Category: Artificial Intelligence

What happens when we fast-forward a few years and think about the rapid advancements in artificial intelligence (AI)? That’s the question that sparked an invigorating conversation between my fellow founder friends Adam Spector, Eric Bahn, and myself.

The tl;dr? Few jobs are safe and what made you successful before will not make you successful in the future. In the long run, humans will adapt and will create other jobs, but I’m worried the transition period will be brutal and that is just around the corner.

The AI Takeover: No ones jobs are safe

For years, the conversation around AI’s impact on jobs has largely focused on automation replacing blue-collar workers. But in reality, technology is coming just as hard for white-collar professions. It’s coming for everyone. We’re already seeing so many legal, financial-related, marketing, sales, operations, developer, and design focused AI tools that can do a lot and can take over a lot of workflow. (Note: my AI writing tool overlords are biased in writing this post as well. :) )

AI can and will have the ability to analyze, generate, and execute at a scale humans can’t match. If your job involves anything operational, analytical, factual, etc, AI can do it better.

At Hustle Fund and in my personal life, for example, AI is already embedded in our workflow. Off-the-shelf tools help us with everything from writing, emailing, marketing, research, portfolio operations, and more. We even use AI to make investment recommendations (note: this is still very much in training mode). And we are just scratching the surface.

I don’t think most people fully realize just how much AI is going to take over their jobs, in part, because right now, these tools probably only absorb 25-50% of the work currently. A human is still in the loop. So it feels like people are still needed — AI doesn’t feel that significant. But that’s 25-50% of the work that I used to do myself that I no longer do. So as that becomes a higher percentage overtime, it means that you will only need 1 person to do a handful of people’s jobs. This is going to hit people all at once.

This doesn’t mean humans will be completely out of a job. There will still be a need for oversight, whether it’s to fact-check AI-generated legal documents, ensure compliance in financial decisions, or safeguard against AI hallucinations. A lot of jobs will still require a human-in-the-loop. But the number of people required to complete so many projects will shrink dramatically.

Fewer Workers, More AI

Entire business functions that once required large teams will soon be streamlined with AI. Take operations and marketing, for example. Many companies already use AI-powered tools for content creation, customer engagement, outbound sales, and ad generation and targeting. These tools are only going to get better, reducing the need for many people. Agencies, which have long been powered by people, will need to adopt these tools aggressively to stay alive.

In engineering, AI is transforming how software gets built. Tools like Cursor got to $100m+ ARR just in the first few months! And there are many other tools now that enable non-technical users to develop apps with minimal to no coding knowledge. Fewer engineers will be needed to build most applications – except for those working on groundbreaking technology. This will both expand the market for developing software as well as shrink the number of people needed for projects.

Even design and creative fields aren’t immune. AI is already generating static images, videos, and even presentation designs. While designers will still play a role in reviewing and refining AI-generated work, the long hours they previously put into creating won’t be needed.

Here’s a teaser (stay tuned for the launch) of my upcoming comic book that I did myself with zero talent in my spare time. I can only imagine all the new Disney-challenger brands that can be built with small teams of people with artistic talent.

The Industries That Will Survive (For Now)

While AI will dominate many sectors, there are still areas where humans will continue to excel —at least in the short term.

1. Regulated Professions – AI can assist with diagnosis, documentation, billing codes, collections, and communications in medicine. But due to regulations, they will continue to require major human oversight – doctors, nurses, etc will still be very needed.
2. Human-Centric Jobs – The ability to persuade, lead, and emotionally connect with people is still a human advantage right now. Sales, leadership, and high-level strategy roles will continue to be valuable. But, ChatGPT is quite good at coming up with jokes to make me seem funnier than I actually am to impress my colleagues, so I may be fired at Hustle Fund soon.
3. Creative and Entrepreneurial Work – While AI can generate art, music, and writing, true originality and vision remain human traits. Those who can blend creativity with AI-powered tools will thrive. Also, all the generative AI tools are very bad at drawing hippocorns. This will need improvement. Humans FTW.
4. Energy and Infrastructure – AI requires massive computing power, and computing power depends on energy. This brings us to the next big shift: the return of energy dominance.
5. Distribution – Everyone will be forced to build a brand; when software becomes a commodity, those with large reach will win regardless of the field.

