From Copilots to Agents: Rebuilding the Company Around AI - a16z Podcast Recap
Podcast: a16z Podcast
Published: 2026-02-18
Duration: 1 hr 0 min
Guests: Carlos Garcia Otati
Summary
Carlos García Ottati, founder of Kavak, discusses the evolution of the company from using AI as a tool to integrating AI agents that manage most customer interactions. This transition allowed Kavak to scale efficiently across Latin America and the Middle East, overcoming challenges in emerging markets.
What Happened
Carlos García Ottati founded Kavak after personal experiences with fraud in the Latin American used car market. The company now operates as a comprehensive marketplace, handling everything from buying and selling to financing and logistics. By 2021, Kavak had expanded rapidly with 10,000 employees and a growth rate of 300%.
The used car market in Latin America is fraught with fraud, with 40% of transactions involving crimes like kidnappings and forged documents. Only 5% of used cars in Mexico are financed, which is starkly lower compared to the 90% in the U.S. Kavak's strategy involved creating four businesses under one umbrella: an e-commerce platform, reconditioning and warranty operations, a financing engine, and logistics.
Kavak initially focused on resolving these issues in Mexico City and other large urban areas with significant market opportunities. Carlos's vision was inspired by technological advancements, similar to the transition from letters to email in the 90s. The company began exploring AI in 2017, initially as a complement to their workforce.
As the company integrated AI, they faced challenges with edge cases in car purchases, which required a robust communication system. They eventually transitioned to AI agents handling 90 to 95% of customer interactions by 2023. This involved a year of flat growth as they restructured their business around AI.
Kavak's approach is forward-thinking, building infrastructure for future AI models like ChatGPT 7. During this transition, the company shifted from a high-growth phase to focusing on profitability. Kavak's customer base includes 40% first-time car buyers, emphasizing the company's role in expanding middle-class access.
Carlos emphasizes the importance of evolving as a leader, aligning personal growth with the company's needs, and regularly questioning if he remains the right CEO. This philosophy extends to adapting personas and skills to meet the demands of each business phase, akin to actors staying in character.
Key Insights
- Kavak operates in a market where 40% of used car transactions involve crimes such as kidnappings and forged documents. By building an all-in-one marketplace, they offer a safer alternative, handling everything from financing to logistics.
- Only 5% of used cars in Mexico are financed, compared to 90% in the U.S. Kavak's strategy to introduce a robust financing option taps into this disparity, potentially unlocking a massive market.
- In 2023, AI agents at Kavak handle 90 to 95% of customer interactions, a shift that required a year of flat growth and restructuring. This approach underscores the tension between short-term growth and long-term efficiency gains.
- Carlos García Ottati questions his role as CEO regularly, likening leadership to an actor staying in character. This self-reflection is crucial for aligning personal growth with the evolving needs of a rapidly scaling company.
Key Questions Answered
How did Kavak address fraud in the Latin American used car market?
Kavak tackled fraud by creating a comprehensive marketplace that manages the entire car transaction process, including buying, reconditioning, selling, and financing. This approach helped reduce the 40% fraud rate prevalent in the market.
What role does AI play in Kavak's operations?
AI plays a crucial role in Kavak's operations by handling 90 to 95% of customer interactions. This transition to AI agents helped the company scale efficiently and improve customer service.
Who is Carlos Garcia Otati?
Carlos Garcia Otati is the founder and CEO of Kavak, a leading online used car marketplace in Latin America. He founded the company after experiencing fraud in car transactions and has led its expansion across multiple countries.