Monday incorporating AI Capabilities

Investment Analysis Clubs Saul’s Investing Discussions
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This is a press release today, that I have shortened and paraphrased in places for my notes:

Monday unveils plans to incorporate transformative AI capabilities in 2023.

Monday is opening its platform for developers to build endless AI app capabilities and kicking off with launching initial apps via the monday AI Assistant

Monday, a work operating system (WorkOS) where organizations of any size can create the tools and processes they need to manage every aspect of their work, today unveiled plans for how the power of AI will be incorporated into the platform in 2023. Monday is opening up its platform for third-party developers to build AI apps on the monday WorkOS, which will be available to customers through the monday AI Assistant. It will launch a beta version of the monday AI Assistant in May, expanding how customers interact and build on the WorkOS platform.

As an initial offering, monday.com will release a collection of innovative apps built internally on the same monday AI Assistant infrastructure where external developers will soon be able to build. These apps will support various use cases, from sharing helpful suggestions to improving workflows, and will include:

Automated Task Generation: Create project plans painlessly and in less time based on customer input and goals.

Composing and Rephrasing Emails: Save time by using monday AI to write and edit emails more quickly within monday sales CRM.

Summarizing: Focus on what’s important while monday AI summarizes complex topics and provides relevant action items.

Formula Builder (to be released at a later date) : Describe a task or team objective to monday AI and it will generate a formula that will help complete those tasks more efficiently.

“Generative AI is a huge step forward for not only the quality, but also the ease, with which anyone with coding capabilities can create amazing AI software,” says Roy Mann, co-Founder and co-CEO at monday.com. “In the true monday way, we’re leveraging the power of the global developer community to provide optimal value to our customers, by opening up our infrastructure for AI apps to overlay the Monday Work OS. We’re excited to see the incredible ways developers utilize AI to bring new solutions to the monday.com marketplace.”

Monday will become one of the first SaaS companies to develop AI capabilities in an open way that will allow external developers to add further functionalities and broaden the Monday ecosystem. The resulting apps will then be available to our customers through the AI Assistant and our apps marketplace. Opening the platform in this way will advance the company’s mission of democratizing software, as any monday.com customer will be further empowered to build their own customized software.

To jumpstart the growth of the AI marketplace, monday.com will host an external hackathon from June 20-22, offering an in-person experience to developers in London, New York and Tel Aviv, and an opportunity to participate virtually to developers around the world.

Developing monday AI is a natural next step in deepening how our customers interact with our software and supporting their ever-growing work processes. We are just scratching the surface on what we can accomplish with AI and plan to keep expanding our platform based on our customers’ true needs.

The Work OS platform is built to be entirely flexible and with this launch, not only do those with coding abilities have endless opportunities to build, but the abilities of the no-code customers of monday.com are strengthened as well. These new additions to the platform further align the entire monday.com community around the company’s core mission to democratize software for all and as AI is continuously integrated into the platform, the possibilities are endless.

As I am not a techie and thus don’t fully understand the import of this, I will be happy to have others chime in with their comments.
Thanks in advance,
Saul

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Two questions, in order of increasing importance:

Which company is not thinking about “plans to incorporate transformative AI” ?

me: seems like very few

Which company will meaningfully extend their product/service set with machine learning/AI and monetize it?

me: I don’t know, seems like tools like ChatGPT (as one example) are being most successful in more qualitative, creative and open-ended problems (e.g., write a dialogue, plan a menu) and less on precise quantitatively outcomes (forecast MNDY Q2 2023 financials).

my top choices today:
msft, snow, ttd, net

my not-top choices today:
crwd - I like, just uncertain on their slowdown and competition
bill - I like, just too economically sensitive
ddog - I like, just smaller opportunity than NOW
mndy - too much competition, too commodity
any bi tool (AYX) - too commodity
any code repo tool (GTLB) - too niche-y, commodity

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This can significantly improve their moat if they are successful in creating a marketplace for AI apps to get work done more efficiently.

One of the most impressive part about Monday is their pace of innovation. I am anxiously waiting for some product announcements on Generative AI from NET, DDOG and SNOW to make sure they are moving fast here.

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Hi Saul,

I appreciate the fact that the new Large Language Models can now enable one person to start a new company (the LLMs are just the best assistants and now each of them can talk amongst themselves to solve many very difficult problems and then generate solutions for each problem - not to mention these LLMs can also then implement these solutions with very little direction, by the Founder).

When investing with this paradigm shift in mind,
The question I first try to answer is: who among existing companies will not be disrupted by the above? Why is this question relevant: How many existing companies, when faced with an as good product/solution-suite for less money (due to this extremely more efficient production process) will not be disrupted?

