Most mid-market companies are successful despite their data not because of it.
I connected with a lot of PE service providers and advisory services this week and they're all telling the same stories. Mid-market companies with poor data infrastructure are the rule, not the exception. Huge opportunity for upside and competitive advantage if you can get it right. Maybe you can quantify culture?
I hosted Jacob Crockett from HireAligned on the PE Data Guy Podcast. His software uses AI models to quantify the existing culture at a company and understand what makes employees successful. Using those models you can then assess potential new hires for cultural fit. Jacob and his team are seeing huge increases in retention within one year. For big teams roles with high turnover like SDR this can be worth millions in savings annually. Click the pic to check out the full episode:
Claude code is a beast, Clawdbot/Moltbot/Openclaw is Pandora's box
During last week's workshop in FL I got Claude Code up and running in my local environment. It's incredible for anything from building interactive web pages to even whole applications from a single prompt (I built myself a fully functional personal CRM in less than an hour). Mid-market portcos stand to benefit tremendously from the automation opportunities (including AI) that this unlocks. It's critical - of course - to have your data well organized and set up to enable this. Let me know if I can help!
You may have read about Clawdcode AI agents causing a stir by starting their own social media platform. As usual, coverage is over-hyped on both ends of the spectrum: half saying it's the eighth wonder of the world and the other half saying it's a security disaster.
Having installed this myself too, I can say the truth is somewhere in the middle for now. The security risks are very real and this should be nowhere near your main machine or your corporate network. However with the standalone setup on a virtual private server with limited read access to the internet, I've been able to create a bot which has removed the need I was pursuing to hire a virtual assistant. It's nowhere near being enterprise-ready yet and nor was it designed with that in mind. However it's a very clear signpost to the future and the way things are heading. Likely quicker than we can imagine.
What it boils down to - Anthropic is betting users will pay for an ad-free thinking space. OpenAI is betting free access (subsidized by ads) creates more value for more people. Both have merit. Let's see how it plays out. PE Failures from 2025
A wave of high profile bankruptcies shows how a reliance on heavy debt, cost cutting, and short term value extraction is driving higher failure rates while harming workers, communities, and long term investors.
You have been pitched AI six times this quarter. Your operating partner is asking about it. Your board wants an AI roadmap. Three vendors have shown you demos that look incredible.
Here is what none of them told you. Their product needs your data to work. And your data is not ready.
This is the AI readiness trap. Companies invest in AI tools, platforms, and consultants before fixing the data those tools depend on. The result is expensive pilots that stall, dashboards that nobody trusts, and a growing sense that AI “doesn’t work for us.” Thanks to all my new AI agents, I was able to quickly build this interactive quiz web page for you to find out much more about the AI Readiness Trap and take an interactive assessment to see where your company stands today. Check it out!
FINAL SEND OFF
I hope you enjoyed the new format. Please let me have any feedback - I read all replies. Then, send this edition along to your favorite private equity friend!
CRAWFORD McMILLAN ™ Professional Data Consultancy of 25+ years
The content provided in this newsletter, including discussions regarding data architecture, operational efficiency, valuation readiness, and business strategy, is intended strictly for informational and educational purposes only. Decisions regarding capital allocation, investments, acquisitions, or business strategy should always be made in consultation with qualified professional financial, legal, and investment advisors.
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