Generative AI Wrapper Companies
Most generative AI demos, business ideas, and startups today are simple wrappers around a Large Language Model API. They tackle a simple business problem in 1 niche area. At some point, one can see the product becoming wiped out when an incumbent simply includes it as a feature.
Andrew Ng points out this is what happened to the flashlight app that used to cost $1.99 on the iPhone App Store.
Still, that’s not necessarily a reason to hold off on building something if there’s an inherent joy in building for the sake of building.
Plus, getting started can be a tremendous accomplishment regardless. Serious companies and startups may still end up pivoting to solving a real-world problem - hint: pivot to B2B from consumer is the typical path to go. It’s rare to see a B2B company pivot to consumer, since consumers are typically more fickle.
What then is worth building?
I’d argue it’s meaningful technology. This is technology that improves lives and helps further humankind. Technology that gives people hope.
Think railroads, electricity, printing presses, and so on. These are the things that have fundamentally changed society as we know it. They provide step function improvements to our lives.
These are venture-viable businesses - or rather, they need an incredible amount of funding to accelerate the future to the present day. Without venture-backing, one would expect slow progress and adoption.
Sometimes I see Silicon Valley hype telling a misleading story: get a cool business idea, get some customers, then raise a bunch of funding, and get reported on in the press. Silicon Valley ends up attracting egomaniacs, narcissists, and get-rich-quick crowds. It becomes harder to sift through sand and find the gems, even though there may be a higher concentration of gems self-selecting to live in this area.
These gems will build meaningful technology. Not all will succeed. But this is why venture capital is critical for ensuring a better future. It at least gives these meaningful technology ventures a fighting chance.
