# The Aerodynamics Doctrine - Michael Davidson (Arkbridge.co)

**Source:** https://docs.google.com/document/d/1mwXAKEMJllacvKM6OAUpFiNBcxKwBAX-odIKctEUycc
**Date:** March 2026
**Shared by Rob:** 2026-03-13

## Summary
Expanded thesis on the structural collapse of the agency model, the per-seat SaaS model, and the emergence of "encoded skills" as the atomic unit of business capability. Sequel to his October 2025 "Infrastructure Operator Doctrine" (97 pages).

## Core Arguments

### The Hollow Engine
- Agencies produce value only while running. Nothing accumulates. Every dollar of revenue requires a dollar of labor.
- The founder is the load-bearing wall. Success = more clients = more labor = more management = more fragility.
- This isn't just agencies -- it's ANY business where value-producing work is performed by humans doing repeatable cognitive work.

### The Aerodynamics Principle
- Every business is a vehicle. How much of what it carries is moving it forward vs drag?
- Before AI, every human was "load-bearing" by default because there was no alternative.
- Now you can actually ask: if I replaced this function with a system, would the business still work?
- If yes, that function isn't load-bearing. It's mass. Mass becomes drag.
- The businesses that survive strip down to what's structurally necessary and let systems handle the rest.

### First Real Replacement for Cognitive Labor
- Every previous automation wave replaced physical tasks (factory machines, ATMs, self-checkout).
- Outsourcing wasn't replacement -- it was relocating the same human labor to cheaper geography.
- AI agents are the first time cognitive work itself (reading, deciding, writing, analysing) can be performed by a non-human system. "This is the line that doesn't un-cross."

### Scale Economics
- **Small scale (1-10 people):** Near-total replacement. $75-150/month AI stack replaces team of 10. The math is so lopsided it barely needs arguing.
- **Mid scale (50-500):** Teams shrink but output doesn't. Customer success 12 → 4. Marketing 8 → 3. Humans handle edge cases and relationships, systems handle the routine 70%.
- **Enterprise (1000+):** Costs can approach human costs when you add governance, security, compliance, integration, monitoring. Value is speed and consistency, not raw savings.

### The Liability Gap
- AI can't be held responsible. Only the controller (person/company deploying it) can.
- No legal personhood for agents. Liability flows entirely to whoever pointed the system at the problem.
- EU AI Act (August 2026) and Product Liability Directive (December 2026) are first drafts, not solutions.
- This will be a defining issue for the next 2-3 years.

### SaaS Collapse
- $300 billion wiped from application software stocks in 5 days (Jan 30 - Feb 4, 2026).
- Per-seat SaaS model under attack from both corporate AI (Anthropic shipping 11 vertical plugins) and open-source (OpenClaw hitting 247K GitHub stars).
- SaaS stopped being a product category and became a component layer.

## Key Data Points
- OpenClaw: 247K stars, 47.7K forks by early March 2026
- Felix/Claw Mart: AI agent generating ~$80K revenue on $200/month Claude Pro Max subscription
- Anthropic launched 11 open-source business plugins (legal, sales, finance, marketing, support, PM) on Jan 30
- ~30 clients transformed from labor-dependent to system-dependent by Davidson over 3 years

## Relevance to Tilt
- Rob is already building the solution Davidson describes: one founder + AI agents doing work of 6-8 people
- Tilt is transitioning from hollow engine (sell hours) to infrastructure operator (build products that compound: Tradeify, Retail Targeting)
- The "encoded skills" concept maps directly to what we're doing with OpenClaw agent skills
- The liability gap section is relevant for client contracts as we scale AI-powered services
- Davidson's framing is useful for Tilt's pitch: "We don't sell hours. We've encoded our expertise into systems."
