India will create AI middle managers
The rise algorithms managing staff
Optifye.ai, a YC-backed startup, recently went viral for their demo video—but not for reasons they'd hoped. The company builds AI tracking tools for assembly lines, or put more bluntly, productivity trackers for factory workers through CCTV cameras. Their demonstration showed two managers drilling into dashboard data to trace a production slowdown to a single worker who wasn't meeting targets. The concept feels eerily dystopian. While we've all understood such technology was theoretically possible, seeing it actually implemented is jarring—our instinctive response is rejection. What made the situation worse was how the video seemed filtered through a lens of privilege, lacking any empathy for the workers being monitored. The backlash was swift enough that YC eventually pulled the video from their feed.
This isn't the end but merely the beginning. I believe we'll see more of these algorithmic productivity solutions taking root in India, and I'm not surprised that Optifye's founders were of Indian origin.
Evolving employer and employee relationship
Our family ran a puja store business for over four generations. Growing up, I knew people who had served in our shop for 10-15 years or more. Yet in the final 8 years before our shop closed in 2022, my parents struggled immensely with recruiting and retaining staff. Rising wages was one factor—our business margins simply couldn't accommodate them. But equally telling was how few people preferred working in a puja store anymore. The environment resembled a grocery setup: daily opening heavy shutters, moving large gunny bags around, working in a rustic setting that was physically demanding. Young workers increasingly gravitated toward saree stores, supermarkets, or jewelry shops where they could work in air-conditioned comfort with less physical strain.
I often find myself wondering: what fundamentally changed in these last few decades? The meaning of work itself, workplace preferences, the employer-employee relationship—all transformed dramatically. We've moved away from an era where limited workplace choices and uncertain futures for the families kept workers loyal to a single job. The risk of damaged reputation within a tight-knit business community, the need to borrow emergency funds without collateral and repay through dedicated work—these traditional social bonds have largely dissolved. When you ask business owners today, their instinctive answer might be "Staff aren't trustworthy anymore," but the reality is far more complex and multifaceted. The social contract that once defined these relationships has been completely rewritten, leaving traditional businesses struggling to adapt to a new employment landscape where loyalty is no longer secured through necessity but must be earned through competitive conditions.
Am I getting fooled?
Loyalty and trust are built over time, yet when employers approach hiring with the assumption that staff won't stick around or develop loyalty, they inevitably resort to alternative management methods to measure employee worth. And what gets measured gets managed.
A year ago, while interviewing business owners across the country, I met a gentleman running a beauty products store in a small town near Nagpur. When I asked how technology had improved his productivity, he pointed to a CCTV camera and declared, "That camera is my brother." Intrigued, I listened as he explained how the camera connected to WiFi, allowing him to monitor his store from anywhere—whether on the road or at home. In his mind, this camera "took care" of his business during his absence.
The store owner was convinced his staff spent most of their day absorbed in their mobile phones, only attending to customers diligently when he was physically present. He struggled with basic operational challenges: getting employees to report out-of-stock items, track inventory, and maintain engagement. His frustration led him to conclude that employee disengagement was the core problem. The deeper reality, however, was likely that these workers viewed their positions as temporary stepping stones—jobs they cared little about while waiting for better opportunities. This human reality meant nothing to his bottom line.
Beyond everyday management, the owner faced another significant challenge: theft during busy seasons. The store would fill with customers during festivals, requiring temporary workers to manage the crowds. These peak periods brought serious risks of shoplifting and inattentiveness from seasonal staff. The owner believed his surveillance system would allow him to "trace back to the source of truth" when incidents occurred.
AI middle managers
Larger businesses traditionally hire middle managers to address productivity challenges. These managers monitor ground-level staff and maintain operational order. Interestingly, this middle layer serves another critical function: it elevates the business owner's status. The hierarchical structure itself generates a certain fear and respect—the owner's words and instructions carry more weight when filtered through middle management. This supervisory buffer is a luxury many small business owners desire but simply cannot afford.
This gap creates a perfect white space for AI to occupy—monitoring employee productivity at both store and factory levels. When selling AI solutions in India, I've encountered persistent skepticism centered on labor being too inexpensive to justify the technology investment. But this perspective misses a crucial reality: human employees bring their own set of inefficiencies, and varying attitudes toward their jobs.
AI in this case isn't just replacing labor—it's positioning itself as that middle manager mediating between employees and business owners. Rather than eliminating frontline workers, it's would be the middle management layer that AI is quietly displacing while making overall throughput more efficient.
I've observed this transition in businesses where AI now makes follow-up calls to sales and customer support teams, ensuring they're pursuing leads and updating the CRM properly. We initially believed these systems would replace salespeople, but they're actually augmenting their supervisors.
The Indian startup Storepulse.ai recently demonstrated this evolution in action. Their intelligence layer atop standard CCTV cameras helps prevent misreporting and theft during inventory unpacking and stock unloading—tasks that would traditionally require human supervisory oversight. As these technologies become more sophisticated and affordable, we're witnessing the birth of algorithmic management where small business owners can finally access the supervisory capacity once reserved for larger operations.
Most factories and shops are already required to have CCTV cameras installed on their premises. It seems only a matter of time before these passive recording devices upgrade to AI-enhanced systems that enable business owners maximize productivity and efficiency. As dystopian as this might sound to some, given the context of how Indian business owners traditionally approach operations, this transition appears not just possible but probable.
Concluding thoughts
There exists a significant disconnect between the idealized world often advocated online versus the pragmatic realities of day-to-day business operations on the ground. This shift in workplace monitoring goes beyond just boss-worker relationships. It raises bigger questions about how we govern people and how comfortable we're becoming with surveillance throughout society. This evolution feels as inevitable as it is concerning—a reflection of society's willingness to embrace efficiency even when it arrives in forms we once considered too intrusive to accept. A business owner's installation of CCTV would receive a similar explanation as a car owner installing a dashcam, as they both want to access the source of truth. When used responsibly, AI-powered tools can identify bottlenecks in production or service, allowing businesses to optimize their operations and improve efficiency. But its a thin line.
In another tweet Hari (@haridigresses) articulates why a startup like optifye would get more adoption in India as compared to other countries.
Good article, Dharmesh.
Founders are using tech to solve problems - so-called work-ethic issues - created by business owners who refuse to actively listen, offer better workplace benefits, or treat employees fairly.
In many non-tech industries—especially mom-and-pop stores—labor is seen as replaceable, leading to inadequate wages, poor training, and hostile work environments.
While this isn’t universal, it is common.
This is why self-employment through platforms like Ola, Uber, or Swiggy is appealing—independence outweighs poor workplace conditions.
Using AI to sweep these issues under the rug feels like a step backward.
This sounds right. While we don't know if AI will eventually replace middle managers, I do see corporate leaders actively testing this hypothesis, especially for non-tech roles. Those of us in senior-mid management in (thinking vs executing roles) are now being actively encouraged to execute with AI. While everyone is going to have varied degrees of success, I certainly believe that folks in the junior track will have to think long and hard about their roles and what would make them indispensable in their teams.