Why Native AI Is Better Than AI Add-ons And How To Make The Most Of It

Jeffro (00:01.697)
Welcome back to Digital Dominance. AI continues to transform pretty much every industry. But what does that really mean for service-based businesses? How can you productize your offering or scale intelligently and stay competitive in an AI-driven world? Today, I’m joined by Mohan Rao, Chief Product and Technology Officer of KnownWell, an AI native SaaS platform built specifically for service firms. He has over three decades of experience leading SaaS innovation, business strategy, and product development and he’s helped companies scale, navigate acquisitions, and leverage AI for real business impact. So in this episode, we’re going to be diving into the difference between AI native and traditional SaaS, how businesses can shape their strategy in this era of AI, and why productizing your services with AI is one of the keys to sustainable growth. So welcome to the show, Mohan.

Mohan Rao (00:51.843)
Hey, Jeff, thanks for having me on.

Jeffro (00:54.581)
Yeah, I’m excited because I mean, we talk about AI a lot, but there’s so many different facets of it and ways that it can be applied. AI is being integrated into nearly every software tool there is today, but not all AI powered products are truly AI native. So I think we should start by breaking that down a little bit. So when we say there’s a lot of SaaS companies out there, they’re adding AI to their existing platforms, but your team is building an AI native product from the ground up. So can you tell us what is the difference and why does it matter?

Mohan Rao (01:18.403)
Yeah.

Mohan Rao (01:25.422)
Yeah, there’s a new category of products. It’s AI native. So if you had an existing SaaS platform, software as a service platform, and then you’re infusing it with AI capabilities, that’s good because you already have some of the data that you need. And you can create a more compelling product. But an AI native product, Jephro, is a product that’s been imagined right from the ground up as an AI product where data and algorithms and the model and the prediction power is right in the core capability of the product, right? And everything is built around it. It’s just the inverse. You start with features at AI versus you’re a prediction machine and now let’s think about the features, right? It just inverts it.

Jeffro (02:13.716)
Yeah, that makes sense. So let’s talk then about using these tools. If you’re a service-based business and you want to scale, AI does open up a lot of opportunities, but what should people be focusing on first?

Mohan Rao (02:28.834)
Yeah, you know, as with everything, you’ve got to have a vision of how you’re going to use AI, which starts with knowing your business really well and understanding what the pain points of your customers are, your clients are, and what the pain points internally are. And just understanding the pain points and the opportunities opens up the doors. And then you can start saying, where do I apply AI? Do I apply it for this type of use case or the other type of use case? and we can go more into it, but just understanding why you want to use AI, in what sorts of use cases, that is everything.

Jeffro (03:07.808)
Yeah, that makes sense. So then let’s talk about specifically productizing services. I think a lot of people really struggle with that because they’re like, well, it’s different every time. How can I do that? So how could someone use AI to help take that expertise that they have and turn it into a scalable solution?

Mohan Rao (03:19.16)
Mm-hmm.

Mohan Rao (03:27.278)
Yeah, you know, roughly you can think of AI helping in two different dimensions, right? So there are many, many, many ways to cut it. And we can think of all the ways you can cut it during our conversation here. But one way to cut it is you can take the people that you have in your company that are doing the work and making them both more effective and efficient. So already I introduced effectiveness and efficiency as two separate things, right? So but essentially give a pedestal for every one of your colleagues to stand on so they’re a little taller. So that is one way to use it. So you’re sort of providing them better tools, if you will. That’s automatically going to make them more effective and efficient. You can also use it in another way, which is you can have AI do some of the jobs that a human currently does. So usually, that needs to be around data heavy, repeatable, those sorts of use cases that you’re starting to look for some characteristics where you can offload some of the work traditionally done by one of your colleagues to an AI bot. So you can do it one of two ways. Either you can make the person, the human, more efficient, or you can just kind of take some of the workloads and just put it on the AI bot to take care of it for you.

Jeffro (04:47.66)
And obviously there’s so many different types of AI. So even knowing what’s out there and available can be hard to keep up with all the different options. So how do you figure out which options to go with? What’s going to be the best one? What’s going to be the most affordable? What’s going to be the best as we grow? Where do you even start?

