Fulcrum Points

"Give me a lever long enough and a fulcrum on which to place it, and I shall move the world." — Archimedes

In the race to re-platform entire industries with AI, many efforts are directed at building larger levers—bigger models, more data, and more efficient inference. The words of Archimedes remind us that the power of a lever depends not just on its size, but on its position. The effectiveness of any tool, no matter how advanced, is fundamentally a function of both force and position.

This principle is particularly relevant to AI. The impact of an AI system is not determined by raw capability alone, but by where it is positioned within a workflow or value chain. A powerful algorithm deployed at a weak point yields little, while a modest model positioned at a critical juncture can inflect an entire industry.

AI giants will not be defined by technological superiority alone (though advancements in methods are essential); but rather, by their ability to control the fulcrum points where AI creates the most leverage—where data originates, where networks converge, where states change, where time collapses. Many AI companies will fail not because their models are underperforming, but because they are standing in the wrong place. Just as in physics, both power and position matter.

The AI companies that will win will capture strategic positions—fulcrum points—where the benefits of AI can compound. These groups will convert technical prowess into lasting market power by controlling this critical real estate in their respective domains.

This essay examines these positions of leverage — fulcrum points — and explores how seemingly subtle choices about where to deploy AI can unlock non-linear outcomes.

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Heuristics for Value

• Foundations (Data Generation, Infrastructure Control)

• Systems (Pipeline Ownership, State Change Control)

• Convergence Points (Network Junction Points, Value Chain Position)

• Dynamics of Change (Time Compression, Irreversibility Points)

• Standards (Measurement Authority, Regulatory Embedding)

Data Generation

Does the position accumulate proprietary data that creates compounding advantages?

Controlling data generation is the most fundamental form of strategic positioning in AI. Organizations that shape how information comes into existence gain architectural control over all downstream possibilities. This position encompasses far more than data collection; it involves defining the essential characteristics of information at birth. Through control of data creation, organizations establish the foundational schemas, quality parameters, and metadata frameworks that determine the scope of all subsequent analysis. The advantages compound over time as the accumulated data shapes industry standards, gains depth, and creates ever-higher barriers to entry.

Consider next-generation sequencing in healthcare. Illumina's dominance flows from their control over how genetic information enters the digital realm. The company’s sequencing technology establishes the fundamental grammar of genomic data, shaping everything from basic research to clinical applications. Each improvement to Illumina’s sequencing platform reinforces its architectural control over the genomic value chain.

Examine where valuable information first comes into existence:
- Where are the moments of original data capture?
- What entity currently defines how that information is structured?
- Which data, if controlled from the point of creation, would shape all downstream possibilities?

Infrastructure Control

Does the position form the foundation that others must build upon?

Infrastructure control establishes positions that form the foundation of industry operations. This position transcends basic platform dynamics to encompass control over critical workflows, data flows, and process execution. Organizations that achieve infrastructure status shape how entire industries function. Their position strengthens through network effects as other players build upon their foundation, creating an expanding ecosystem of dependent innovations.

Electronic health records demonstrate the power of infrastructure positioning. Epic and Cerner have established themselves as the operating systems of healthcare delivery, with platforms that shape clinical workflows, reimbursement, and care delivery patterns.

Survey the foundational layers:
- What systems do other players have no choice but to build upon?
- Where do essential workflows naturally converge?
- Which platforms, if established, would create powerful ecosystem effects?

Look for positions where becoming optional is almost impossible - where bypassing the infrastructure would require rebuilding fundamental industry capabilities.

Pipeline Ownership

Does the position enable systematic improvements impossible in fragmented systems?

Pipeline ownership creates compound advantages through control of entire workflows. This position enables organizations to implement systematic improvements impossible in fragmented systems. Beyond mere process optimization, pipeline ownership allows for fundamental workflow redesign and the creation of closed feedback loops. The ability to coordinate changes across every stage of a process enables capabilities that would disintegrate across organizational boundaries. Through continuous refinement of the entire workflow, organizations in this position generate compounding advantages that point solutions cannot match.

Molecular diagnostics reveal the power of comprehensive pipeline control. Exact Sciences orchestrates every element of cancer diagnostics, from specimen collection through final reporting. Their command of the entire workflow enables continuous refinement of collection protocols, analysis methods, and reporting frameworks. Such comprehensive optimization remains impossible for companies controlling only fragments of the diagnostic process.

Map the critical workflows:
- Where do handoffs between different systems create friction?
- Which processes, if unified under single control, would enable step-function improvements in efficiency?
- What workflows, if owned end-to-end, would generate unique data or insights impossible to capture in fragmented systems?

