I saw a post last week that stuck with me because it said the quiet part out loud.
The YC kids are coming for SMB B2B services.
Y Combinator (YC) is the top incubator for startups. Graduates include Airbnb, OpenAI (it’s CEO, Sam Altman was the head of YC before founding it), Figma, Reddit, DoorDash, Stripe, Coinbase, and on and on.
YC not only launches billion and trillion dollar companies, it has an important role in signaling to venture capitalists what to fund next. It’s Request for Startups in 2026, featured this area 3rd out of 15 or so topic areas:
AI-Native Service Companies#
AI models are improving really fast, and they're now able to do complex work far beyond engineering.
Historically, services became SaaS software. More recently, they became AI copilots. That's what most startups from 2023 to 2025 built: tools that help people do their jobs.
What we're excited about now is the next step:
AI-native companies that don't sell software—they sell the service. Instead of giving you a tool, they just do the work.
The reason this matters is simple. The total spend on services is many times larger than the spend on software. And a lot of these services are already outsourced, which makes them much easier to replace with an AI-native product.
We're especially interested in areas like:
- Insurance brokerage
- Accounting, tax, and audit
- Compliance
- Healthcare administration
If you're building a company that replaces a service—not just improves it—we'd love to hear from you.
That’s billions in venture capital money coming to eliminate legacy B2B services companies. A year ago, they wanted to sell you tools to work with clients. Now they want your whole business.
The New Competitor Does Not Look Familiar
The old competitor looked like another firm: another broker, consultant, agency, or accountant.
The new competitor may look like two technical founders and a domain expert who picked one ugly workflow.
Kindo & Vic.ai: Focusing on replacing traditional accounts payable and outsourced bookkeeping firms. These platforms autonomously ingest invoices, match them against purchase orders, code them to the correct general ledger, and flag anomalies without human intervention.
Fetch.ai / Lindy (and specialized recruiting agents): A massive wave of startups are deploying autonomous recruiting agents. These agents can look at a job description, scour LinkedIn and GitHub, reach out to candidates with hyper-personalized emails, screen resumes, and conduct initial text-or-voice-based screenings.
Artisan and a host of their AI SDR competitors are looking to replace traditional outbound sales.
OffDeal calls itself an AI-native investment bank for small business owners.
They find a bottleneck, wrap it in software, add agents, and change the economics.
The Bacon Is in the Admin Layer
Most service owners think their moat is the relationship. Sometimes it is.
But AI native startups have advantages.
They can be faster. They can be more consistent. They can turn a painful back-office workflow into a wedge.
They do not have to automate everything. They only have to automate enough of the annoying work to make your operating model look expensive.
This Is How Incumbents Miss the Turn
There is an old lesson from Geoffrey Moore's Crossing the Chasm that applies here. Early competitors look unimpressive to incumbents. Their first version feels thin. The workflow is incomplete. The output needs review.
So the incumbent says the obvious things.
“We are seasoned.
We have relationships and taste.
Our work has nuance and requires judgement.
Clients trust us.”
All of that may be true. That is why this is dangerous.
At first, it will not feel like you are getting replaced. It will feel like a toy attacking the least interesting part of your business. You can move on to the higher margin work.
“They’re just automating the repetitive part no one likes,” you’ll tell yourself.
Then the toy gets better every week. It learns the edge cases, adds integrations, tightens the workflow, builds trust one boring task at a time, and then starts climbing up from the boring repetitive work to all the work.
And if it can do enough of the job at one-tenth the price, the market does not need it to be as good as you at everything.
It only needs to be good enough at the part the customer is tired of paying for.
This Is Why Skills Matter
Don’t let the YC kids erode your business. Do it yourself. That way you capture the benefits, not them.
How? The first steps are a lot simpler than you think. Here’s what I recommend for every business owner:
Get Claude Cowork. Download the desktop app today and fire it up. It’s $20/month so it’s not going to break the bank. I firmly believe that within 1-2 years we will all work out of products like Cowork or OpenAI’s version, Codex. It’s one window that brings all your data and work to the same place. Stop resisting and just download it. Don’t know where to start? Ask Cowork. It can tell you how to use it.
Document your processes as skills. Skills are just written SOPs or instructions that tell Cowork how to do a task. It saves them in a skills file on your computer. Once they are documented, Cowork can run them again for you. You can even tell Cowork to read your email or a document and come up with the skill itself.
Use the Connectors. Next connect Cowork to your data. It has connectors for Microsoft 365, Google Workspace, Hubspot, and on and on. Everyone is connecting their apps to Cowork and if they aren’t you need to find another provider. Worried it’s going to steal your data? Turn off “Improve Claude for Everyone” in the privacy settings and get over yourself. No one cares about your $5m marketing firm and how it does business. Worrying about your data is just an excuse.
Just do those three things and you are on your way. The single most valuable thing a professional services company can do today is to begin capturing its repeatable processes as skills. Now you can share them with others, work to continuously improve them, have Claude do work for you, and get a map of how your entire business work.
The owner has an advantage if they move first. They know the clients, edge cases, judgment calls, and hidden risks.
But that advantage decays if it stays in the owner's head.
Or you can let the YC kids do it to you.