This Week in Startups
VenturusAI's instant MBA & Samantha Wong on identifying soon-to-explode startup markets | E1778
Fri Jul 14 2023Description
This episode covers various topics including JPT's evolution, AI in product building, optimizing language models, role prompting for business analysis, marketing strategies, user feedback and growth, financial considerations and investment opportunities, investing in Australia and New Zealand, ecosystem development and global opportunities, global investing and ASX valuations, and ASX listings and IPO requirements.
Insights
AI in Product Building
JPT has evolved over time, with each version improving upon the previous ones. The potential of AI in building entire products depends on how it is utilized. Emmanuel Cuccio discusses his tool for entrepreneurs that allows them to generate content and validate ideas before working on the actual product.
Optimizing Language Models
The company uses both Chat GPT 3.5 and 4 to optimize cost while achieving good results. They have managed to reduce the cost per analysis from around a dollar initially. A new model called Claude offers improvements over GPT. There is a concern that as AI models improve, startups building wrappers around them may become obsolete.
Role Prompting and Business Analysis
GPT agents allow you to instruct GPT based on different roles. Role prompting enables business analysis using frameworks and case studies. My Journey is an example of a company that designs images using prompts and copyright material. A school for training venture capitalists with a unique business idea has limited competition in the market.
Marketing Strategies and User Feedback
Unique business ideas with limited competition have the potential to establish strong industry partnerships. Recommended marketing platforms are game-changing. Reddit is used as a platform for feedback and direct criticism. Interesting feedback has been received from the entrepreneurship subreddit.
Financial Considerations and Investment Opportunities
Feeding as much information as possible to the prompt helps in building accurate financial stats. The minimum amount needed to build a track is $237,000. Language models are well-suited for consulting and generating ideas quickly. An angel investor offers $100,000 and support for promoting the startup. Due diligence will be conducted before finalizing the investment deal.
Investing in Australia and New Zealand
Australian and Kiwi companies have built enterprise value of over 126 billion in the last 20 years. Investing in Australia and New Zealand is considered anti-consensus investing. Blackbird Ventures has had success by finding pockets with fewer competitors. Being early in a market can lead to capturing significant performance.
Ecosystem Development and Global Opportunities
Being early in the Australian market from 2013 to 2015 was ideal, with a lack of capital and low entry valuations. Blackbird Fund One had a low loss ratio of 20%, suggesting the luxury of choice in picking investments. Lighthouse companies are important for ecosystem development, attracting founders and mentoring.
Global Investing and ASX Valuations
Google Wave was a predecessor to Google Docs and made products like Canva possible. R&D centers for tech companies are interesting places to find startups. The investor has a bias for Australian and New Zealand founders with big ambitions and global markets. The portfolio consists of software investments and deep tech investments.
ASX Listings and IPO Requirements
The ASX is not the right place for Canva to list. Some companies may benefit from listing on the ASX due to a bigger profile or being earlier in their trajectory. To have an IPO on the ASX, companies generally need over 300 million in revenue.
Chapters
- JPT and AI in Product Building
- Optimizing Language Models and New Solutions
- Role Prompting and Business Analysis
- Marketing, Feedback, and User Growth
- User Feedback, Pricing, and Potential Customers
- Financial Considerations and Investment Opportunities
- Investing in Australia and New Zealand
- Ecosystem Development and Global Opportunities
- Global Investing and ASX Valuations
- ASX Listings and IPO Requirements
JPT and AI in Product Building
00:00 - 07:31
- JPT has undergone changes over time, with each version improving upon the previous ones.
- The potential of AI in building entire products is dependent on how it is utilized.
- Emmanuel Cuccio, the creator of a tool for entrepreneurs, discusses his idea and its benefits.
- The tool allows entrepreneurs to generate content and validate ideas before working on the actual product.
- Prompt sites provide instruction sets for chat JPT and can be used for prompt engineering.
- Prompt engineering involves creating prompts that analyze various aspects of a business, such as strengths, weaknesses, opportunities, and threats (SWOT).
- Emmanuel spent around 2550 hours on prompt engineering using different frameworks from business school.
- He experimented with prompts to improve the output of chat JPT and utilized LLMs' training on books to enhance prompt generation.
- Financial projections and understanding initial expenses are important considerations when validating an idea.
Optimizing Language Models and New Solutions
07:07 - 14:19
- Before validating an idea, it is important to have financial projections and understand the initial investment required.
- The company uses both Chat GPT 3.5 and 4 for their language model.
- They use both versions to optimize on cost while still achieving good results.
- Initially, the cost was around a dollar per analysis, but they have managed to reduce it further.
- A new model called Claude has been released by Robics, which seems to offer some improvements over GPT.
- The company believes that verticalized solutions with additional features will be preferred over using GPT directly.
- There is a concern that as AI models improve, startups building wrappers around them may become obsolete.