The Next Power Struggle: Energy

In the past, oil and energy ruled the world. Then came the software era, where companies like Google, Facebook, and Microsoft held the most power. Tech, for years now, has dominated the list of most valuable companies in the world. But now, as AI commoditizes the software world, the power is shifting back. The new kings and queens of industry will be those who control compute power and energy. If you believe AI will be everywhere, then the real question becomes who owns the compute power? Running AI models at scale requires vast amounts of energy. I do think the efficiency will get better, but we’ve barely scratched the surface on what AI models we want to run and where.

We will find new ways to use significantly more energy in the future than right now. For example, you can imagine wanting to build a holodeck of our memories or create virtual people who feel like live people, whom we want to talk to or consult. To build these systems, you could imagine we’d need a TON of data — more than we have now. This is where Justin Kan’s original vision for Justin.tv fits perfectly. Imagine recording your whole life in a multi-dimension video? You could record, query, and relive any moment. Moreover, other people could experience or interact with other people’s moments, knowledge, and thoughts. We would all be able to learn directly from the top teachers in the world. We would all be able to “meet” celebrities. Right now, there are websites where people can “meet” a digital celebrity or influencer through a chatbot. Fast forward, those chatbots will be much more “real” and sophisticated and can even act as digital virtual assistants to handle a lot of work for each person. These bots will be able to triage through so many more opportunities than busy famous people can handle today, which means that needing a warm introduction will become less important (or not important at all). The only reason warm introductions exist today is that famous people get bombarded with thousands of opportunities daily and cannot possibly go through them all. But that’s a problem that goes away with better digital triaging.

The cost to do this today would be tremendous and not feasible. But all of this is possible to do if you had unlimited compute power. And that’s pretty exciting for the world. Knowledge, access to people, will all be much more accessible and will level the playing field in many ways. Knowledge and connections will become much more commoditized in the future.

The future

Given the confluence of all of this, it’s both an exciting and worrisome time. On one hand, AI will be able to bring so much more to everyone — more knowledge and more access. On the other hand, in the short run, so many people will be out of a job. And that makes me worried.

Sometimes people ask me what would I have my kids study in this new world? I don’t have a great answer to that, but I can tell you that the jobs most people recommended to children during my youth – largely analytical jobs – are not the ones I would recommend. Given the next several years and decades will be very tumultuous, I think the best way that kids can prepare themselves for the future is to be entrepreneurial, creative, and be great with people. And it helps tremendously to build a brand. There’ll be a lot of change that people will need to constantly adapt to — it will be a tough time. And, like everything else, things – such as AI – start slowly and then hit you with a barrage and that barrage is coming.

If you haven’t already read Packy McCormick’s blog post this morning on Attention is All You Need, I highly recommend it.

He always writes with incredible insight, but today’s post is especially important as we think about technology in the next several years and decades to come. Of course, you guessed it – his post is about OpenAI. I want to build on that post and suggest some thoughts on where the best places to build are in light of where OpenAI is positioning itself in the market.

Some context

A few months ago, we saw the launch and rise of ChatGPT, a personal assistant that allows users to ask questions and make requests. ChatGPT is the first product ever to reach 100m users in just a couple of months, an incredible feat that surprised just about everyone. Then, last week, we saw the launch of ChatGPT plugins. With the launch of plugins, users will be able to extend ChatGPT’s capabilities to be able to take actions available across other websites within the ChatGPT interface. 

For example, in the future, within ChatGPT, I ought to be able to ask ChatGPT to: 

• Text all my Facebook friends a fun made-up song on their respective birthdays
• Search Kayak for the cheapest premium economy flights to London from San Francisco that serves Haagen Dazs ice cream mid-flight
• Write a script for me that will re-organize my email inbox, prioritizing my founders first

Months ago, I think we saw all of this functionality coming down the pipe.  But up until recently, I wouldn’t have thought that OpenAI themselves would develop a consumer-facing product to tackle all of this functionality. Like many others, I thought that OpenAI would continue extending their platform to more and more startups and developers to build on top of their technology.

What does this mean for developers?

The crux of the matter is that OpenAI is currently running two strategies right now – a platform strategy and a consumer strategy. 

Examples of the platform strategy include Apple and Zapier. Without developers, Zapier would cease to exist and Apple would be largely useless without any apps on their devices. Although both have created “example apps”, neither company really attempts to build their own consumer-facing applications that compete with their partners’ products. 

