10 AI Business Ideas From The Queen of AI ft. Sarah Guo
24 Jul 2024 (2 months ago)
Intro
- Sarah Guo, a venture capitalist with a $100 million fund focused on AI startups, discusses the difference between "lifestyle businesses" that generate a million dollars in revenue and businesses with the potential to scale to a billion dollars.
- She draws an analogy to the rise of dropshipping, where entrepreneurs leveraged platforms like Alibaba and AliExpress to sell products without needing to manufacture or store them.
- Guo argues that AI models, particularly those from OpenAI, are becoming the new "magic" that allows entrepreneurs to create products like videos or songs without needing deep AI expertise. She cites examples like copywriting tools (Copy AI and Jasper) and AI companionship apps, where individuals are generating significant revenue by leveraging these AI capabilities.
IDEA: AI companions
- AI companions are a growing market with significant revenue potential. Companies like Replica, which offers digital boyfriends and girlfriends, are generating millions of dollars in revenue. Character AI, another popular platform, boasts over 300 million monthly unique visitors, demonstrating the high level of engagement users have with these AI companions.
- The engagement with AI companions is comparable to popular social media platforms. People spend hours interacting with these AI companions, highlighting the potential for monetization through various avenues like in-app purchases, subscriptions, or advertising.
- The novelty and unique capabilities of AI companions drive word-of-mouth marketing. Users are eager to share their experiences with these AI companions, leading to organic growth and virality. This is evident in companies like Haen, which offers AI-generated video avatars, and has seen rapid growth and revenue generation without significant marketing spend.
IDEA: AI interior design / professional headshots
- AI-powered visual content creation is a promising area for e-commerce businesses. This includes generating product videos, interior design renderings, and even professional headshots. The technology can significantly reduce costs compared to traditional methods, making it a compelling value proposition for customers.
- The example of AI-generated headshots highlights the potential for rapid revenue growth. A successful business model could involve using Facebook ads to acquire customers at a low cost and offering high-quality AI-generated headshots for a premium price. This approach could generate significant profits in a short period.
- Distribution and marketing expertise are crucial for success in this space. The example of Jasper, an AI-powered marketing tool, demonstrates the importance of understanding internet marketing funnels and optimizing paid advertising campaigns. While AI technology is essential, strong marketing skills can be the key to scaling a business rapidly.
IDEA: A richer version of The Sims
- Sarah Guo suggests that a richer version of The Sims, powered by AI, could be a very successful business. She envisions a game where characters are more intelligent, have richer interactions, and possess realistic video and voice capabilities. This would create a more engaging and immersive experience for players.
- Guo believes that the potential for this type of game to scale is significant, citing The Sims' lifetime sales of 5 billion dollars as evidence. She argues that AI could make the game even more engaging and sticky, leading to even greater success.
- Guo acknowledges that she is motivated by working with entrepreneurs she admires and respects, and that she prefers to focus on building new businesses rather than investing in existing ones.
The speedy way to do this if you're non-technical
- Sarah Guo, the "Queen of AI," believes that finding a technical partner is the fastest way for non-technical individuals to get involved in AI projects.
- She suggests partnering with an engineer who is passionate about AI but lacks a clear vision or business acumen.
- This partnership allows the non-technical individual to contribute their ideas and marketing expertise while the engineer focuses on building the product.
IDEA: Your Personal Seller
- The "Your Personal Seller" AI concept aims to automate the process of selling products online. This would involve tasks like creating store listings, managing prices, writing product descriptions, and running marketing campaigns.
- The idea is that AI could handle these tasks, freeing up entrepreneurs to focus on product development and design. This is particularly relevant for businesses with a large number of SKUs (stock keeping units), where manual management becomes overwhelming.
- The text highlights the current challenges of managing an e-commerce store, including the high cost of software and the need for multiple employees to handle various tasks. The speaker suggests that AI could significantly reduce these costs and streamline operations, making online selling more accessible and efficient.
IDEA: Generative Voice API for service providers, SMBs, restaurants
- The future of business will involve AI-powered agents that can handle tasks like answering phones and qualifying leads. This is similar to how every business now needs a website.
- The voice automation market is ripe for innovation. There is a huge opportunity for businesses to create AI-powered voice agents that can interact with customers in a natural and engaging way.
- This technology can be used by a wide range of businesses, including restaurants, HVAC companies, and dental offices. It can be used for informational purposes, lead generation, and even initial sales calls.
IDEA: Next Gen Auto-Fill
- Next-Gen Auto-Complete is a business idea that leverages AI to personalize writing. This idea involves creating a browser extension that goes beyond traditional auto-complete by learning a user's writing style and voice. It would then assist users in writing emails, blog posts, and other content in a way that reflects their unique writing style.
- This technology addresses a common frustration for many writers. Many people find that AI-generated content, while helpful, often lacks the personal touch and specific tone they desire. This idea aims to bridge the gap by allowing users to maintain their unique voice while still benefiting from AI assistance.
- The potential for this technology is significant. It could revolutionize the way people write, making it easier and faster to create high-quality content that reflects their individual style. This could be particularly valuable for professionals who need to communicate effectively in writing.
