires us. And that is what inspires us. And that is what inspires us. This is a huge market This is a huge market This is a huge market opportunity. But there is an opportunity. But there is an opportunity. But there is an important important important observation: observation: observation: within the service business, there within the service business, there is usually one is usually one problem. Labor costs problem. Labor costs usually increase usually increase with income. For with income. For with income. For example, a example, a example, a community manager at a community manager at a housing housing association management company may association management company may association management company may only manage a certain only manage a certain only manage a certain number of properties.

number of properties. number of properties. An architect can An architect can An architect can only design a only design a only design a limited number of limited number of limited number of hospitals or schools. So, hospitals or schools. So, hospitals or schools. So, if you want to have if you want to have if you want to have more clients, you will more clients, you will more clients, you will have to hire have to hire have to hire more people. And this is a more people. And this is a more people. And this is a typical challenge for typical challenge for typical challenge for business. If business. If business. If you compare that to a you compare that to a software company, for software company, for every $100 in every $100 in every $100 in revenue, a typical IT revenue, a typical IT business keeps business keeps business keeps about $80. So the about $80. So the about $80. So the marginal cost of marginal cost of marginal cost of development is very low, development is very low, development is very low, so these companies are so these companies are so these companies are incredible, and they incredible, and they incredible, and they can scale can scale can scale very quickly. very quickly. However, the service However, the service business works completely business works completely business works completely differently. For every differently. For every differently. For every $100 in additional $100 in additional $100 in additional revenue, you typically revenue, you typically revenue, you typically spend about spend about spend about $80 on $80 on $80 on operating and operating and operating and overhead costs. You overhead costs. You overhead costs. You need to hire, need to hire, need to hire, train, and manage train, and manage train, and manage your team. That's why your team. That's why your team. That's why many founders many founders many founders who built great who built great who built great service companies service companies service companies stopped chasing stopped chasing stopped chasing growth not because of a growth not because of a growth not because of a lack of ambition or a lack of ambition or a lack of ambition or a lack of lack of lack of market opportunity market opportunity . These are huge markets. . These are huge markets. . These are huge markets. And because of the difficulty And because of the difficulty And because of the difficulty of scaling, because of scaling, because of scaling, because when you do when you do when you do a lot of a lot of a lot of work with $100, work with $100, work with $100, you you you only keep about $20. You could only keep about $20. You could only keep about $20. You could say that this is a say that this is a say that this is a huge 80 huge 80 percent percent percent marginal tax on marginal tax on marginal tax on growth, which makes it growth, which makes it growth, which makes it very difficult to both very difficult to both very difficult to both start such a start such a start such a business and business and business and scale it. What is scale it. What is very interesting is that very interesting is that artificial intelligence artificial intelligence artificial intelligence actually reduces actually reduces actually reduces the cost the cost the cost of service of service of service while improving while improving while improving the quality of service.

the quality of service. the quality of service. Look at our Look at our Look at our graph: revenue grows graph: revenue grows graph: revenue grows in proportion to in proportion to labor costs, but when you labor costs, but when you implement AI, you implement AI, you implement AI, you see that you gain see that you gain see that you gain operational leverage. operational leverage. operational leverage. So, your labor costs So, your labor costs no longer increase no longer increase proportionally thanks to proportionally thanks to proportionally thanks to AI. You will still AI. You will still AI. You will still need to need to need to hire a great hire a great hire a great team of experts team of experts team of experts to provide to provide to provide customer service, but customer service, but customer service, but the economics of these the economics of these the economics of these businesses are starting to businesses are starting to businesses are starting to look more and more like look more and more like software. So software. So the concept of acquisition, the concept of acquisition, the concept of acquisition, deep deep deep partnerships with partnerships with partnerships with great companies, great companies, great companies, and using AI and using AI and using AI to scale and to scale and to scale and improve improve improve service quality—that's what service quality—that's what service quality—that's what inspires us at Long Lake. inspires us at Long Lake. Briefly about us. Long Lake is a holding is a holding is a holding company company company specializing in specializing in specializing in applied AI. We applied AI. We applied AI. We partner with partner with partner with incredible incredible incredible companies and companies and companies and have raised $7.5 billion in have raised $7.5 billion in have raised $7.5 billion in capital from Elad capital from Elad capital from Elad Gil, General Catalyst, Alpha Wave, Gil, General Catalyst, Alpha Wave, Gil, General Catalyst, Alpha Wave, D1, and many others. D1, and many others. D1, and many others. We started working We started working We started working about 3 years ago. about 3 years ago. about 3 years ago. Our main goal is to Our main goal is to acquire the best acquire the best acquire the best service companies, service companies, service companies, partner with them partner with them partner with them to transform their to transform their to transform their operational processes operational processes , help them , help them , help them grow faster, and grow faster, and grow faster, and provide a better provide a better provide a better customer experience.

