#42 Angelinvesting.it - From idea to Series A - Weekly Newsletter

Mosquito traps

Do you know those mosquito traps that attract insects with a violet light and then exterminate them one by one as soon as they get close? The latest announcements from OpenAI regarding ChatGPT updates have reminded me of that same efficiency in killing.

The victims? A multitude of Startups that fall under the definition of ChatGPT wrappers. Immediately after the release of ChatGPT, initiatives multiplied that rely on ChatGPT's APIs to offer artificial intelligence services.

A classic example of these wrapper startups are projects that allowed consumers to obtain information from PDFs or other forms of internal documents within an organization. Unfortunately, I have seen too many variations on this theme in recent months.

However, this week, ChatGPT has started to release new features such as document upload for querying and other native functionalities, cutting the legs off myriad projects.

This event generates two reflections for me. First of all, emotionally, I feel a natural sympathy for these entrepreneurs who are now without a business. In general, I wonder what the way is for startups to seize the opportunity created by the change that mainstream AI is generating.

I ponder a lot around this question with few insights worthy of being reported. The only thing my gut suggests to me is that the playbook for SaaS or marketplace startups that we have seen in the last decade is perhaps no longer up to date.

2 Resources to pro

Benedict Evans brillant essay on the subject (link)

Buldling or unbundling AI poducts, this is the question!

ChatGPT and LLMs can do anything (or look like they can), so what can you do with them? How do you know? Do we move to chat bots as a magical general-purpose interface, or do we unbundle them back into single-purpose software? What are the products?

AI - The third epoch of computing? (link)

What to build in a world of near to zero marginal cost of creation?

I really think that we could be entering a third epoch of computing. The microchip brought the marginal cost of compute to 0. The internet brought the marginal cost of distribution to 0. These large models actually bring the marginal cost of creation to 0. When those previous epochs happened, you had no idea what new companies were going to be created. Nobody predicted Amazon. Nobody predicted Yahoo. We should all get ready for a new wave of iconic companies.
—Martin Casado, a16z

1 Reason to be happy

If you didn’t build a ChatGPT wrapper, a great reason to be happy today!

Have a great weekend,

Simone

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