Don't forget to jargon check your AI

7 snips

Sep 27, 2023

Nathan Baschez, Co-founder and CEO of Lex, an AI-powered writing tool, shares insights on the evolving landscape of AI in writing. He discusses the market's capacity for AI tools and the advancements in generative AI technology. Diving into the financial aspects, they explore pricing strategies for AI services and the economic implications of using technologies like OpenAI. Baschez emphasizes the importance of genuine innovation and user engagement in a competitive market as startups navigate this rapidly changing environment.

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ANECDOTE

Fundraising Announcement Goals

Lex's initial launch had an overwhelming response due to the novelty of AI in writing tools.
The current fundraising announcement aims to attract talent and signal stability to users.

ADVICE

Hiring Founding Engineers

Hire "founding engineers" to build the core business alongside the founders.
Offer them significant ownership and influence over the product's direction.

ADVICE

Balancing Learning and Building

Prioritize building features, analyzing data, and engaging with users.
Focus on practical product development over in-depth AI research.

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This week on Equity, Alex was joined by Nathan Baschez, the CEO and founder of Lex, an AI-infused online writing tool that recently raised capital. Together, we're talking through a few key topics that have been top of mind in recent months:

How many AI-powered, or AI-using writing tools can the market support?
How far into the generative AI moment we are, and how much we should anticipate in the form of technology improvements?
And then we discussed the nuts and bolts aspects of pricing an AI-powered service and other financial matters related to building a service today that leans on artificial intelligence.

The last question is far from idle. Recall that back in 2020 there was conversation amongst venture players about the economics of AI startups, with the perspective at the time indicating that while the cohort might have more difficult early economics, that their numbers (gross margins, really) would improve over time. But what about when a startup is using, say, an OpenAI API for its core AI work? Will similar efficiencies bloom?

Equity is back into its regular groove now that Disrupt is behind us — more to come!

And before we go: Check out the UpFlip Podcast where you get to unravel how great businesses are built, how they are run behind the scenes and how their success can be replicated. We think you'll love episode 79 where they featured this guest who transformed his passion for gardening into a $7.3 million-a-year venture. You can find the podcast on Youtube or where ever you listen to podcasts.

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