TRANSCRIPTION 🔗
DM001 how ai is commoditising cybersecurity businesses: Right now, somewhere out there, a buyer has your proposal open on their screen, and sitting right next to it are two of your competitors' proposals. And here's what they're doing with all three of them. They're passing them straight into ChatGPT or some other AI tool, and they're going, right, compare these and tell me which one we should go with. Your proposal has the same kind of credentials as the other two, the same promises, and that line about how you use AI now. All three of you have it. So the model reads three proposals that basically say the same thing. And it does the only thing that it can do. It compares the bit that's easy to compare. The price. And that's what AI has done to your cybersecurity business. And the part that you should worry you is. Is that you'll never see it happen. So let me show you what's actually going on here and why the commercial pressure you're probably already feeling is about to get a lot heavier and what you can do to alleviate it. Firstly, here's an honest picture: the work that used to be priced at a premium because it required your scarce expertise, as you now know, AI is making a version of it available to everyone faster and cheaper. And I'm not talking about AI replacing the quality of your thinking. That can never happen. I am talking about What happens to your pricing power when a buyer can't tell the difference between your work and an AI version of it? And buyers can't. More and more, they genuinely can't. And think about it like this: like when ChatGPT showed up first, the first people who really felt it commercially weren't in tech, they weren't cyber people, they were writers. And we can actually measure what happened to them because researchers at Washington University and NYU. Tracked about 92,000 freelance writers and upwork. And in the months after ChatGPT launched, writing jobs dropped, as in the number available dropped, and earnings fell by around 5%. And the really surprising thing about that is the writers who got hit hardest were actually the best ones. The top-rated, the highest earning, the most proven people, but because being brilliant didn't protect them. Because people There had already decided that competent writing was now something you could get done for almost nothing using AI. And as a result, the entire market reclassified their work, not their quality, but their category. And that reclassification is happening right now to cybersecurity. So let's talk about what that actually looks like in your pipeline right now. The first thing you're gonna notice is that conversations that used to feel easy to close start getting more. Questions. Buyers want to understand why you cost more. They're comparing you to companies you've never heard of, and some of them are comparing you to AI tools. And the proposals that you used to win comfortably are now going to a second round of interviews, maybe with a board or a CFO that you didn't expect. That's the pricing pressure. And underneath it, Is a buyer behavior shift that most founders are missing entirely. Buyers have changed how they evaluate you. They used to rely only on a recommendation or a conversation or a good feel for, who seemed the most credible. But now they're doing background research with AI before they ever get in a call with you in the first place. They're feeding maybe your website copy, your LinkedIn profile, your proposal into that AI chat. And asking it to summarize what you do and how you compare to the others on their screen. And when your positioning looks like everyone else's, the AI's summary of you looks like everyone else's summary. Forrester research from this year found that around 55% of B2B buyers are now using AI specifically to compare vendors. That's not a future trend, that's your pipeline right now. Frickin' now. So the buyer hasn't changed their standards, they've changed their tools and their behaviors, and their tools are very good at spotting sameness. Now I was having a conversation with a cyber founder a few weeks back who said something that I keep thinking about AI is changing cybersecurity significantly. Am I going to be relevant in 12 months? Oof, what a big question. And I hear a version of that almost every week in multiple industries. And here's what I've come to understand about that. Fear. It's actually pointing at the wrong thing because when we dig deep into it, the relevance question is usually a positioning problem. The founder is still completely relevant. The work is excellent. Your work is excellent. What's changed is that sameness has caught up. And here's the move most founders make when they feel this in these high tech times is that they try to out tech the problem. Or they think they need to add another certification or update their website to include that they're now AI powered. Or they pivot toward whatever people seem to be asking for this quarter. And all of that makes the sameness worse because every company in your sector is making that same pivot at the same time. So the thing that you added to standout, probably you paid a lot of money for, is now the thing that everyone has, and you're back in the crowd. Haven't just paid more for it. Hmm. The erosion, this erosion, it's commercial, but it shows up first as positioning failure. Buyers can't see why you specifically. And when they can't see it, their AI certainly can't find it. And so the deal is gonna go quiet. Or the proposal is gonna go to a second round, or the deal is gonna close at a rate you'd have said no to two years ago because you'd have already moved on and found other clients to work with. So here's where most of the advice I think that's out there right now is wrong. The advice you'll read is gonna say move up the value chain, offer AI governance, offer risk strategy, offer board level consulting and all that BS. Get out of the commodity work and work into the premium work. And that
Load full transcript
advice isn't wrong. But watch what happens when an entire market gets the same advice. Every cyber firm starts pivoting to AI governance. Every proposal suddenly mentions board level risk strategy. Every homepage gets an update. And within about 18 months, AI governance will be a new commodity. Because when everyone is zigging, the zig becomes the crowd. Now, 40 years ago, Al Reese and Jack Trout wrote, You win. By owning a position in the buyer's mind that nobody else can claim. A position so specific that when the right buyer shows up, there's only one obvious company to call. And the idea, this idea, it's older than the internet. And it's never been more important than right now because the buyer's AI is doing something very specific when it reads your proposal. It's looking for a signal, something to say about you that it can't say about everyone else, a reason to distinguish you. If your positioning gives it nothing to work with, it's going to default back to price. And if the buyer follows, there's actually a name for why this is happening in human decision making. Psychologists call it cognitive ease. When options look similar, the brain defaults to the simplest available comparison, and the simplest available comparison is the number at the bottom of the page. The AI runs the same logic, just faster and without giving a shit who gets the deal. So the question you need to answer is: what does your positioning give the buyer's AI to say