Two weeks ago, I called my locally owned heating and air-conditioning company, which has been servicing my home and the area for more than 30 years. Interestingly, as soon as customer service picked up the phone, I had a sneaking suspicion that this mom-and-pop shop was now owned by a private equity firm and AI was a part of the play. Let me explain …
When I dialed the phone number to schedule my yearly fall start-up of my heating system, the phone was answered IMMEDIATELY. Not even one ring.
Then, the “person” on the line said to me, “Hello Jacob Mintz, is your address still XYZ?” (not XYZ, but you get the point).
I said yes.
Immediately, the person on the other end of the line said, “Jacob, it looks like you are likely calling to set up your fall startup of your heating system. Is that correct?”
I said yes.
“Great, let’s start looking at some dates and times that would work for you.”
And on and on, this clearly AI system whose “voice” sounded PERFECTLY like a human asked all the right questions, and answered all my responses SPECTACULARLY. This wasn’t the bad AI that we have all been accustomed to interacting with the last couple years, delivering bad results and frustrating the heck out of us. This was AI perfection.
[text_ad]
As my call was wrapping up, and my curiosity about what changed at the mom-and-pop-owned company was rising, I asked the AI bot to put me through to customer service, which it did.
A real person picked up, and I asked if the former owners still owned the company.
They did not, I was told; a private equity company had bought the company as well as several other heating and air shops across my state.
This was not terribly surprising to me, as this trend of private equity firms diversifying their portfolios into recession-resilient businesses that have strong recurring revenue has long been speculated in the industry. Essentially, the play is that private equity companies use a “platform” strategy as they acquire a larger company, and then “roll up” smaller businesses and put them on their tech stack/systems.
In fact, according to The Wall Street Journal, private equity investors bought nearly 800 HVAC, plumbing and electrical companies between 2022 and 2024, though this number is likely grossly underestimated as smaller purchases are often not publicly tracked. And taking this a bit further, according to the Axial network, demand for HVAC companies increased by 550% among prospective buyers between 2020 and 2023.
And once private equity firms buy these mom-and-pop shops, likely the first play is to cut costs by implementing high-end AI tools to streamline the operation, and unfortunately, let go of customer service agents.
Stepping back to the AI customer service representative, I was blown away by just how proficient this technology was at setting up my appointment, and my takeaway from this interaction is that we may only be in the first innings of the AI disruption of our modern world.
[author_ad]
