"Trojan Horse" AI Business Models

A hack to build the next big AI company

In the fast-paced world of AI, staying ahead is tough. We see new models and companies emerging every day, making it harder to maintain a lasting advantage. But there’s one strategy I’ve seen gaining traction lately that I think is underutilized—and it’s incredibly effective: the Trojan Horse business model. I presented a longer version of this at this year’s PakCon.

Here’s how it works.

The Challenge: Staying Ahead in AI

When you’re building an AI company, there’s a ton of hype around data and open-source AI. Some of the traditional advantages still apply—having a great dataset gives you a head start, and proprietary AI models can offer a temporary edge. But the reality is, open source is democratizing the space fast, and your edge today can disappear overnight when someone else comes along with a bigger budget or better AI. The “data is the new oil” mentality? That’s from 10 years ago, and it’s lost its shine.

The Trojan Horse Strategy: Start Small, Disrupt Big

Here’s the real opportunity: instead of trying to build something massive from day one, like a new ERP, EHR, or CRM system, use the Trojan Horse strategy. Build an AI-powered productivity tool that solves a specific problem for companies. Think of something that integrates with the systems they already use—optimize their workflows, streamline processes, or make their data work smarter for them.

Now, here’s where it gets interesting: as your tool becomes more ingrained in their day-to-day operations, it starts to collect data, add value, and ultimately become indispensable. From there, you can expand its capabilities, make it the go-to interface for their systems, and over time, you’re positioned to replace the legacy system entirely.

Case Study: Ficus Health

One of the best examples of the Trojan Horse strategy in action is Ficus Health, a startup in the healthcare space. They realized that up to 40% of doctors’ time is wasted on documentation—time that could be spent treating patients. Rather than trying to disrupt the entire Electronic Health Record (EHR) system overnight, Ficus Health built an AI tool that listens in on doctor-patient conversations, automatically generating medical reports and sending them to patients if desired.

This simple but powerful tool solves an immediate pain point—documentation. By integrating seamlessly with existing systems like the EHR and Radiology databases, Ficus Health became an essential part of a hospital’s workflow. Over time, they’ve expanded into new areas, like diagnostics, treatment recommendations, and even clinical trial recruitment, making their tool even more valuable.

Here’s the real kicker: as Ficus Health collects more data and integrates deeper into these hospital systems, they are now in a position to eventually replace the legacy EHR systems that have dominated the industry for years. It’s the perfect example of how you can start small, solve a real problem, and ultimately grow into something much bigger.

Why It Works

Some of the most valuable companies today, like SAP, Salesforce, and Epic, didn’t get there overnight. They built systems-of-records that are now irreplaceable. All company data flows through them, and every business interaction relies on these systems. It’s hard to sell a brand-new ERP system to a company that’s been using the same one for 10 years—but a productivity tool that sits on top of the system and makes life easier? That’s a much easier sell.

This strategy allows you to start small, build trust, and gradually expand until your AI solution is the core of their operations.

The Big Opportunity

For many industries, the Trojan Horse strategy is a huge untapped opportunity. And let me tell you—this isn’t a secret. Companies like SAP and Salesforce are already investing heavily in AI because they see the writing on the wall. They know there’s a risk that startups using this approach will eventually disrupt them.

So, whether you’re a founder or an investor, think about this: the real value in AI isn’t just in building bigger models or having more data. It’s about embedding AI in ways that solve real business problems and scaling from there.

There’s no better time to build. And if you’re thinking about launching a venture using this strategy, reach out. I’d love to hear what you’re working on.