Fortune 500 Powers for Main Street: How AI Is Unlocking the SMB Economy

Can you build a venture-scale business selling $100 subscriptions to pizzerias?

That’s a question that founders building for small businesses (SMB) hear all the time. (The typical answer: no.) It’s usually framed as a unit economics critique: small deals, fragmented customers, messy distribution. And if we assume the market is limited to “pizzerias that already buy software,” the skepticism makes sense.

Today, that objection no longer holds. It misses something bigger: what economists call Jevon’s Paradox: when technology dramatically increases the efficiency of using a resource, total consumption increases rather than decreases. The lower costs expand the market by pulling in entirely new buyers — people who previously consumed nothing.

This is exactly what AI is doing to professional expertise: turning a high-cost, high-threshold product into something millions of small businesses can finally consume. It will give them access to services and capabilities once reserved for big companies, and in doing so unlock the SMB market in entirely new ways.

Why Expertise Has Always Been “Lumpy”

Much of the conversation around AI in business has been focused on helping Fortune 500 companies optimize operations, reduce headcount, and improve efficiency. But there are more than 30 million SMBs in the U.S. alone, and hundreds of millions globally. These businesses — local bakeries, auto shops, landscaping contractors — want the same things large corporations do: price correctly, hire well, market effectively, and make informed financial decisions.

The constraint has never been demand. It has been access.

Historically, professional expertise came with a “minimum order quantity.” If a business wanted marketing optimization, it hired an agency at $5,000 a month. Financial strategy might entail bringing on a fractional CFO for $10,000 a month. Access to these services usually required retainers, long-term commitments, fixed costs.

For the average mom-and-pop shop, this was out of reach. Many forego these services not because they didn’t care, but because expertise was bundled and expensive. Important routine decisions around pricing changes, capital investments, and hiring plans either didn’t happen, or were made on gut instinct. This is what made the SMB economy so brittle.

How AI Changes the Equation

AI not only lowers the cost of expertise, but also makes it more consumable in smaller pieces. It shifts professional knowledge and services from a fixed commitment (salary or retainer) to a variable one (per token). Expertise is now something small businesses can access on demand, per task, per question, per decision.

Before, a bakery owner might never analyze unit economics because a CFO required an ongoing commitment. In an AI-enabled world, that same owner uploads a spreadsheet and asks, “Can I afford to buy this new oven?” The answer costs a few dollars. The value is solvency.

This shift also disrupts the traditional agency model, which essentially charges SMBs to access their talent. Incentivized by margins, these agencies often staff smaller accounts with junior employees who have little context on the business. The incentives are misaligned.

AI agents don’t charge retainers. They charge for execution. And as the cost of business expertise drops, these agents don’t just capture existing demand. They unlock a market of millions of businesses that previously spent little or none on professional services.

It’s not just millions of businesses paying $10 or $100, either. Others will pay more — sometimes far more — once they see the ROI. AI enables small businesses to try expertise, see its value, and discover their true willingness to pay.

The Shift — And Where We’re Investing

These dynamics point to a broader shift in how business capability is created and distributed.

In the old world, capability was a function of tools and headcount. Businesses bought software, then hired people or agencies to run it. Tools and execution were separate line items, and only large companies could afford both at scale.

With AI, capability becomes a function of compute. The tool and the work collapse into a single system. Instead of buying software and staffing around it, businesses increasingly seek to buy outcomes. The next generation of AI companies serving SMBs will look like this: part SaaS, part agency, with AI-powered services baked into the product.

In this new world, companies and agencies that offer only execution or just tools will face pressure from AI agents that can operate 24/7 at marginal cost. The ones that thrive will differentiate with taste, judgement, and accountability for results. 

We’re looking for founders who understand this shift, particularly those who are building:

• solutions, not tools, where the AI is both the product and the service layer;
• systems designed for trust and control, not just efficiency, as SMBs must believe in the agent before delegating important work to it;
• distribution and customer support models tailored for the SMB market, which require different playbooks than enterprise sales.

The most valuable AI companies of the next decade won’t only be the ones selling efficiency to the Fortune 500. They’ll be the ones acting as the fractional C-suite for Main Street.

If you’re building this, I’d love to hear from you: enzo@reachcapital.com