customer experience. Today, we Today, we cooperate with 40 cooperate with 40 cooperate with 40 companies in various companies in various companies in various markets: household markets: household markets: household services, architecture, services, architecture, services, architecture, HR, and many others. We are a great HR, and many others. We are a great team of 55 team of 55 team of 55 professionals in professionals in professionals in technology, finance, technology, finance, technology, finance, and and and operations. We operations. We operations. We are growing. We have an are growing. We have an are growing. We have an eclectic mix of eclectic mix of eclectic mix of former founders former founders , people from the military, Palantir, , people from the military, Palantir, , people from the military, Palantir, a lot of familiar names a lot of familiar names a lot of familiar names here. And we recently here. And we recently here. And we recently announced our announced our announced our partnership with Amex GBT. partnership with Amex GBT. partnership with Amex GBT. This is a This is a This is a $6.3 billion deal that $6.3 billion deal that $6.3 billion deal that brings us into the brings us into the brings us into the corporate corporate corporate travel space, which we are travel space, which we are travel space, which we are incredibly excited about. We are incredibly excited about. We are incredibly excited about. We are modeled after modeled after modeled after many holding many holding many holding companies that came companies that came companies that came before us, but with a very before us, but with a very before us, but with a very interesting interesting interesting observation: AI is observation: AI is observation: AI is raising the bar for raising the bar for business transformation. And this is the business transformation. And this is the lever of excellence lever of excellence lever of excellence that we enthusiastically that we enthusiastically that we enthusiastically seek to use seek to use . So, we talked . So, we talked . So, we talked about why about why about why property. We property. We property. We talked about services talked about services talked about services in particular. And what in particular. And what in particular. And what service businesses are service businesses are service businesses are actually attractive to actually attractive to actually attractive to own? I own? I own? I want to start with an want to start with an want to start with an important important important observation: observation: observation: as models as models as models get better, the price of get better, the price of get better, the price of intelligence is rapidly intelligence is rapidly intelligence is rapidly decreasing. And it's decreasing. And it's decreasing. And it's just incredible to just incredible to just incredible to see. I think this see. I think this will only continue.

will only continue. So, if intelligence is So, if intelligence is So, if intelligence is getting cheaper, what getting cheaper, what getting cheaper, what remains expensive? remains expensive? remains expensive? We really We really We really focus on mission- focus on mission- focus on mission- critical critical critical businesses, and it all businesses, and it all businesses, and it all starts with starts with starts with a few key a few key a few key questions that we questions that we questions that we typically evaluate these typically evaluate these typically evaluate these companies on. First: is there a companies on. First: is there a companies on. First: is there a customer base that customer base that customer base that trusts these businesses to deliver trusts these businesses to deliver trusts these businesses to deliver real end-to-end real end-to-end real end-to-end results? Second: is there results? Second: is there results? Second: is there human judgment in human judgment in human judgment in the service actually the service actually the service actually provided? And third: are provided? And third: are provided? And third: are there regulatory there regulatory there regulatory reasons that reasons that reasons that determine determine determine responsibility when responsibility when responsibility when making such making such making such acquisition decisions? acquisition decisions? I think the important thing is that I think the important thing is that you have to be you have to be you have to be responsible for the responsible for the responsible for the result, and this is a result, and this is a result, and this is a typical typical typical characteristic of characteristic of characteristic of many such many such many such service businesses. service businesses. To add details: To add details: this is not just this is not just this is not just preparing a mailing preparing a mailing preparing a mailing for the homeowner, for the homeowner, for the homeowner, but a real solution to an but a real solution to an urgent urgent leak problem. This is not leak problem. This is not leak problem. This is not just extracting just extracting just extracting data from documents, but data from documents, but data from documents, but actually taking actually taking actually taking responsibility for a responsibility for a responsibility for a complex tax complex tax complex tax decision. And this is not decision. And this is not decision. And this is not just help with just help with just help with booking a flight, but booking a flight, but booking a flight, but dealing with sudden dealing with sudden dealing with sudden changes, which I'm changes, which I'm changes, which I'm sure many sure many sure many of you have encountered. Such of you have encountered. Such of you have encountered. Such businesses are rare.