Role Prompting and Business Analysis
13:59 - 20:40
- All these changes throughout time now and we can see how better it is.
- If you're smart enough, you can build an AI to build an entire product for you.
- GPT agents are pieces of software that allow you to instruct GPT based on different roles.
- Role prompting allows you to analyze business works using frameworks and case studies.
- Companies like My Journey may be able to explain how they design images using prompts and copyright material.
- A school for training venture capitalists with a unique business idea has limited competition in the market.
- The tailored training program can address specific skill gaps in the industry.
Marketing, Feedback, and User Growth
20:12 - 27:08
- Unique business idea with limited competition in the market
- Tailored training program can address specific skill gaps in the industry
- Potential to establish strong industry partnerships for internships and job placement
- Recommended marketing platforms game changing
- Books to guide you along the way: Venture deals by Brad Feld, The Lean Startup by Eric Reese, and Angel by the speaker
- Building a standard report with book recommendations based on prompts
- Using Reddit as a platform for feedback and getting direct criticism
- Interesting feedback received from the entrepreneurship subreddit
User Feedback, Pricing, and Potential Customers
26:53 - 33:50
- Received interesting feedback on business ideas from a subreddit dedicated to testing and feedback
- Unexpected feedback helped improve the product and expose more people to business knowledge
- Started with 20 signups a day, reached 30 signups a day for 2 weeks, then gained 500 signups in a day after social media exposure
- Opened Twitter and other channels to gather user opinions and feedback
- Explored various subreddits related to entrepreneurship and business ideas, faced challenges with posting but eventually collaborated with moderators
- Offered two pricing plans - subscription-based and pay-as-you-go for advanced features
- Advanced version allows users to generate reports, ask questions, provide feedback, and explore further prompts
- Potential for corporate customers paying higher fees
- No big customers yet, unable to disclose any company names without explicit permission
- Public reports are generated for individuals as free samples before committing to paid services
Financial Considerations and Investment Opportunities
33:37 - 40:03
- Opening a cutting requires an estimated amount of $237,000.
- The cost depends on various criteria such as facilities setup and construction.
- Feeding as much information as possible to the prompt helps in building accurate financial stats.
- The minimum amount needed to build a track is $237,000.
- Language models are well-suited for tasks like consulting and generating ideas quickly.
- An angel investor offers $100,000 and support for promoting the startup.
- The accelerator program will be discussed with Jackie Degan and Andre.
- Due diligence will be conducted before finalizing the investment deal.
- The launch accelerator is currently virtual but will eventually have in-person sessions in San Mateo.
- The investor wants to be the first fund in and own 10% of the company.
- If it's not a fit, backing out is possible, but this is considered a significant bet by the investor.
Investing in Australia and New Zealand
39:45 - 46:45
- Australian and Kiwi companies have built enterprise value of over 126 billion in the last 20 years.
- Investing in Australia and New Zealand is anti-consensus investing.
- Too much competition impacts returns in the venture capital industry.
- Blackbird Ventures has had success by finding pockets with fewer competitors.
- Blackbird Ventures has invested in companies like Canva, Zooks, Cultureamp, and Safety Culture.
- Being early in a market can lead to capturing significant performance.
- An under supply of capital is an indicator of being at the right point of time.
Ecosystem Development and Global Opportunities
46:22 - 53:44
- Being early in the Australian market from 2013 to 2015 was ideal, with a lack of capital and low entry valuations.
- Blackbird Fund One had a low loss ratio of 20%, suggesting the luxury of choice in picking investments.
- Lighthouse companies are important for ecosystem development, attracting founders and mentoring.
- Australia has a density of entrepreneurial talent with a high percentage of small businesses and educated individuals.
- Global tech companies have R&D centers worldwide, presenting opportunities for collaboration and innovation.
Global Investing and ASX Valuations
53:25 - 1:00:48
- Google Wave was a predecessor to Google Docs and pioneered in-browser collaboration, making products like Canva possible.
- R&D centers for tech companies are interesting places to find startups.
- The investor has a bias for Australian and New Zealand founders with big ambitions and global markets.
- The portfolio consists of 60-70% software investments and 30-40% deep tech investments.
- The global bias has been a blind spot, causing missed opportunities like not investing in Afterpay.
- Selling to US consumers depends on the sector, but most companies sell globally from the beginning.
- Enterprise sales can be challenging, requiring founders to move and establish connections.
- Global investors find it easy to invest in Australian and New Zealand companies due to language and cultural similarities.
- American investors are increasingly interested in investing in Australian companies at later stages.
- The ASX has high valuations for tech companies due to limited supply and high demand from investors.
ASX Listings and IPO Requirements
1:00:24 - 1:00:59
- The ASX is not the right place for Canva to list.
- Some companies may benefit from listing on the ASX due to a bigger profile or being earlier in their trajectory.
- To have an IPO on the ASX, companies generally need over 300 million in revenue.
- Sam did a great job.