Mohan Rao (05:07.436)
Yeah. Yeah. So you know, you’ve got to have a model for, Jeffro about, re-imagining your own business, right? With AI. What would, what would, you can just ask some questions such as, what would you do if all of your people are 30 % more efficient, 30 % more effective? What sort of business are you building if that were to happen? Right? So what if the products and services that you’re offering are 30 %

more effective and efficient. So just start getting your mind wandering into that you can do more. And what does that mean in that world where you can do more? So the way I think of it is, thinking of it as really there are everyday tasks and there are things that are strategic for you. So everyday tasks could be in how you do your front office. It can be something in your back office, right? So those are everyday things that you need to, as a business owner, deal with it. You can build it yourself, but also you can look for products that are available out there to do it better. It could be something around customer support. It could be something around invoice payments or whatever it is, right? So just kind of getting to a place where… things are more efficient for the people working and lowering the administrative costs and time it takes to do it could be helpful. But really kind of the strategic things are the ones that I generally like to focus on more because the everyday tasks are useful in terms of getting cost opportunities and those things realized. the strategic ones, because they affect your clients, those are the ones to focus a lot on there may be some core capabilities that you do. You are a marketing agency and I can create my graphics in a much different and differentiated way, right? Or it could be some other product that you offer. It could be some R &D that you’re doing, whatever it is, right? So these are the ones that are really strategic opportunities and just kind of making a list of all the opportunities that you can make. That’s where you start.

Mohan Rao (07:26.432)
And then you start looking at tools and solutions out there because, if you start the other way, you just go mad, right? So because all vendors are saying like amazing things about how this is going to transform your business, but that’s not the place to start. The place to start is knowing your own business and figuring out the opportunities where you want to take a bet on this and saying, let me see if I can get this 30 % more efficient.

Jeffro (07:50.676)
Right. OK, well, I like how you talk about a couple of different areas to focus on at a time, like, OK, we’re going to work on customer support. How can we use AI to improve this, or marketing, or fulfillment, or whatever? And we’ve been talking very high level and kind of philosophically about how to approach this. But I think we can get specific. Maybe we can use KnownWell as a use case, and you can walk us through how your platform could actually help a company in a particular area.

Mohan Rao (08:16.481)
Yeah, thanks, Jaffer. You know, one of the things that we noticed, you know, when we were starting known well is services businesses are terrible at scaling, right? You can get it to a level, right? So whatever it is, depending on the field you’re in, could be, you know, $10 million in revenues, whatever it is, and then it stops there. You cannot scale.

The reason you cannot scale is because most services businesses are people-oriented businesses. You need more people to make more revenues. So essentially, it is a form of labor arbitrage. So you’re recruiting somebody at x and billing them out at y. And you’re taking all the risks. These are great businesses, no doubt about it. But it’s hard to scale. So what the core idea of known well is that we can offer commercial intelligence to services business, professional services businesses, so that they can operate their business in a way where they have retention intelligence. So they know when a client is about to churn and they know where the growth opportunities are and being able to mine the data to get growth and retention issues surface well ahead of time. So that they can do something about it. So we call it commercial intelligence. So it’s about client intelligence, delivery intelligence. It’s not so much about what is your service delivery quality, but it is what is the perception of the service delivery quality from your client. So just kind of providing an overall score to show the client health and saying the client health is trending positive or not positive or whatever it is and be able to act on it because this is where the scaling sauce comes from. Otherwise, you get to a point where any human brain can keep 10, 20, 30 clients in your head. after, once you grow beyond that, you need other principles. at that time, you run out of number of principles. So you form an organization. Then you say you have account management, you’ve got delivery management. And then suddenly, it’s no longer the same business that you started.

Jeffro (10:35.854)
So now with known well, it’s able to kind of look at the business, look at the people in the pipeline and kind of figure out, hey, you’ve been ignoring so and so, you should probably follow up with them or this guy hasn’t responded to any of your emails. Maybe he needs to be brought back into the fold somehow, give him a discount or check on him, whatever. And that way stuff doesn’t fall apart. Is that accurate?

