No Humans Needed: An Alumni Ventures Big Idea

We’ve seen this trend coming. Stories are beginning to proliferate of companies built at a fraction of the cost and time as similar startups a decade ago. Meanwhile several Alumni Ventures portfolio companies are leveraging AI and robotics to deliver valuable efficiencies in their target markets. The image below highlights manufacturing and agriculture, but the trend of workers moving from laborious roles into knowledge-based roles holds true across industries. At the same time, the ratio of output per employee continues to grow as efficiencies are gained and fewer workers are needed.

THE RISE OF HUMAN-LIGHT BUSINESS MODELS

The quest for efficiency and scalability has always been at the heart of entrepreneurial innovation. With advancements in AI and automation, startups are now reimagining traditional business models to operate with minimal human intervention. This shift isn’t just about cost reduction; it’s about unlocking new levels of performance, consistency, and customer experience that were previously unattainable.

Take Qualiti, a startup developing quality assurance software for development teams, is lightening the manual load in the knowledge economy. Chef Robotics is helping to automate large-scale food service. And PodPlay has created “no humans involved” recreational concepts (think pickleball or ping-pong clubs) that allow users to enter and use recreational facilities without any human support. These companies exemplify how sectors once reliant on human labor transition to models where technology does the heavy lifting.

And This Trend Is Just Starting

As exciting as the current climate feels, recent reports from both McKinsey and Bain & Co suggest that the AI industry could experience compound annual growth rates of 40% – 50% in coming years.

Five Frontiers of Impact

Let’s explore five areas poised to be entry points for human-light models.

1. Retail

Brick & mortar…& software

• Current State: Traditional retail relies heavily on human staff for operations ranging from stocking shelves to managing checkouts. While e-commerce has disrupted the space, brick-and-mortar stores like grocery or big box retailers still depend on human interaction.
• Human-Light Future: Imagine stores where AI monitors inventory, robots restock shelves, and checkout is automated through sensors and computer vision — no lines, no cashiers. Amazon Go stores were the most visible model of this future, but have struggled. However, innovation is taking place elsewhere in the retail environment. InstaCart recently acquired Caper, a smart grocery cart that facilitates inventory management and simplified self-checkout with a fraction of the staff. Other companies, like Locus Robotics, are automating functions like picking and packing and helping to bridge the brick and mortar and e-commerce experiences.

2. Factories and Warehousing

Ghost warehouses

• Current State: Although manufacturing has seen automation, humans remain integral for quality control, maintenance, and complex tasks.
• Human-Light Future: Factories will operate autonomously, with AI-driven robotic systems handling production, maintenance, and self-optimization processes. Unspun, an AV investment, has developed an AI-powered 3D weaving machine for the fashion industry that can turn raw yarn into a finished clothing product with limited human labor or waste. This functionality eliminates several steps in clothing production and allows manufacturing to be moved back onshore with a superior economic profile to third-world production. In the world of metal fabrication, Machina Labs has created robots that can complete precise metal work to enable factories in aerospace, automotive, and beyond.

3. Transportation

A to B without the people

• Current State: The logistics and delivery industry is labor-intensive, with millions employed worldwide to move goods from point A to B. This is particularly burdensome in last-mile delivery, where batch sizes get smaller, and endpoints increase.
• Human-Light Future: Autonomous vehicles and drones will revolutionize delivery, particularly in the last mile. Self-driving long-haul trucks from startups like Aurora will ship goods between hubs, while small autonomous vehicles from companies like Starship will fulfill final deliveries without human intervention.

4. Finance

Your financial advisor runs on electricity

• Current State: Despite the rise of fintech, customers still feel secure in utilizing a human advisor for financial services. Financial advisors leverage human expertise for advising, trading, and customer service.
• Human-Light Future: Demographic changes and comfort with digital interfaces and AI have led to various platforms offering personalized financial advice. Companies like AV portfolio company Ellevest offer automated investing targeted at female consumers, ushering in a future of low-fee wealth management. At the same time, platforms like M1 Finance make automated wealth management a reality for thousands of customers.

5. Farming

Hey, Nebraska – Where are all the people?

• Current State: Food systems are among our economy’s most manual labor-intensive sectors. Farms hire seasonal labor for planting, tending, and harvesting crops year-round.
• Human-Light Future: Technology forms the foundation of farming, with large-scale, autonomous tractors from companies like FarmWise (an AV portfolio company) preparing soil and planting row crops. Meanwhile, robotic swarms — like those used by Greenfield Robotics — can be deployed for mapping, spraying, weeding, and picking crops at the per-plant level.

THE ROAD AHEAD

• AI and Robotics: Activity is already being seen in large enterprises and from small startups, and, as the McKinsey and Bain reports illustrate, we are still early on the growth curve. We are witnessing exponential growth in AI capabilities, with machine learning models becoming more sophisticated. Robotics has advanced to the point where machines can precisely perform delicate tasks. The combination of these two capabilities points to self-governed autonomy very soon.
• IoT and Connectivity: The Internet of Things connects devices unprecedentedly, allowing for real-time data exchange and autonomous decision-making across systems. Layering advances in AI analytics to the growing IoT data sets should yield impressive efficiencies across industries.
• Regulatory Environment: Regulations are slowly adapting to technological advancements. However, the pace varies by region and industry, influencing how quickly human-light models can be fully realized. Entrepreneurs will look to jurisdictions of regulatory leadership to help predict how regulation will roll out globally.
• Challenges: Transitioning to human-light models isn’t without hurdles. Ethical considerations regarding employment, data privacy, and the societal impact of reduced human roles must be addressed.

AREAS ON THE HORIZON

Beyond these five sectors, human-light models will soon impact other areas:

1. Healthcare Automation: AI and robotics hint at a future with great quality and consistency of care. Robotic surgeries from world-leading physicians and AI-augmented clinical support tools stand to continue improving healthcare outcomes. Safety and compliance will remain an important factor here as well.
2. Education Evolution: Customized and adaptive tutoring and massive online access to generative content will make education more accessible. Students will learn with AI natively and human teachers will be able to focus on areas that require special attention and precise EQ. The role of the teacher moving forward may become more of a resource guide than the ‘sage on the stage’ model of today.
3. Legal Logic: AI trained to navigate case law and local regulations will amplify attorneys’ bandwidth. Generative AI can draft contracts and perhaps even navigate disputes with specificity to the fact patterns presented. Lawyers’ roles will shift to settling highly complex issues and managing relationships.

EMBRACING THE FUTURE

For venture investors, the rise of human-light startups represents both an opportunity and a challenge. Investing in companies at the forefront of this shift can yield significant returns. Still, it requires a deep understanding of the technological landscape and its implications within its target industry.

Within years, expect to see the first $100M business created by a sole entrepreneur.

The move towards human-light business models is not just a trend; it’s a fundamental shift in how companies operate and deliver value. For those in the venture space, now is the time to think critically about the future, identify the startups leading this change, and consider the broader impact on society and the economy.

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