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Artificial Intelligence

The $2 hot dog strategy: Why AI can’t replace five-star service

Published August 18, 2026 in Artificial Intelligence • 7 min read • Audio availableAudio available

AI is taking the effort out of professional services, and customers know it. Businesses must stop selling billable hours and start delivering unreasonable hospitality, writes Howard Yu.

Rapid read:

  • For a long time, we sold time. Now is the time to curate the experience, both for the customer and for the person doing the work.
  • People don’t remember what you say; they remember how you make them feel.
  • AI takes the effort out of the equation, and customers can feel it. They know lawyers are using AI, consultants are using LLMs, and banks are running agents behind the scenes.

 

Early 2010. It is a busy lunch service at Eleven Madison Park in New York. The New York Times had given it four stars the year before. Four friends are finishing their meal.

The general manager, Will Guidara, overhears them. These out-of-towners have eaten their way across the best restaurants in the city all week, and they fly home in a few hours.

One says the single thing they never got to do was eat a New York street hot dog. Guidara walks out the front door, finds the cart on the corner, and buys a hot dog for $2. He carries it back to Daniel Humm’s kitchen, has it cut into four, plates each piece, and serves them himself.

The visitors lose it. Of everything they ate that week, the hot dog is the story these guests will tell for the rest of their lives. Guidara built a career on that instinct and wrote a book about it, Unreasonable Hospitality.

“Service is black and white,” he wrote. “Hospitality is color.” He also put it another way: “I wasn’t in the business of serving people dinner. I was in the business of serving them memories.”

That distinction is about to take on great significance for many companies, regardless of their business.

From hours to usage

For as long as we can remember, professional service providers have sold time. Law firms, consultancies, and accountants bill by the hour. Banks take a percentage of the assets a banker manages on your behalf. Each puts a price on human effort.

AI takes the effort out of the equation, and customers can feel it. They know lawyers are using AI, consultants are using LLMs, and banks are running agents behind the scenes.

Worse still, customers now self-serve, letting smart tools compare services. That’s how pricing follows behavior. People are moving away from billing by the hour toward paying for outcomes.

In its 2025 State of the US Legal Market Report, the Thomson Reuters Institute states that the billable hour,  “may be long past its expiration date.”

And yet the human element is back in demand. We know this because Vivino, a popular wine app based in Denmark, has already run the experiment. Point your phone at a wine label, and it instantly gives the producer’s name, the region, the vintage, the average price, and a rating.

The app has been downloaded more than 70 million times. Co-founder Heini Zachariassen said Vivino processes 100,000 ratings a day, while industry bibles such as Wine Spectator and Robert Parker might rate 20,000 wines a year.

A 2024 study in the Journal of Wine Economics found that crowd ratings broadly align with those of professional critics.

With a single invention, the knowledge a sommelier accrues over a decade became a free resource in your pocket. Surely that was the end of the sommelier? Far from it.

Since the app launched in 2010, the sommelier’s role has become celebrated. The 2012 documentary Somm turned the Master Sommelier exam into a spectacle and made somms, in Decanter’s words: “The wine counterpart to celebrity chefs.”

In July 2025, with apps everywhere and chatbots also responding to wine inquiries, the Court of Master Sommeliers, Americas, passed the largest class of advanced sommeliers in its history.

The sommelier’s scarcity was knowledge, and the app erased it. But the key ingredient was never raw data; it was the person serving the table who could read the room. Who’s paying? Are they worried about looking cheap? What’s the purpose of the dinner?

It’s the sommelier’s responsibility to select the right bottle for the right occasion at the right price.

I wasn't in the business of serving people dinner. I was in the business of serving them memories.
- Will Guidara

Bankers, doctors, and any sales floors

I spend time with private bankers, and they all tell me the same thing. Their wealthiest clients do not want a chatbot; they want a person across a table. And the expectations for that person keep evolving.

McKinsey surveyed affluent households in 2024 and found almost 80% would rather pay a premium, 50 basis points or more, for human financial advice than take a cheaper automated service. But importantly, that human adviser would now be expected to act as “part wealth strategist and part life coach.”

For most of banking history, that kind of attention was rationed to the very rich due to time and staffing constraints. AI removes that excuse. Product knowledge is easy now.

The client expects the banker to walk in already understanding their life, connecting the portfolio to their kids, the business, and the thing that keeps them up at night, and making them feel, for that hour, like the most important person in the room. People don’t remember what you say; they remember how you make them feel.

Diagram of a marketing funnel titled 'From captivating to converting': pink stages Awareness, Interest, Desire feed Captivate; blue stages Intent, Purchase, Loyalty feed Convert.

That is the Michelin-star standard: unreasonable hospitality.

In Singapore, DBS gave its 500 customer service officers a generative AI assistant. One said it, “freed up bandwidth for my team and me to engage our customers more deeply.”

In medicine, ambient AI listens to the patient visit and writes up the notes. The Permanente Medical Group ran it across more than 2.5 million patient visits in a little over a year. When the technology is used well, the doctor can focus on you instead of typing on a screen.

MIT economist David Autor highlights a favorite example. When the ATM arrived, everyone assumed the teller was finished. Instead, teller numbers grew for the next 30 years, and the work shifted from counting cash to helping people with what a machine could not. The technology raised the value of the human connection and role.

What to do about it

I teach a distinction I call captivate versus convert. Convert is the transactional game: the search, the comparison, the checkout, and the follow-up.

It’s the role agents are taking over. Captivate is the other game: creating desire, meaning, and the sense that this place sees you. Machines do not play it.

As one of my readers who runs an online brand put it, we do not lose the funnel; we split it. The errands go to the agent; the desire remains human.

When automation gives a worker back 20 minutes, you can pull it out as a cost or spend it on the customer. If you only measure speed and volume, speed and volume are exactly what you will get.

Put warmth, judgment, and follow-through as differentiation, because that is now the core product. For a long time, we sold time. Now is the time to curate the experience, both for the customer and for the person doing the work. That is a far better job than the one the machine is taking anyway.

Authors

Howard Yu

LEGO® Professor of Management and Innovation

Howard Yu, hailing from Hong Kong, holds the title of LEGO® Professor of Management and Innovation at IMD. He leads the Center for Future Readiness, founded in 2020 with support from the LEGO Brand Group, to guide companies through strategic transformation. Recognized globally for his expertise, he was honored in 2023 with the Thinkers50 Strategy Award, recognizing his substantial contributions to management strategy and future readiness. At IMD, Howard Yu co-directs the Strategy for Future Readiness program and the Future-Ready Enterprise program, which is jointly offered with MIT.

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