Mohan Rao (10:57.352)
That is an excellent use case that you just pulled out of how our customers using known well are using this. could be, I’ll give you one more. You’re a marketing agency and the client that has hired you, the CMO there has left. Somebody in the organization knows that the CMO is leaving, but somehow it doesn’t bubble up.

And that is a danger area, right? So because now there could be a new CMO, they bring their own agency. So what you got to do is build up your relationship. If you can get like a month head start about it, it makes all the difference. So just getting this types of intelligence is key in managing great client relationships and this service delivery quality.

Jeffro (11:47.451)
Yeah, and I imagine there’s going to be some changes to your SOPs for your team to make sure that they’re putting that kind of stuff in the notes in the system so that the all-knowing known well can take that information and tell everybody, what we need to focus on right now.

Mohan Rao (12:02.35)
Yeah, that’s right. But in addition, because we’ve noticed that people don’t want to enter notes into Salesforce or HubSpot or whatever it is, there’s always an assistance. So what we do, Jeff Rowe, is we take in all the natural information flows that are coming into our business. For example, the Zoom calls, the emails, the Slack messages. And we’re really getting intelligence out of that. We can also take in human input the notes that you enter. But primarily we’re driven off the natural information flows because these are conversations that are happening all the time in a business. It’s just that they don’t get captured. Right now in today’s world, right? So you have a Zoom call and there’s a transcript two minutes after that. And if that can be ingested and not only the meeting participants, but everybody in the company knows what’s going on that’s summarized properly. And there are signals there that are pulled out for action.

That’s the type of work that we’re doing. It’s really kind of the burden on the human to enter has been minimized so that you can just get information from the natural byproduct of the conversations.

Jeffro (13:13.518)
Yeah, that’s really helpful. So you just kind of hook into the phone system or the Zoom recordings or whatever and pull it all in automatically so people don’t have to think about it. Okay, that makes sense. People are the weak link. We got to get them out of the way.

Mohan Rao (13:27.628)
Yeah, yeah, you know, the this is saying around the speed limit between the computer and the human eyes has stayed at 55 miles per hour. Everything else has gone faster, right? So that’s that’s just the truth. And that’s OK. You got to adapt to where people are.

Jeffro (13:44.43)
Yeah, so obviously we joke about how AI is all knowing and better than us, but it’s still not human, right? It can’t have the relationship. can’t really emulate that yet. So of course we want people and we need people in our companies that are having that relationship with the client. So all you’re doing is kind of plugging it in into strategic points to kind of listen and pay attention and help be that caddy for you.

that says, going into this conversation, make sure you mention this that’s coming up, they’ve got a birthday, or this is the anniversary of their company, or whatever, so that you actually enhance that human connection as opposed to replacing it.

Mohan Rao (14:26.254)
That’s right. mean, one of our core values is sort of to keep the humanity in the relationships, right? And not make it into a bot world. So the way you described is exactly right. I mean, if you can make our human colleagues, all of us, more effective and efficient so that they can be doing more creative work, that’s what matters. Because these are things that are uniquely human, and we want to make sure that that happens while all of the and the finding intelligence and making humans better humans is what we want in a business context.

Jeffro (15:03.974)
So we talked about how AI is constantly changing and it can be overwhelming to keep up. What’s your advice for people who feel like they are playing catch up with all of this?

Mohan Rao (15:17.422)
I think, I think first of all, you know, this seems a little controversial, but let me explain. I think it’s very early in with AI right now. Right. So this is a revolution that’s going to go on. It reminds me a little bit of how things were in the late nineties with e-commerce. Right. So I remember the first time I bought a book and the first time I bought a stock on online, it felt like, Oh my God, this is like a new world. Right. So, so we are in that sort of moment right now, or we have have been in the last year and a half in that moment. So this is a revolution that’s going to go on for the next, depending on your sector, for the next 10 years, 20 years, so on, so forth. So one, you’ve not really kind of fallen behind. If you’re in the knowledge economy, so whether it’s marketing or technology or finance or whatever, the impact will be sooner than the non-knowledge.

economy, like the more physical economy, if you will. So one, always say that, listen, it’s never too late. The second is you should get started urgently, because this is real. Things are happening. If you’re in my field, which is software development, literally a 5 % team can do what we used to do with 15 people a few years ago.

