Generative technology has become increasingly prevalent in today's market, with various layers and applications that contribute to its overall functionality. At the core of this technology are the general AI models, such as GPT-3 for text, DALL-E-2 for images, Whisper for voice, and Stable Diffusion. These models have the capability to produce outputs in broad categories such as text, images, videos, speech, and games.

Kazuki Nakayashiki

Hatched by Kazuki Nakayashiki

Sep 06, 2023

4 min read

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Generative technology has become increasingly prevalent in today's market, with various layers and applications that contribute to its overall functionality. At the core of this technology are the general AI models, such as GPT-3 for text, DALL-E-2 for images, Whisper for voice, and Stable Diffusion. These models have the capability to produce outputs in broad categories such as text, images, videos, speech, and games.

However, specific AI models take this technology even further by capturing more nuance and specialization for specific tasks. These models are trained on more narrow and specialized data, allowing them to generate content such as tweets, ad copy, song lyrics, e-commerce photos, and 3D interior design images. They cater to the specific needs and preferences of individuals or businesses.

In addition to specific AI models, there are hyperlocal AI models that serve as specialists in their respective fields. For example, a hyperlocal AI model can write a scientific article in the style preferred by Nature or create interior design models tailored to a specific person's aesthetic. These models can even write code in the particular style of an individual company. They benefit from proprietary and trusted data, which provides a level of defensibility in the market.

However, relying solely on data for defensibility can be risky. Competitors may not have access to the exact dataset, but they can often find similar data to train their models. Even if their models are not as good as yours, customers may not be able to tell the difference, and competitors can claim to have similar capabilities in their sales materials. Therefore, data network effects tend to plateau over time, and a slight advantage in AI model performance may not be enough to differentiate yourself from the competition.

To explore data network effects more effectively, it is recommended to focus on the hyperlocal layer, where proprietary and trusted data can be leveraged. This layer allows for a more personalized and specialized approach to AI models, creating a unique value proposition for customers.

Another important aspect of generative technology is the API layer or Generative OS, which allows applications to access the necessary AI models. This layer also enables the flexibility to switch out AI models as needed, potentially commodifying them in the process. As the market continues to evolve, it is predicted that there will be a surge in the development of applications and the addition of generative features by both incumbent software providers and new companies.

When it comes to implementing generative technology, there are three key pieces of advice to consider:

  1. Prioritize product speed: It is crucial to get your product in the market as quickly as possible to gather feedback and understand what works and what doesn't. This iterative process allows the AI model to learn and improve over time.

  2. Focus on fundraising speed: Securing funding is essential to fuel the development and growth of your generative technology. Finding investors who are aligned with your vision and willing to move quickly will give you the resources needed to stay ahead of the competition.

  3. Embrace aggressive sales: Aggressive sales strategies can help embed your product in the market and build network effects that contribute to your defensibility. By actively promoting and selling your generative technology, you can gain a competitive advantage and expand into new categories.

In a similar vein, the concept of marginalia has played a significant role in passing on ideas and thoughts across generations. Marginalia refers to the annotations and notes made in the margins of books, often by the original readers themselves. These annotations can spark sympathy, recollections, and even disagreement among subsequent readers.

By engaging with marginalia, readers are able to gain insights into the inner world of the original readers and authors. This intimate view of their thoughts and ideas enriches our understanding of their works and provides a glimpse into the moments of inspiration that shaped their genius. Just as generative technology allows us to step into the minds of AI models, marginalia allows us to step into the minds of historical figures and experience the exact moment a spark of genius hit them.

Furthermore, marginalia serves as a means of participating in the original inspiration for future remarkable works. It allows readers to join the thought processes of the original readers and authors, expanding their own perspectives and ways of thinking.

In conclusion, generative technology has revolutionized various industries, offering a wide range of applications and capabilities. From general AI models to hyperlocal and specific AI models, the technology continues to evolve and provide unique value to businesses and individuals. However, it is important to consider the limitations of data as a defensibility strategy and instead focus on leveraging proprietary and trusted data at the hyperlocal layer.

Additionally, the API layer or Generative OS plays a crucial role in accessing and switching out AI models as needed. By prioritizing product speed, fundraising speed, and aggressive sales, companies can effectively navigate the generative tech market and establish defensibility through network effects.

In a broader context, the concept of marginalia highlights the importance of passing on ideas and thoughts across generations. By engaging with the annotations and notes made by previous readers, we can gain insights into their perspectives and experiences. This intimate connection with the past enriches our understanding of historical works and allows us to participate in the original inspiration for future remarkable achievements.

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