Evidence From ConnectWise That Everyone in Startup Land Is All-In On AI
Early applicants to this year’s PitchIT contest for ConnectWise-compatible startups include a lot of sometimes vaguely self-described AI vendors.
It’s impossible to say, unless you work at ConnectWise anyway, whether any of the contestants in this year’s PitchIT startup competition will be AI governance vendors. That close to all of them will be AI something, on the other hand, is a much easier call.
“Everybody’s using AI in their description,” says Sean Lardo, the vendor’s vice president of IT Nation Communities. “You’re either built on AI and you’re an AI offering or you’re infusing with AI to maybe improve your product.” Some of the applications are even vaguer than that to a degree Lardo finds dangerous for the companies that submitted them.
“People are very nervous these days about AI,” Lardo says. “You have to be thorough on what problem you’re solving for.”
PitchIT, for those new to it, is a contest ConnectWise has been staging annually since 2018 to nurture young makers of ConnectWise-compatible software. Lardo, who turned it into a startup accelerator as well two years ago, reports record interest in joining this year’s cohort, which he expects to include 25-ish companies. Indeed, he had already received over 50 applications (via this page) when we spoke two weeks ago on the sidelines of GTIA’s annual Community & Councils Forum in Chicago.
“People I’ve never even heard of,” says Lardo, who expects to receive more than 150 submissions in all by the April 30th deadline. “We’ve averaged about a 25% increase in applications year over year,” he adds.
I’m guessing this year’s uptick will be even bigger given how rapidly AI-native startups focused on MSPs, some of which you’ve read about here before, are coming into existence at present.
“The barrier to entry has gone down significantly because a lot of them are just using AI to build the code,” Lardo observes.
Plus, there’s a lot of investment capital to draw on. “AI-tagged companies account for as much as 69% of VC-backed SaaS companies within select segments,” according to a recently published report from PitchBook, amid a spike in venture deal volume.
Lardo and his team are evaluating would-be PitchIT competitors much the same way venture funds evaluate would-be funding recipients.
“If you’re an investor, you’re looking at are they strong enough to survive?” Lardo explains. Meaning do they have not just an interesting, shipping product but customers for it too, and maybe even upbeat buzz among MSPs.
“We’re literally looking on LinkedIn, Facebook, X, Reddit,” he says. “We want to see what’s being said.”
Lardo won’t disclose much about the applicants ConnectWise has heard from so far except to note that at least six of them make AI-powered service desk automation software of the kind 2023 PitchIT winner Thread makes, and that others are seeking to streamline additional operational processes.
“Right now, there seems to be a huge push on AI sales-driven stuff, especially with data cleaning and opportunity management,” he notes.
This year’s contestants will be vying for $150,000 in prizes, up from $100,000 before. Unlike previous years though, in which all of the money was distributed in cash, this year’s pool includes $50,000 of cash and $100,000 of sponsorship credit at ConnectWise events.
“What we were finding is we’d cut the winners their check for the prize money and then they’d turn around and just give it right back to us for sponsorship,” Lardo explains. The new arrangement eliminates that round trip.
ConnectWise will name this year’s contestants early in May, and name three finalists some four months later. The winner will be chosen by a panel of judges in front of a live audience at the vendor’s IT Nation Connect event in November. I’ll be watching in the front row, as I have the last two years running.