So these effects are real. In marketing, it’s real. In support, it’s real. So just getting on with making a list of your use cases. And the way I think of it is you need to map out the value stream of your company. What that means is you need to have a process view. Because one of the things about organization is if you make one part of it more efficient, the constraints show up in other part of the organization and then ultimately the weakest link is still the weakest link in the whole chain. So you’ve got to really think of it as a process of saying, how do we deliver value to our clients? How do we recruit better? How do we sell better? How do we market better? These are all major value streams. And just starting to get into the most critical value stream for you and starting to experiment and getting some tools or build it yourself, however it is.

Mohan Rao (17:39.019)
But tools are available. Microsoft provides it. Google provides it these days. And starting to experiment is really, important. You don’t want to be left behind. But if you’ve not started, it’s not too late.

Jeffro (17:52.158)
Well, that’s of course good news. I agree. There’s still a long trajectory here. And right now, in 10 years, we’re going to have a lot more helper robots in the home that are driven by AI and not just Roombas. are to be robots that can help with other chores and tasks too. So it is going to be interesting to see how that all plays out. But right now, the focus on business, there are, I agree, so many ways to improve and enhance what we’re currently doing to make things more efficient.

Do you see any mistakes that people make a lot when they’re trying to integrate AI into their business strategy?

Mohan Rao (18:30.158)
Yeah, you know, I see it all the time, right? So when you have a large IT organization, relative to your, you know, it becomes a technology problem, right? So if you start off this as a tech problem to solve.

I don’t think that’s good place to start. You really need to think of this as a business transformation that you want to do, but you’re going to do it in first inning and second inning, and you’re going to go all the way to the ninth inning, right? So you really kind of have to face it out in a way. So one is sort of just the paralysis, right? Like this seems like too big, and therefore I can’t start, right? So that’s one paralysis. It’s a technology problem is another one.

The third thing that you see all the time is vendors are saying different things. And I’m just going to sit out just because there’s too much noise here. And you should not let vendors drive your strategy, your strategy is your strategy, and you need to be on top of it.

Jeffro (19:34.883)
That makes sense. So for those of you listening, obviously, you I agree with this. You got to take the time, do some research, but you can’t just throw up your hands and be like, all right, well, I looked at it, but I’ll do it later. I mean, the best time to start is now, or, you know, the best time to plant a tree was 20 years ago. Second best time is today, because it’s just going to get more complicated with more options and things. So you’re better off by getting in the game now and correcting and improving as you go instead of waiting for the perfect time. So don’t let perfectionism stop you.

Mohan Rao (20:09.025)
Good advice.

Jeffro (20:10.55)
So Mohan, thanks for joining me today. I appreciate that you helped us kind of distinguish at the beginning between AI native products versus AI add-ons. Cause I can see the difference. If you’ve got a native AI application, it’s gonna just, of course the way it works is gonna be fundamentally different. So instead of an afterthought, it’s gonna be at the center of how everything works. So I really liked that. And I think it sounds like you made a cool product that helps people pay attention to all those little things in a business that matter for building those relationships with customers and keeping those things healthy and alive and moving forward. So for those of you listening at home, you can watch a demo of Mohan’s platform by going to knownwell.com slash demo. The link will be in the show notes as well. And I know it’s still in beta. Hopefully by the time this episode goes live, it will be launched. Can you tell us a little bit more about that?

Mohan Rao (21:02.57)
Yeah, you know, we are in beta right now working with select customers so that we can refine the product and iterate it forward. Within the next couple of months, will be, by the time the show comes out, we will be in full version one. So please check us out at knownwell.com. Would love to talk to you.

Jeffro (21:23.842)
Okay, awesome. Well, thanks again for being here today, Mohan. And thanks to all of you guys for listening. If you found this episode helpful, please leave a review on iTunes or Spotify. Don’t be scared of AI, guys. Use it to your advantage. And we’ll see you back here next time. Take care.

Mohan Rao (21:37.176)
Jeffery, thank you so much.