Jaya Gupta and Ashu Garg of Foundation Capital develop a thesis on the emergence of a new generation of systems of record centered on decision traces rather than traditional business objects.
The previous generation of enterprise software created a trillion-dollar ecosystem by becoming systems of record: Salesforce for customers, Workday for employees, SAP for operations. The current question is whether these systems will survive the shift to AI agents.
The authors agree with Jamin Ball's analysis that agents do not replace systems of record but raise their requirements. However, they identify a critical missing layer: decision traces. These capture the exceptions, waivers, precedents, and cross-system context that currently live in Slack, deal desk conversations, escalation calls, and employee memory.
The fundamental distinction opposes rules (what should generally happen) to decision traces (what happened in this specific case, under which policy, with which exception, on which precedent). Agents need access not only to the rules but to the history of their application.
"Systems of agents" startups have a structural advantage: they sit in the execution path. They see the full context at the moment of decision and can persist these traces as durable artifacts. The accumulation of these traces forms a "context graph": a living record of decisions linked across entities and over time, where precedent becomes queryable.
Incumbents cannot build this context graph. Operational systems like Salesforce store the current state, not the state at the moment of decision. Data warehouses like Snowflake receive data via ETL after decisions are made, losing the decision context.
The authors identify three paths for startups: replacing existing systems of record (such as Regie for sales engagement platforms), replacing specific modules (such as Maximor for finance), or creating new systems of record for categories of truth never captured before (such as PlayerZero for production engineering).
Signals for identifying these opportunities include high headcount on manual workflows, decisions rich in exceptions, and the existence of "glue" organizations (RevOps, DevOps, SecOps) that exist precisely because no system captures the cross-functional workflow.