Mayfield’s Navin Chaddha bets big on AI remaking consulting, law, and accounting
Navin Chaddha, managing director at 55-year-old Silicon Valley venture firm Mayfield, says AI will slash costs and boost margins in $5 trillion people-driven industries like consulting, law, and accounting. He’s backing startups that use AI teammates to automate repetitive tasks and serve smaller clients ignored by giants like Accenture.
Chaddha told TechCrunch at a recent StrictlyVC event that AI will handle the grunt work, cutting human labor drastically. His example: automating Salesforce implementation with AI “as the horse” and a human “in the loop” for final steps. This lets startups charge clients by outcome, not hourly, unlocking software-like 60-70% margins and 20-30% net income — a game changer for labor-heavy service businesses. 
“Use AI as the horse to do it, and whatever AI can’t do, have the human in the loop.”
“If 80% of the work will be done by AI, it can have an 80% to 90% gross margin. Humans can still have a 30% to 40% margin. You could have blended margins of 60% to 70% and produce 20% to 30% net income.”
Chaddha led Series A for Gruve, an AI tech consulting startup growing security services revenue from $5M to $15M in 6 months. Gruve uses outcome-based pricing: no fees until a client’s network is actually hacked. Cisco reportedly loves the model.
“[Gruve] says, ‘[You pay us] zero. If you get hacked, if there is an event, if I look at it, then you pay me.’”
He warns big consulting firms face an innovator’s dilemma. Giants like McKinsey and Accenture have entrenched business models and revenue streams tied to traditional billing. They risk being undercut by AI-powered companies targeting millions of small businesses.
“These small companies, which are not competing with them today, mark my words: in 10 years, they will be competing with them.”
“When do I switch to an outcome-based AI model? Because as a public company, my revenues are going to go down from predictable revenue to utility-based revenue.”
Mayfield set aside $100 million last fall for “AI teammates” startups. Chaddha defines an AI teammate as a digital companion collaborating with humans on shared goals, not replacing them.
“The aim is not to replace; the aim is to team up and collaborate together.”
He acknowledges job losses will happen but says markets will expand—citing past tech disruptions like Excel and Uber that initially scared workers but grew industries.
On startup valuations, he called a recent Israeli “vibe-coding” company acquisition by Wix for $80 million “nuts” given the company’s $2.4 million in ARR, but says “in today’s world, you don’t know.”
Chaddha’s advice for VCs: stick to your strategy, avoid FOMO, and remember investing is “an art” requiring discipline and experience.
“We’re in the money management business. We’re not about collecting logos.”
“During this part [of the cycle], a lot of money will get made. But I think 80% of the people are going to lose money.”
