Anthony Onesto argues that 2024 will be “the year of automation.” He situates this claim within a return from growth-at-all-costs (blitzscaling) toward classic finance fundamentals (grow while being profitable). Market pressure from LPs/VCs and recent corporate behavior (Facebook/Instagram cost cuts and revenue focus; Netflix’s global production and recommendation algorithms) create incentives to both cut costs and grow revenue simultaneously. Automation—bolstered by AI advances and anticipated autonomous agents—is presented as the primary route to achieve growth with maintained or reduced headcount costs. Onesto cites industry estimates (automation market growth) and notes practical caveats: implementation cost, tooling difficulty, investment timelines, and task displacement (reassigning workers to strategic roles). He recommends a task-analysis approach to identify automatable tasks per role.
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2023 is almost over and of course, we're now all looking to 2024. For me, 2024 is going to be the year of automation. Here's why. Hey everyone, it's Anthony Ness and this is my burn the box drop for this week. Automation, folks. 2024, it's going to be the year of automation. But before I dive into that, I want to talk a little bit about the history of business. So many, many years ago, there was a place in business and there were fundamentals in place where you'd have revenue, you deduct your costs and you had profits. And then for whatever reason, we slowly moved. It's called in 2018, blitzscaling was this idea of just grow, grow your company by a hundred percent each year. We don't care if you're burning all sorts of money, we don't care about profits, we just want growth. It was, you know, you've heard terms like grow to burn or burn to grow. So we're actually returning back to those business fundamentals that we all learn in college finance classes. Revenue and profits. We want you to grow, but also be profitable. And so that whiplash that has happened over the last year and a half to two years, we're start to see that really filter into the markets now. A lot of times what will happen here is limited partners pressure their VCs, their private equity companies, who pressure their, their boards, who pressure the CEO pressures everyone else. That's how it works. Pressure gets pushed down. It's how business operates. So what we're seeing now is the markets are requesting that companies be profitable but also grow. You've seen in Facebook and Netflix quarterly earnings report last week. So you see they're trading at all highs. Facebook took an about face on the metaverse. They red cost and now they're pushing the algorithm to increase revenue and ad spend. And it's super smart what they're doing on Instagram and Reels, we're seeing it. Professor Galloway, the podcast talked about it. The idea is that they are pushing revenue and reducing costs, creating profits, which again why the markets are asking for that. And they're getting rewarded. Same thing with Netflix. I will say Netflix got, got a big present when the strike happened. So Netflix has global talent. They can produce TV shows in other countries where there was no strike. More afford affordable talent, more affordable productions. They too also have a serious algorithm that allows you to watch or push things that you, it thinks you're going to be interested in. In some cases they take bets on older shows. Suits, for instance, was their most streamed in the quarter. I never watched Suits before. I actually watched it. I absolutely, I loved it. I thought it was, it was really. Mike Ross, really just great, great characters. So what does this mean for everyone else? Well, this is why I'm thinking it's the year of automation. In 2020, companies are going to mandate that we grow, but also maintain costs or reduce cost in some cases. And so how do you do that when people are the most expensive thing on your financial statements? We talked about this before. They're not assets, they are expense. Hopefully that'll change at some point with gap rules, but until then, still an expense. So how do you do that? I think you do it through automation where you need to do more, you need to grow. And we're starting to see historically that if you cut costs, revenues would decline. We're not seeing that anymore. We're seeing companies like Netflix and Facebook be able to reduce costs but also grow at the same time. That expectation is now going to be set for most companies. So how do we do it? As HR folks, we think about automation. Automation is going to grow. The automation market is going to go from $191 billion to 3 to $400 billion. So 3 times 3x the, the, the growth there. McKinsey has done studies on this and surveys that show that a lot of companies are thinking about it. In fact, workers see the opportunity of enhance their productivity. And then of course with the proliferation of AI, what I'm excited for, hopefully the rumor has been on November 6, OpenAI is going to introduce the world to autonomous agents that will unlock so much of automation. And automation has been around for so many ages through, you know, the early centuries with water wheels, the 1920s and 1950s with factories and electrification, and then in 1961 when the first industrial robot was created. So we've seen this and now we're going through a another phase of automation with AI. There are pros and cons, of course. Efficiency, cost reduction and the ability to scale like we talked about. So can you grow but also maintain costs? There are some cons, of course. You have to take an investment in these solutions. Suzy. We work with something called Workato. I'm actually reading a book by the CEO of Workato. So it takes an investment, it takes time and investment in a tool to do that. And some of these tools are very difficult to use. I advise a company, full disclosure, called Dado. They are trying to create a frictionless automation for, for onboarding for many different things within your organization. So plug to Dado, check them out. Really cool, super easy. And you can spin up automation within, you know, hours as opposed to days or weeks. Displacement of workers. I think it's more displacement of tasks. That's an opportunity for companies to reduce costs, but it's also going to impact the economy. And then we become dependent on technology. So if the workflow isn't working, we're all like, what WTF? So when you're thinking of 2024, what I'd ask you to do is go back one of my blog posts, which was the task analysis, and go through the tasks within your organization for every position that you have and say, can that task be automated? You will find out that a lot of things that your folks are doing can be automated. Now, does that mean they will lose their jobs? Of course not. It'll mean that you'll be able to do more with less. Move them from more of a tactical focus to more of a strategic focus. So I'd love your thoughts on this. 2024, the year of automation. You heard it here first. Thanks for listening. We'll see you next time.
