a16z Podcast

Steijn Pelle & Frédéric Renken on doing the job before you automate it

Steijn Pelle and Frédéric Renken· Co-founders of Lassie at Lassie
·~59 min·English·a16z
AgentsAI CompanyBusiness Strategy
TL;DR

The founders of Lassie explain how they built AI agents that autonomously run dental back-offices — by first doing the paperwork by hand, engineering for full autonomy over years, and reaching the Main Street businesses whose only 'incumbent' was a human who quit.

01The Method

Do the job before you automate it

Lassie's founders learned each back-office job by doing it by hand first, then automated their own work away.

Initially we were actually the humans in the loop. We kind of automated away our own problems.

Frédéric Renken, a16z Podcast
Key Insight
The moat here isn't the model — it's the tacit domain knowledge they absorbed by being the humans in the loop. A competitor who starts from a model API can't shortcut the months spent behind the front desk.

02Core Thesis

Software finally does the labor, not just store it

For decades software only moved the filing cabinet into a database while people still did the work; now it can do the work itself.

So it just turns out that the work is orders of magnitude bigger than the storage of information that the work is done on.

Alex Rampell, a16z
Key Insight
This quietly redefines the market. The addressable spend isn't the software budget — it's the labor budget, which is why Lassie can charge five figures against a practice's $200k-a-year admin line instead of pricing like a SaaS tool.

03The Market

It's a labor shortage, not a job takeover

In these small businesses the work goes undone because owners can't hire anyone — so agents fill a gap rather than displacing a worker.

It's not like, oh, AI is going to take the jobs. In many cases, you can't find somebody.

Alex Rampell, a16z
Key Insight
The optimistic framing doubles as a defensibility argument: when you're filling a shortage instead of firing people, adoption resistance collapses and the ceiling on growth is demand, not headcount.

04Why Now

The real bottleneck was paper, not the model

Even capable models couldn't run these offices because most payments still arrive on paper — a federal mandate to go digital is what opened the door.

even if you have the models or had the models 5 years ago like yeah the payments are still on paper and we are digitizing that in the meantime

Steijn Pelle, a16z Podcast
Key Insight
The trigger for this market wasn't a model release — it was regulation forcing paper onto rails. Whoever does the unglamorous work of converting the file cabinet to digital owns the substrate every future agent has to run on.

05The Hard Part

No human in the loop is the whole product

Because Lassie runs the practice instead of handing over a tool, it can't keep a human reviewer — so it had to be built to err on the side of correctness.

you all of a sudden need to build autonomous systems that run on its own and don't have a human in the loop. It runs the business for Dr. Sloop, which makes it technically super interesting.

Steijn Pelle, a16z Podcast
Key Insight
Autonomy is a product decision that compounds into a moat: with no human reviewer to hide behind, the correctness bar forced years of work a 'tool' company never has to pay for — and that work is hard to copy.

06The Frontier Gap

The models still don't know how to do the work

Frontier models carry language and reasoning but not the office workflows, which live in staffers' heads rather than on the internet.

The models are trained on so much data and they're so large and yet they actually don't really know how to do any of this work.

Frédéric Renken, a16z Podcast
Key Insight
Scale bought the models language and reasoning, but not procedure. The last mile of automation is capturing tacit, off-internet know-how — exactly the proprietary data a company already embedded in the workflow can mine and no one else has.

07Defensibility

The incumbent was Betty, and she quit

These categories never had a software incumbent to out-race — the only competitor was the human labor that walked out the door.

Well, the incumbent was named Betty and she quit two weeks ago. That's the incumbent.

Alex Rampell, a16z
Key Insight
The competitive question flips. It's no longer 'will the incumbent copy me?' but 'can I reach the customer at all?' — so the risk moves off the product and onto distribution, which is where the next section lives.

08Distribution

Overhyped in the Valley, underhyped in Iowa

The hard part isn't skepticism — the customers are hundreds of thousands of busy, non-technical owners scattered across the country, not a handful of enterprises.

we literally need to go find like thousands, tens of thousands, hundreds of thousands of small businesses.

Steijn Pelle, a16z Podcast
Key Insight
The bottleneck isn't convincing owners — it's finding them. They were never anyone's software customer, so they're missing from the databases enterprise sellers rely on; the winner is whoever builds a brand-new channel to a market that used to be invisible.