Generative AI: The Next Consumer Platform and the Market Curve

Generative AI: The Next Consumer Platform and the Market Curve

The advancement of artificial intelligence (AI) has brought about a myriad of possibilities and opportunities across various industries. One of the most exciting aspects of AI is its ability to personalize the user experience, and this has already been evident in edtech and search applications.

In the field of education, AI has been used to tailor explanations based on the user's age and knowledge level. For example, when explaining why it rains, the language used would be different for an eight-year-old compared to a high school student. This personalization engages the individual and enhances their learning experience.

Similarly, in the search industry, companies like Consensus have developed AI-powered tools that search across research papers to provide evidence-backed answers. This not only saves time but also ensures that the information is credible and reliable. Another example is Perplexity's Bird SQL product, which targets the Twitter graph to identify the most popular tweets about specific topics, such as the Golden Globes fashion.

Beyond edtech and search, there is significant potential for AI in enterprise-oriented applications, particularly in internal search. Products like Glean enable teams to search across multiple apps, streamlining workflow and improving productivity. Vowel, on the other hand, allows users to query records of their video meetings, making it easier to retrieve important information discussed during those meetings.

The trade-off between effectiveness and scale has long been a challenge in the field of edtech. It is difficult to create personalized learning experiences that work for the masses without incurring high costs. However, AI has the potential to bridge this gap by augmenting or even sparking human relationships. Tools like Millie and YourMove optimize dating app profiles and messages, helping users make meaningful connections. Apps like Mumkin assist users in navigating difficult conversations, ensuring that they communicate effectively and empathetically.

In the future, we may even have AI chatbots that remind us when it's time to check in with friends and family, prompting us with the perfect message to send. This personalized touch could greatly enhance our relationships and help us stay connected in a busy world.

AI-powered "digital twins" are also becoming a reality, with some individuals already exploring this concept. These digital twins are trained on all of our writing and, eventually, speech. They can assist us in various tasks, from generating content to providing suggestions and insights. Companies like Descript and RunwayML are expanding from generative video editing to creation, while others like Boomy and Riffusion are creating music from scratch. These tools not only save time and effort but also open up new possibilities for creativity.

The gaming industry is another sector that has seen the potential of generative AI. Developers need to generate thousands of media assets, from graphics to 3D models to soundtracks. AI tools like Scenario and Iliad can create game assets, while platforms like Promethean can build entire virtual worlds. Even non-player characters (NPCs) can be generated using products like Inworld, Charisma, and Convai. These advancements in generative AI have the potential to revolutionize the gaming industry and enhance the gaming experience for players.

Generative AI also holds great potential for small businesses. With millions of small businesses in the U.S. alone, tools that automate tasks and streamline workflows can greatly benefit these entrepreneurs. Products like Harvey and Spellbook help legal teams automate tasks such as intake, research, and document drafting, saving time and increasing efficiency.

Ecommerce is another sector that can benefit greatly from generative AI. Many online businesses can easily integrate AI tools into their workflow, improving various aspects of their operations. From inventory management to customer service, AI can provide valuable insights and automate repetitive tasks, allowing businesses to focus on growth and expansion.

When considering the market for an early-stage startup, the market curve becomes crucial. Understanding where your product or service falls on the curve informs your sales strategy. If you have a niche market with a smaller number of high-value customers, you can allocate more resources to sales, implementation, and customer success to ensure customer satisfaction. On the other hand, if you are targeting mass-scale consumer apps, your primary focus should be on the potential size of the market. This will help determine your monetization strategy, whether it's through ads or optional subscriptions.

In conclusion, generative AI is poised to become the next consumer platform, offering personalized experiences and enhancing various industries. From edtech to search, enterprise applications, dating apps, and even gaming, AI is transforming the way we interact with technology. Small businesses and ecommerce platforms can also benefit greatly from AI tools that automate tasks and streamline processes. However, it is essential to understand the market curve and tailor sales strategies accordingly. By leveraging the power of generative AI and understanding market dynamics, businesses can unlock new opportunities for growth and success.

Actionable Advice:

• 1. Understand your target market: Research and identify the specific needs and pain points of your target customers. This will help you develop AI-powered solutions that truly address their challenges and provide value.

• 2. Test and iterate: As with any new technology, it's important to test and iterate your AI solutions. Gather feedback from early users and make improvements based on their insights. This iterative approach will help you refine your product and ensure its effectiveness.

• 3. Prioritize customer experience: While AI can automate tasks and improve efficiency, never lose sight of the importance of the customer experience. Ensure that your AI-powered solutions enhance the user experience and provide a personalized touch. This will help build customer loyalty and drive long-term success.