AI has the power to revolutionize the way that we do work. Just like the computers and internet did in the 90’s, AI is going to change the way we interact and use technology. Right now, the space is going through it’s dot com era. The market is incredibly saturated and there is no way that everyone is building a billion-dollar company.
Yet, the space will still succeed tremendously over the long term. I have long said, AI is not going to take over our jobs, it is just going to boost efficiency. One of my favorite quotes I have heard is “Humans with AI will replace humans without AI”.
I am mainly watching the customized GPT space, the companies building tools for mundane tasks, and the ones making it easy to both build and interact with all of the above.
The TLDRs:
As we have seen through the first period of the AI wave, the big players, like Chat GPT and Anthropic, are great at general knowledge. They are built incredibly well and gave many people the idea to create customized or specific GPTs. Ones that were built off a certain LLM and have their own independent knowledge.
One could start to dream about how helpful this could be. A GPT build specifically for Lawyer’s advice, a GPT built specifically for a Doctor to build medical documents, a GPT built specifically for bank analysts building a presentation for a deal.
One that has really stood out to me was Rogo Finance. They have built a custom GPT for the financial analysts on Wall Street to help scope and build out research on individual stocks, sectors, and the overall markets. The founders have experience in the space and have built out an extremely sophisticated LLM.
Another is a GPT that helps lawyers create legal documents. What was once a multiple-hour task can now be done in less than 60 minutes by an associate. This example especially points toward my thesis of efficiency over replacement when it comes to human labor. Nonetheless, there are many tools like these out there that are being built and are going to allow humans to become more efficient with their line of work.
Switching paths, I do want to talk about these smaller GPTs, or “tools”. These particular companies have fundraised and have great valuations when they have really just built a tool. The market for these have a low barrier to entry and often times you can find similar companies doing the same thing. These can be email checkers, calendar optimizers, or even some sales process tools. They are extremely helpful, but only a handful of them will be able to reach a valuation of over 9 figures. These are the companies that should raise once, they should just turn on the cash cow machine. Look toward PDF.ai for this model.
These are also the companies that you see within the GPT library on OpenAI. Think of it like the apple app store (minus the 30% take rate). There will be many companies that start here as a tool and grow into something significant. There will also be studios that build dozens of these apps and make money that way. Nonetheless, I find it very hard to invest in this sector because of the percentage of winners that will likely come out of it.
(Let’s hope I’m wrong because I know a few founders in this space.)
Entrepreneurs have already gone teeth first in the AI industry. They use it to build pitch decks, craft emails, build models and much much more. The technology is very very good at helping builders build and I think several companies will take advantage of this.
Now, this could be existing companies as well. Figma, Adobe, and Canva are prime areas where builders spent time building. These companies need to dig into AI and bring this technology to the forefront for their users. This is also a great way for new users to get introduced into AI. Most people who are using these legacy products may not be very accustom to AI yet. And using AI to your benefit can be a challenge to say the least, most people have to learn exactly how to built the right prompts (thats why prompt engineers are literally a job). So for these companies, not only can they help bring more of the population into AI, they can also help the company overall.