State Change Control

Does the position control critical transformation points where value is created?

State change control involves managing fundamental transformation points where information or materials undergo key transitions. This position encompasses the conversion of physical to digital, unstructured to structured, or raw to processed information. The value flows from controlling these essential transformation points: moments where the nature of information or materials fundamentally changes. Organizations in this position create persistent value through standardization and structuring of complex information flows.

Healthcare offers several compelling examples of state change control:

• Clinical laboratories like LabCorp transform biological samples into quantitative results.

• AI pathology platforms like PathAI convert physical tissue information into machine-readable pathology slides, and ultimately, diagnoses.

• Genomic interpretation systems translate raw genetic data into clinically actionable information.

• AI medical image analysis platforms transform raw visual data into diagnoses.

Examine critical transformation points in your industry:
- Where do important transitions from one state to another occur?
- Which transformations, if controlled, would create downstream advantages?
- What state changes require trusted intermediaries?

Focus on transitions that are essential, recurring, and difficult to replicate.

Irreversibility Points

Does the position control processes that create permanent changes or commitments?

Irreversibility points represent positions of control over processes that create permanent changes or commitments. The strategic value flows from the essential nature of these positions - once a process reaches its point of no return, the controlling platform becomes indispensable. This dynamic creates powerful lock-in effects that strengthen over time.

The surgical robotics market illuminates this principle. Intuitive Surgical's dominance stems from multiple layers of irreversibility: surgeons invest thousands of hours mastering the da Vinci system, hospitals commit millions to installation and training, and surgical workflows become permanently structured around robotic approaches. Each procedure reinforces this lock-in as surgeons build muscle memory and expertise specific to da Vinci's interface. The true power lies not in the robot itself, but in becoming the medium through which surgical expertise is developed and expressed.

Trace the paths of permanent decisions:
- Where do customers make difficult-to-reverse commitments?
- Which processes, once initiated, create strong path dependencies?
- What positions would enable control over critical moments of no return?

Focus on points where the cost or complexity of reversing course naturally reinforces platform lock-in.

Time Compression

Does the position fundamentally accelerate critical processes in ways that enable new capabilities?

Time compression generates value through the fundamental acceleration of essential processes. Organizations in this position transform traditional workflows by collapsing conventional timescales. Beyond simple efficiency gains, time compression often enables entirely new capabilities through the transformation of periodic events into continuous or parallelized processes. This shift creates opportunities for real-time optimization and intervention impossible under traditional timescales.

The revolution in health monitoring illustrates this principle. Continuous glucose monitoring platforms like Dexcom have transformed diabetes care by shifting from discrete finger pricks a few times daily to minute-by-minute glucose readings. This compression from periodic to continuous monitoring doesn't just provide more data points, it enables entirely new interventions such as predictive alerts before glucose spikes and real-time insulin adjustments. Similarly, Apple Watch has transformed cardiac monitoring from annual EKGs to continuous heart rhythm analysis, allowing for instant detection of arrhythmias that might be missed in periodic checks. Finally, Oura's sleep analysis takes what was once a complex lab-based sleep study done once every few years and turns it into nightly sleep stage tracking, enabling users to optimize their sleep patterns through daily feedback loops.

Determine where time creates limitations:
- Which processes, if radically accelerated, would enable new capabilities?
- Where does the gap between event and response create inefficiencies?
- What workflows, if made continuous or parallel rather than periodic, would transform decision-making?

Find positions where collapsing traditional timescales would create fundamental advantages over mere efficiency gains.

Network Junction Points

Does the position become exponentially more valuable as connections increase?

Network junction points represent positions of control over critical intersections where different systems or networks converge. These positions derive power from their ability to mediate essential interactions between distinct networks. The value compounds as each additional connection amplifies the utility of existing ones. Organizations controlling these intersections can implement optimizations impossible for any single network participant to achieve. The most valuable junctions often exist where significant friction occurs in cross-network coordination.

Prior authorization in healthcare is an example of a network junction point. CoverMyMeds occupies the space between providers, payers, and pharmacies to enable cross-network optimizations that impact all participants, such as providing seamless in-workflow provider support that reduces administrative burden, delivering timely patient notices that improve transparency and adherence, and offering field team tools that streamline the prior authorization process. This same powerful dynamic emerges in platforms like Surescripts for e-prescribing. As more healthcare providers adopt the platform, pharmacies gain increased electronic prescription volume; as more pharmacies join, providers benefit from broader fulfillment options; and as more payers integrate, both groups gain enhanced real-time benefit verification capabilities.

