20VC: How to Survive and Thrive in a World of OpenAI, Are LLMs Being Commoditised, Where Does the Value Lie; Infrastructure or Application Layer, How Apple Could Win in a World of AI, How Amazon Could Threaten OpenAI and Why Google Struggle with Des Trayn
Nov 15, 2023
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Des Traynor, Co-founder of Intercom and a leader in AI-driven customer service, discusses navigating the fast-evolving AI landscape. He shares insights on the rapid commoditization of large language models and why startups should be wary of outdated advice. Traynor identifies essential questions businesses must ask to survive in a world dominated by OpenAI and explores how traditional companies can adapt. He also highlights Apple's potential to thrive with a privacy-focused AI approach, contrasting it with Google’s struggles in integrating LLMs.
Amazon could dominate the AI space through acquisitions, while Apple leads in AI innovation.
Startups face challenges in differentiating themselves in the commoditized AI industry and limited budgets for experimentation.
Consumption-based pricing may replace the traditional per-seat model in the AI industry.
Incumbents need to adapt their workflows, business models, and pricing strategies to incorporate AI capabilities and remain competitive.
Deep dives
The Potential of Amazon and Apple in the AI Space
In the podcast episode, it is suggested that Amazon could potentially dominate the AI space by acquiring and integrating AI technologies. On the other hand, Apple is seen as a potential leader in AI innovation, especially with the development of Siri and the integration of AI features into their devices.
The Challenges of AI Adoption in Startups
The podcast discusses the challenges startups face in adopting AI technologies. One challenge is the potential commoditization of AI, where startups offering similar AI solutions may struggle to differentiate themselves. Another challenge is the limited budgets for experimentation, which could lead to decreased investment in AI startups.
The Future of AI Pricing Models
The podcast explores the possibility of changing pricing models in the AI industry. It suggests that consumption-based pricing could replace the traditional per-seat model, where companies pay according to the work done by AI systems rather than the number of users. This could lead to a shift in how AI companies monetize their services.
The Role of Incumbents and the Potential Disruption of AI
The podcast highlights the potential disruption AI could bring to existing incumbents in various industries. It discusses the need for incumbents to adapt their workflows, business models, and pricing strategies to incorporate AI capabilities and stay competitive in the evolving market.
Importance of Launching and Communicating Company's Vision
Launching a product or company without effectively communicating its vision and value proposition can lead to a lack of attention and traction. To counter this, it is crucial to lay out the company's vision, goals, and product offerings in a clear and comprehensive manner. It is necessary to continuously tell the world what sets the company apart, why customers should choose it, and how the product addresses their needs. Launching should involve sharing the company's origin story, product features, use cases, and target audience to create awareness and generate interest.
Viewing Competition with Respect and Comprehension
Having a respectful and comprehensive approach towards competition is key. It is essential to acknowledge and respect competitors' success while striving to understand the reasons behind it. Studying competitors' strategies, marketing approaches, and product offerings can provide valuable insights that can help a company differentiate itself and identify areas for improvement. Listening to customers and understanding why they choose competitors over the company is essential for making necessary adjustments and delivering a superior product or service.
Balancing Focus, Hiring, and Funding in Startup Growth
Startup growth requires a careful balance between focus, hiring, and funding. Maintaining a narrow focus on a specific target audience and use case can help channel resources effectively and avoid spreading too thin. Hiring decisions should prioritize quality over quantity, aiming for A-players who can elevate the team and contribute to the company's success. When it comes to funding, it is important to consider whether raising excessive capital and scaling rapidly aligns with the company's goals and market conditions. Disciplined allocation of resources and strategic decision-making are crucial for long-term growth and sustainability.
Des Traynor is a Co-Founder of Intercom, and has built and led many teams within the company, including Product, Marketing, and Customer Support. Today Des leads all Intercom’s R&D efforts, and parts of Intercom’s marketing.
In Today's Episode with Des We Discuss:
1. From Consultancy to Founding a Unicorn:
What was the founding a-ha moment for Des and the team with Intercom?
Why does Des believe that most startup advice is BS and outdated in 5 years?
What does Des know now that he wishes he had known when he started?
2. LLMs: The World is Not Equal:
What does Des mean when he says the world of LLMs is not equal?
How do the different LLMs very in quality, price and speciality?
Does Des agree with Alex @ Nabla, "the best companies in the future will work with many LLMs at the same time and switch between them for different things"?
To what extent does Des believe LLMs will be commoditised and it will be a race to the bottom?
Would Des be a buyer of OpenAI at a $90BN price? Why not?
3. How to Survive in a World of OpenAI:
What two simple questions will determine if Open AI will kill your existing business?
What 3 criteria will determine if there is a new business to be built on top of OpenAI?
What is the different between a thin layer on top of an LLM and a thick wrapper with real value?
Which traditional incumbents are most vulnerable? What should they do in this new world?
How long does it take for incumbents to really be impacted?
4. The Titans of Tech: Who Wins:
Why does Des believe that Apple could be a massive winner in the next wave of AI?
Why does Des believe that Google have not been impressive and failed to keep pace?
Why does Des think OpenAI should be wary of Amazon? What could they do to threaten them?
What opportunity does Facebook have here? How could Instagram and Whatsapp win?
5. Startup and Investing 101:
Why does Des believe that every founder should write a blog post per week?
Why does Des believe that most B2B marketing sucks? What makes great B2B marketing?
What are Des' biggest lessons from the Hopin journey?
How has Des' angel investing changed in the last year with the rise of AI?
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