Software 3.0--what's coming
- The term "Software 3.0" originates from an essay by Andre Karpathy, who described "Software 2.0" as the shift from hand-coded software to machine learning models trained on labeled data.
- Software 3.0 represents the next evolution, where software primarily involves manipulating "Foundation Models" - pre-trained AI models with broad capabilities. These models require minimal training from scratch, needing only specific guidance and data relevant to a particular business.
- An example of Software 3.0 is a voice agent for lead capture, where the underlying AI model is already trained, and the developer only needs to integrate it with existing systems and provide specific business information. This approach leverages the extensive work done by AI research labs and focuses on tailoring these models to real-world applications.
Boring verticals fertile for AI: Legal and medical
- Sarah Guo, an investor in AI, believes that "boring" industries like healthcare and legal are ripe for disruption by AI. She initially thought these industries were too slow and complex for AI to make a significant impact.
- However, she has changed her mind, recognizing that the repetitive and manual tasks in these industries, such as billing, coding, and claims processing, are ideal for automation by AI.
- Guo cites her recent experience at a pediatrician's office where a "scribe" was using an iPad to take notes during a consultation as an example of how AI can be used to streamline processes in healthcare.
Ask: What's already being outsourced?
- Outsourced tasks can be a good indicator of potential AI applications. Sarah Guo suggests that we look at tasks that have already been outsourced as a starting point for identifying potential AI applications. She uses the example of medical scribes, who were initially hired to take notes for doctors, freeing up the doctors to see more patients. This task was then outsourced to cheaper labor in other countries. Now, AI is poised to take over this task, further automating the process.
- AI will likely replace tasks rather than entire jobs. Sam Altman, CEO of OpenAI, has stated that AI will take over tasks rather than entire jobs. This means that jobs will likely evolve to include a different set of tasks, with some tasks being automated by AI.
- Investing in AI is not the only focus for Sarah Guo. While Sarah Guo is a strong believer in AI and its potential, she is also a technology investor who is interested in investing in great tech companies, regardless of whether they are AI-related. She believes in investing in companies that have the potential to be successful and make a positive impact.
Ripe for disruption: energy storage, chips
- Sarah Guo believes that the shift from non-AI to AI workloads will have a significant impact on the data center landscape, requiring a complete rethinking of system design, including chips, memory bandwidth, networking, energy storage, and cooling systems.
- She argues that this shift presents a massive opportunity for new specialized solutions, potentially worth trillions of dollars, and not just a direct attack on Nvidia's dominance in the chip market.
- Guo suggests that companies could focus on addressing other bottlenecks in the data center, such as memory bandwidth and energy storage, by designing specialized solutions specifically for AI workloads. She also highlights the need for innovative cooling systems to handle the increased heat generated by AI workloads.
“Ai's $600B Question”
- The conversation revolves around the potential impact of AI and the massive investments being made in the field. The speaker references a blog post or article that highlights the significant amount of capital being poured into AI development, questioning the potential return on investment.
- Sarah Guo, the "Queen of AI," acknowledges the validity of the question about the return on investment but expresses optimism about the potential value AI will generate. She draws a comparison to the broadband buildout, highlighting the long-term benefits despite the initial high investment.
- The conversation then shifts to the potential downsides of AI, with the speaker expressing concern about the widening gap between the "haves" and "have-nots" in society. They believe that AI could exacerbate existing inequalities, potentially leading to a scenario where those with access to resources and capital benefit disproportionately.
- Sarah Guo counters this perspective, arguing that individuals have agency in the AI revolution and can leverage its potential to create wealth and opportunities. She emphasizes that the ability to capitalize on AI is not solely dependent on existing resources but also on individual initiative and entrepreneurial spirit.
Sarah Reacts: Doomsday scenarios in Ai
- Sarah Guo, an expert in AI, believes that while the potential for AI to be misused is real, she is more concerned about the immediate and tangible threats of AI abuse, such as the creation of deepfakes and the spread of misinformation.
- She acknowledges that the "Doom scenario" of AI becoming uncontrollably powerful and dangerous is a valid concern, but she finds it difficult to envision a clear path from current AI capabilities to such a scenario.
- Guo emphasizes the potential benefits of AI, particularly in fields like healthcare, education, and government, where it can significantly improve efficiency and accessibility. She believes that focusing on the positive applications of AI and mitigating its potential harms is more productive than dwelling on hypothetical doomsday scenarios.
If you're 22, hungry and optimistic, go west
- The speaker, Sam, describes the vibrant tech scene in San Francisco, particularly during the early 2010s, when mobile apps and the sharing economy were booming. He recounts attending hackathons and witnessing the excitement surrounding new ideas and technologies.
- He emphasizes the importance of community and collaboration in fostering innovation, highlighting the role of San Francisco in bringing together ambitious individuals who are passionate about pushing the boundaries of AI. He mentions his own experience with a grant program called "embed.conviction.com" that aims to create a supportive community for AI entrepreneurs.
- Sam concludes by encouraging young, ambitious individuals to move to San Francisco, emphasizing the city's unique energy and the opportunities it offers for those seeking to make their mark in the AI industry. He playfully acknowledges the city's reputation for being "dangerous, dirty, and lawless," suggesting that this adds to its appeal and provides a sense of accomplishment for those who succeed there.