Describe the critical intersections in a value chain:
- Where do different networks or systems struggle to interact?
- Which connection points, if optimized, would create value for all participants?
- What interactions, if mediated more efficiently, would enable new capabilities? 

Value Chain Position

Does the upstream position enable multiple paths for downstream value capture?

Value chain positioning focuses on establishing control over fundamental processes early in value chains. This upstream position enables multiple opportunities for downstream value capture. Beyond simple vertical integration, organizations in this position can shape how entire value chains develop. The ability to influence downstream activities while maintaining control upstream creates opportunities for both vertical and horizontal expansion.

Ambient clinical documentation platforms exemplify this upstream positioning in the patient-physician conversation. By structuring medical information as it is first created, companies like Abridge can generate multiple downstream benefits across healthcare, from automated medical coding to insurance claims processing to clinical trial matching, all flowing from a single source of data: the conversation.

Analyze where fundamental value creation begins:
- Which upstream positions would enable multiple paths for downstream value capture?
- Where can early process control create compound advantages?
- What positions would allow both vertical and horizontal expansion?

Look for points where small changes in upstream processes could create cascading benefits throughout the entire value chain.

Measurement Authority

Does the position define how an industry quantifies and interprets key phenomena?

Measurement authority represents a distinct form of strategic positioning focused on establishing authoritative standards for specific measurements and interpretations. Unlike state change control, which manages transformations, measurement authority defines the frameworks by which those transformations are evaluated. Organizations in this position determine how industries quantify and interpret complex phenomena. These standards become reference points that shape how entire fields evolve.

Measurement authority shows up prominently in healthcare quality reporting, where organizations like NCQA (National Committee for Quality Assurance) and The Joint Commission have established authoritative frameworks for measuring hospital and provider performance. HEDIS measures and accreditation standards authored by these governing bodies have become the default way the industry evaluates quality of care, influencing everything from reimbursement rates to how health systems structure improvement initiatives.

Identify challenges with standardization and interpretation:
- Which measurements or metrics drive key decisions?
- Where does the need for trusted standards create natural consolidation?
- What complex phenomena require authoritative interpretation?

Seek areas where becoming the trusted source of truth would create compound advantages in adjacent domains.

Regulatory Embedding

Does the position transform regulatory requirements into structural advantages?

In heavily regulated industries, embedding within compliance infrastructure creates uniquely defensible positions. Organizations that become essential to regulatory compliance transform external constraints into structural advantages. This position extends beyond regulatory compliance software as it involves becoming the medium through which regulation itself is interpreted and implemented. The combination of dynamic regulatory requirements and high switching costs creates powerful barriers to entry that strengthen over time. The most powerful positions often emerge where regulatory gravity naturally pulls toward consolidation.

Healthcare clearinghouses demonstrate this dynamic. Organizations like Availity and Change Healthcare have become essential intermediaries for claims processing, translating complex HIPAA requirements into operational infrastructure. These platforms play a role in ensuring compliant transactions between providers and payers, becoming indispensable to healthcare operations. As regulations around electronic transactions evolve, these clearinghouses adapt and become the de facto interpreters of how new requirements should be implemented across the industry.

Study where compliance creates the greatest operational inefficiencies:
- Which regulatory requirements generate the highest switching costs?
- Where do compliance needs intersect with core operational processes?
- What regulatory complexities, if absorbed and simplified, would unbridle broader innovation?

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In conclusion

The race to build more powerful AI systems often overshadows a major truth: leverage is not only about force, it's also about position. While technological superiority matters, the companies that will re-platform entire industries with AI will be those that identify and control the fulcrum points within their domains.

The inherent fragility of AI point solutions also reveals itself under this framework. As I argued in The Faster Horse Problem, AI enables value to grow exponentially, far outpacing the gradual improvements that come from incremental approaches. Point solutions are vulnerable to rapid obsolescence because they fail to capitalize on the technology's innately compounding nature: data aggregation, continuous learning, and network effects. Narrowly conceived solutions become liabilities susceptible to displacement by more strategically positioned systems that can tap into these dynamics.

The framework presented here—examining data generation, infrastructure control, pipeline ownership, state change control, network junctions, value chain positioning, time compression, irreversibility points, measurement authority, and regulatory embedding—provides a systematic approach to identifying these positions of significant leverage. These principles transcend AI and apply broadly across technologies, but they become essential as AI systems evolve beyond narrow, single-modality applications toward multi-modal, autonomous systems.

The future ultimately belongs to those who find and control the fulcrum points… until new fulcrum points emerge.

Thanks for reading,

Morgan