about you? And maybe you're wondering, well, how do I know what I've got is a real position or just a polished version of what everybody else is saying? I use this one test with every founder that I work with. I call it the copy test. It's one question. Could a competitor Copy it today. Run it across everything that you claim makes you different. Your tools, are they copyable? Any firm or company with a budget in an afternoon can add the same stack because they can code it with AI and use GitHub or Lovable or something else to get it out there live. Your process, the way that you run your client engagements, your methodology, mostly copyable. Takes a bit longer, but AI is closing that gap fast. What took a year to build a few years ago can be reverse engineer in days now. So Coca-Cola can become Pepsi, right? And your position, the specific buyer that you serve, the specific problem that you're known for solving, the outcome you've become the obvious choice for. That's the thing that can't be copied as quickly. Because a position, it's not a product feature. It's a decision about who you're for. Plus a reputation you've earned in one particular space. And nobody can buy that off a shelf, try as they might. So whatever survives that test, whatever a competitor genuinely can beg, borrow, or steal, no matter how hard they try, that's the thing worth building everything around. And the reason it works against AI commoditization specifically is this. When your positioning is specific enough, the buyer's AI has something to say back to the buyer about you. It can tell the buyer why you, not just That you're also a cybersecurity consultancy with great credentials. The specificity does the work the AI needs to do its job when you want its job to be choosing you. Let me show you what this looks like in practice. Imagine two cybersecurity firms: same size, same experience, equally good at delivering work to a high standard. The first is gonna describe itself as a cybersecurity consultancy that helps businesses stay protected across their digital infrastructure. And the second describes itself as the firm that helps private equity-backed businesses identify and resolve the security issues that kill acquisition deals. Now imagine a buyer feeds both of those into their AI and asks it to compare. The first company is gonna get sorted into a category with a hundred others. The AI has nothing specific to say about them, so it describes them in the same language it'd use to describe any competent company in the space. Whereas the second firm is different. The buyer who's just had an acquisition slow down because of some security red flag is gonna read that and think, that's exactly what happened to us. That's the company we need. So one firm is on the spreadsheet being sorted by price. The other one doesn't even nearly make it to the spreadsheet because there's zero comparison. It's so specific to the problem that they want solved, and they're so specialized in it that that's why there is zero comparison. And this is what I mean when I say specificity is the mechanism. Broad positioning produces broad results. Specifically Positioning produces recognition, and recognition is what drives the kind of commercial outcome that isn't a race to the bottom in terms of price, even when AI is in play. So here's the move most founders make instead. And I say this with no judgment because I see it constantly in all sectors. When people feel the pressure and proposals aren't closing at the same speed that they used to, the lower day rate that probably felt right a couple of years ago suddenly gets moved back. Or get switched back on. And the instinct is to respond as well by discounting your current pricing or that pricing, worse again, and adding even more services to try and increase the value and decrease the cost. Then people are going and they're getting these extra credentials. So you end up with a broader offer. So there's something for everyone. And it feels like it makes commercial sense in that moment. You're trying to reduce the risk of losing a deal by covering more ground. But watch what it does to your positioning. Every new service you add makes you harder to describe, every expansion of scope makes you easier to compare to a bigger list of competitors. And every new credential is one more thing that sounds like it could appear on any company's website. And every time you lower or discount your price, you are literally in that race to the bottom. You're gonna get busier, more interchangeable, and work harder for less. It should be the other way around. The founders who break out of it and go in the opposite direction, they get specific about one thing. They pick who is their ideal buyer. They pick the problem and the outcome that they want to be known for, and they say that clearly, absolutely frickin' everywhere. So that when the right buyer shows up, the AI has something to say about them and the human has something to remember. And the question of why you isn't even a question anymore. So two common pitballs that I watch people fall into around this: one is competing on speed and price. You will lose. The only way to win that race is to care less about the work. Than the person you're raising and you don't, you you care. So don't run that race. And two is following the herds pivot and calling it differentiation. If the whole market is moving to AI governance this year and you move with it, you've zigged with everyone else, run it through the copy test. Could a competitor copy your AI governance offer by next week? And if it's a yes, it doesn't count. If you're watching this and you genuinely can't tell whether your positioning gives a buyer's AI something specific to say about you, that's worth knowing for certain. I built a strategic positioning tool for exactly this. It takes about 10 minutes, it's free. The link's in the description and it gives you a 90 day action plan. For how to lean into your differentiator. So go and find out how you can better stand out. It's called find your zag. So when everybody else is zigging, you're zagging. So here's what I want you to take away. Your expertise is still worth a fortune. What changed is that sameness now buries it. And AI has turned that from a slow problem into a fast one. If a buyer can swap you out for someone or something else, sooner or later they will swap you out for someone or something cheaper. And that's the risk in one sentence right there. And the way through it is a position specific enough that swapping you out stops being something a buyer or their AI would even think is up for consideration. So when you get that right, your whole picture changes completely. Buyers are going to arrive already half-sold because they came looking for exactly what you do. Your pipeline is going to stop depending on who referred you last month, and you get the thing that you've actually wanted this whole time. Revenue that you can plan around, buyers who trust you before the first conversation. A business that keeps running when you step back from it. So think back to that buyer at the start, the one with three proposals open and paste them into Chat GPT. You can't stop them doing that. That's just how buying works now. What you can decide is whether the AI has something unique to say about you or whether it files you in with everybody else and sorts you by price. So go and find your ZAG and then own it like nobody else can.