businesses are rare. businesses are rare. You need to answer You need to answer You need to answer all these questions, all these questions, all these questions, and many more, and and many more, and and many more, and also have a team also have a team also have a team that is committed to such a that is committed to such a that is committed to such a partnership. To partnership. To partnership. To achieve this, you achieve this, you achieve this, you must consider must consider must consider many businesses. many businesses. many businesses. Great investment Great investment Great investment decisions come decisions come decisions come with choice. with choice. with choice. So you have to have a So you have to have a So you have to have a wide funnel and wide funnel and wide funnel and then an incredibly then an incredibly then an incredibly strict filter. We strict filter. We strict filter. We focus on focus on focus on businesses that have businesses that have businesses that have incredible incredible fundamentals, as well as a fundamentals, as well as a great opportunity great opportunity great opportunity for AI, where we can for AI, where we can for AI, where we can collaborate closely. collaborate closely. We review We review about 5,000 deals a about 5,000 deals a about 5,000 deals a year, but again, year, but again, year, but again, we are very selective and we are very selective and we are very selective and thorough about what thorough about what we focus on and we focus on and who we partner with. who we partner with. Perfectly. So, once you’ve Perfectly. So, once you’ve found your business and found your business and found your business and become a partner in the become a partner in the become a partner in the company, what does company, what does P&L transformation actually look like? And I P&L transformation actually look like? And I think a very think a very think a very simple way simple way simple way to explain this is through to explain this is through to explain this is through the visualization of a J-curve the visualization of a J-curve . So, you start with . So, you start with . So, you start with investing in investing in investing in AI implementation. You AI implementation. You AI implementation. You have a platform, have a platform, have a platform, you build technology, you build technology, you build technology, you fix you fix you fix workflows, you spend workflows, you spend workflows, you spend a lot of team time to make a lot of team time to make a lot of team time to make it work. And it work. And it work. And this is very hard work.

this is very hard work. this is very hard work. You have to make it You have to make it You have to make it work inside the work inside the work inside the business. Speaking of business. Speaking of business. Speaking of the challenges of building the challenges of building the challenges of building from the outside in, you need to from the outside in, you need to work very closely with work very closely with their team, their team, their team, iterating, iterating, iterating, validating the product, validating the product, validating the product, potentially training potentially training potentially training new models, learning new models, learning new models, learning all the unique all the unique all the unique workflows and data workflows and data workflows and data within that business. within that business. within that business. But once you But once you But once you get over that get over that get over that hill, you'll see hill, you'll see hill, you'll see that people that people that people are actually using are actually using are actually using the product, which is the product, which is the product, which is incredibly exciting, incredibly exciting, incredibly exciting, and you'll start and you'll start and you'll start to discover a lot of to discover a lot of to discover a lot of potential. potential. potential. Time saving, usage rate Time saving, usage rate is growing rapidly. They is growing rapidly. They produce the same produce the same produce the same result in fewer result in fewer result in fewer hours. But hours. But hours. But this is not the end of the journey this is not the end of the journey . It is important that we . It is important that we . It is important that we want to get want to get want to get real value and real value and real value and create a real create a real create a real business impact with business impact with business impact with our our partner companies. So, you partner companies. So, you partner companies. So, you have to actually have to actually have to actually put that put that put that potential into action. potential into action. potential into action. Think about Think about Think about aligning incentives, aligning incentives, aligning incentives, working closely with working closely with working closely with management management management teams and teams and teams and trusted partners trusted partners trusted partners to achieve to achieve to achieve business results, business results, business results, drive growth, and drive growth, and drive growth, and improve improve improve customer and customer and customer and employee NPS. This is all employee NPS. This is all employee NPS. This is all part of the equation part of the equation part of the equation for achieving for achieving for achieving real impact in real impact in real impact in these businesses. And these businesses. And these businesses. And once you do all of this once you do all of this once you do all of this , you will have a , you will have a , you will have a real impact on the P&L. real impact on the P&L. real impact on the P&L. Higher revenue per Higher revenue per Higher revenue per employee, but employee, but employee, but importantly, significantly better importantly, significantly better importantly, significantly better quality of quality of quality of service for service for service for our customers. And I our customers. And I our customers. And I think what's think what's think what's cool about this is that it's not cool about this is that it's not cool about this is that it's not just an just an just an individual individual individual action plan that you action plan that you action plan that you run once run once run once for each individual for each individual for each individual business. If you have a business. If you have a business. If you have a platform and platform and platform and strategy for strategy for strategy for implementing AI and implementing AI and implementing AI and business transformation business transformation , it can , it can , it can multiply quickly. You multiply quickly. You multiply quickly. You get faster get faster agent deployment times and a faster agent deployment times and a faster path to P&L impact path to P&L impact path to P&L impact for all new for all new for all new businesses you businesses you businesses you partner with. And we partner with. And we partner with. And we see this at Long Lake in the see this at Long Lake in the see this at Long Lake in the more than 40 companies more than 40 companies we already