And then I ask myself, or my LLM, which companies provide the infrastructure for the above vast disruptions to occur?

Lastly, which of those companies have the characteristics of what would we look for, among those who follow the rules of your Board here?

Is Monday going to be one of the enablers during this time? I don’t know.

Long…Snowflake, Cloudflare, Datadog😎

(Full Disclosure: I also maintain a 27% position in Tesla)

Best

Jason

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While we’re on the subject, great upgrade by Tigress financials on MNDY out today. Their 12 month price target was raised from $200 → $210 (quite a climb from today’s price of $130). Here are some highlights:

“We reiterate our Buy rating on MNDY and increase our 12-month target price to $210 as strong demand for its innovative Work OS continues to drive increasing customer adoption and plans to incorporate transformative AI capabilities, creating a further upside catalyst.”

“MNDY also recently announced a new partnership with the world’s largest enterprise collaboration app provider, Appfire, to expand the app marketplace with apps that meet the growing needs of the monday.com community.”

“MNDY has also recently announced plans to incorporate transformative AI capabilities, opening its platform for developers to build endless AI app capabilities and kicking off with launching initial apps via the monday AI Assistant, enabling it to become one of the first SaaS (Software-as-a-Service) creating the opportunity for external developers to add increasing functionality in its monday.com ecosystem.”

“MNDYs potential opportunity in a TAM (Total Addressable Market) close to $40 billion that should grow to over $70 billion over the next few years should enable significant revenue growth as monday.com is already seeing rapid adoption that continues to accelerate driven by the ease of adoption, increasing marketing efforts, and ease of use.”

Here is the full post:

Feels like a company with a lot going for it in the middle of a tough time.

Hang in there.

Best,
BTL
@laneylawyer
Long MNDY

No investment advice, just musings.

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IMO, it’s an imperative that they incorporate these kind of capabilities. (Same goes for a lot of companies.) One thing I’d like to highlight is that this press release is a follow through on things said in their latest earnings call:

Roy Mann
[…] And now that we see that like the barrier was lowered so much to create such powerful AI tools. What we naturally do at monday, we open up the platform and allow anyone to build on top of that. So we have already added many layers that enable anyone, including us, to build AI tools on top of monday. We’ll soon have an AI Hackathon where we’ll invite anyone to build on top of the platform. And essentially, have a dedicated section within the marketplace for any AI tool that can benefit anyone. And I think that’s like super exciting. And we’ll see like long-tail solutions for specific industries and then it’s like exciting.

Eran Zinman
Yes. […] just to add more color. So one of the main building blocks that we have in the platform is our monday [workdocs]. And there we already saw a lot of potential use cases for using AI to generate automatic content to summarize content within the board. So definitely, we saw some exciting POCs, and we plan to expand like we said, the platform and start with some off-the-shelf solutions to start with.

I.e. we already had a vague idea that they were working on something, and by comparing it with this press release we now know that they were already on top of it, and likely have been for some time. For me, this alone is important. Artificial intelligence is a complex disruptive force partly because it’s rapidly developing at an accelerating pace, and I tend to look not only at the technical aspects, but also at what’s said and done. Because, ultimately, it’s the company’s understanding that matters, not mine.

Turning to the announcement itself, I really like the way they go about this, and feel it’s a perfect fit for their product/platform. Here’s a short video showing what the AI Assistant looks like.

As can be seen, they’re integrating this across their platform. It’s hard to argue against the value of what’s shown. For example, an being able to write

Find the deadline for each project and add 5 working days

instead of

TEXT(HOURSUM({Time Tracking Column}) + HOURSUM({Subitems Time Tracking Columns})/24,"HH:MM")

should speak for itself.

Here’s a view from the above video that shows the integrated and extensible nature of the design, where externally developed “AI apps” should be able to add and extend functionality:

image

In my opinion, this is a significant leap forward with potential to significantly strengthen their platform.

Disclosure, since I’m not sure if I joined in on the “crawling out the woodwork” thread about still holding monday: I still have a position in monday, including their real estate and forestry businesses.

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Shining Bright Like a Diamond in KFL Work Mgmt. Tracker; Potential 1Q Beat + Raise - KeyBanc

“We see a positive setup heading into MNDY’s C1Q23 print. While we acknowledge the continued macro uncertainty and scrutiny on work mgmt. priorities, we see potential upside to 1Q revenue and OM and 2023 guidance. More importantly, our KFL work mgmt. tracker saw MNDY growth accelerating and share gaining vs. peers through the end of April, which provides us with incremental confidence in execution and LT competitive positioning. With the recent pull-back in MNDY shares (-21% since 4Q22 print vs. Nasdaq’s +2%), we see a positive risk-reward.”

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