we already we already work with work with work with today. Of course, it's today. Of course, it's today. Of course, it's not just about AI and not just about AI and not just about AI and business transformation business transformation . If you look . If you look . If you look deeper, it takes a deeper, it takes a deeper, it takes a pretty unique pretty unique pretty unique team to actually team to actually team to actually own, manage, and own, manage, and own, manage, and transform. So transform. So transform. So you have to buy you have to buy you have to buy these businesses, have an these businesses, have an these businesses, have an M&A team that can M&A team that can M&A team that can partner with partner with partner with world- world- world- class businesses, work class businesses, work class businesses, work very closely with them to very closely with them to very closely with them to build these relationships build these relationships build these relationships and inspire the and inspire the and inspire the future. And then you future. And then you future. And then you really have to get down really have to get down really have to get down to the work of to the work of to the work of creating, and that's very creating, and that's very creating, and that's very hard work. You have to hard work. You have to hard work. You have to fly to Minneapolis, fly to Minneapolis, fly to Minneapolis, to Portland, go to to Portland, go to to Portland, go to London, spend time London, spend time London, spend time with the team to with the team to with the team to actually build and actually build and actually build and push the boundaries of push the boundaries of push the boundaries of agent implementation agent implementation . Again, not just . Again, not just . Again, not just for one narrow for one narrow for one narrow case, but for the entire case, but for the entire case, but for the entire activity in general. And activity in general. And activity in general. And to really to really to really make this make this make this implementation happen, implementation happen, implementation happen, you need a great you need a great operations team that operations team that can deliver can deliver can deliver real-world usage real-world usage , right? Think , right? Think , right? Think about that J-curve, okay? Don't about that J-curve, okay? Don't about that J-curve, okay? Don't just focus on just focus on just focus on productivity and productivity and productivity and time savings. How do you time savings. How do you time savings. How do you ensure that your ensure that your ensure that your work truly work truly work truly benefits benefits benefits the businesses of the companies the businesses of the companies the businesses of the companies you you you work with and work with and work with and provides a significantly provides a significantly provides a significantly better customer better customer better customer experience in the services experience in the services experience in the services you provide? So, you provide? So, you provide? So, if you are interested in if you are interested in if you are interested in being responsible for being responsible for being responsible for results and results and results and collaborating with collaborating with collaborating with incredible incredible incredible service service service companies, companies, companies, please apply.

please apply. please apply. We are passionate about this We are passionate about this We are passionate about this idea. We believe there idea. We believe there idea. We believe there are many opportunities are many opportunities are many opportunities for further for further for further development in the development in the development in the service sector, so please service sector, so please service sector, so please contact us if you contact us if you contact us if you have any questions. have any questions.