Examples of the consumer strategy are companies like Facebook and Twitter. You go to those sites and you generally stay on those sites, scrolling through all their content. And, although both started out with developer platform programs, at this point, both largely have just built all the functionality on their sites.

No site can be perfectly labeled a platform strategy or a consumer strategy. E.g One could argue that Apple created Numbers, which is a consumer-facing application, but let’s be real, who uses Numbers? :) 

And in fact, running both a platform and a consumer strategy simultaneously is challenging. As Packy mentions in his post:

“All of that is if OpenAI decides to play nice with its partners. If OpenAI optimizes for its ChatGPT users, though, it’s going to disintermediate a ton of businesses and force them into changing how they operate.“

In fact, an example of a company that struggles with trying to run both a platform strategy and consumer strategy is Amazon. 

Amazon started out as a platform for e-commerce stores to build on top of. I have friends who run online stores who initially hopped on Amazon and reaped the benefits of their logistics support, distribution reach, among many other helpful features. 

But you may have noticed that Amazon also now sells their own end products – everything from shoes to paper shredders. And their products are GREAT. One of my friends who runs an online store found that at first, it was hugely beneficial to her business to be on Amazon, but eventually, Amazon came out with an identical clone of her products, utilizing all the data from their Amazon presence to know that she was making bank, and Amazon wanted a piece of that action. 

Needless to say, my friend knew she wouldn’t win on Amazon, so she left their platform. And her store continues to grow and thrive as an independent site. In many ways, Shopify exists as the platform strategy in this space to challenge the power of Amazon and provide an alternative for e-commerce stores as Amazon adopts more and more of a consumer-facing strategy.

This brings us back to OpenAI – if there’s even an outside chance developers think OpenAI will copy them and integrate their functionality into ChatGPT, then top developers won’t want to partner with them. This creates a large opening for a potential competitor to truly go after the platform strategy. But said competitor will have to move quickly AND will need to reassure developers that they will not launch consumer-facing offerings that will compete with their own partners.

In many ways, one might be wondering how OpenAI ended up in this situation of pursuing two conflicting strategies. Pure speculation here, but I can see how one might like to start w/ the platform strategy. But, in launching ChatGPT – perhaps initially just as an example app – much like how Numbers is an example app, they may have been as surprised by their fast and impressive distribution success. And if you’re able to attract 100m users that quickly, then it only makes sense to double-down on the consumer strategy and ditch the platform strategy. Afterall, owning the end user experience and being the brand that a consumer remembers is the preferred strategy here if you can pull it off. It allows you to compete with Google and just about every destination site on the internet. It only makes sense for them to switch strategies at this point.

So who ends up serving developers?

There are certainly a lot of would-be OpenAI competitors looming around, but right now, it’s not clear to me who will move into this opening that OpenAI is creating. This will be a land grab to own the platform strategy in the AI space. Platform strategies often have one of two things that partner companies gravitate toward: 1) Distribution and 2) Technology. 

For the former, we’ve talked about why people build on Apple or sell on Amazon – clearly distribution. In this case, a would-be competitor to OpenAI would have to offer strong technology. 

An analogous example that comes to mind here is TSMC. TSMC is arguably the best contract chip designer and manufacturer in the world. Although most people think that being in the semiconductor chip business is a horrible commoditized business, TSMC has margins upwards of near 50%! If you’re competing on technology utilizing a platform-strategy, you’d better be #1 or perhaps #2 in technology, because if you are #8, your tech largely is a commodity. 

TSMC manages to generate these kinds of margins, because they can produce very tiny chips, which means that phones and computers can cram in more chips into a limited amount of space for more computing power for their devices. Unlike in a consumer-facing strategy, no one cares if your chips are more user friendly or look nice or you have better customer support. The only thing that matters with this strategy is that you have superior technical specs. TSMC has continued to be the market leader over the decades, because they continue to reinvest vast amounts of profits and capital into staying the leader in this market.

This is what it will take to win the platform strategy in AI. Strong technology is a starting point but continued betterment is equally important to maintain the lead. And in AI, how do you come out with better and better models? By amassing more and more data. 

So I think what we may end up seeing here are weird alliances – I could imagine some sort of partnership between websites that have a lot of data and an OpenAI competitor here so that existing large destination sites will not lose to ChatGPT. 

In fact, we’ve seen this movie before. When Apple launched the iPhone, Google rallied around the Open Handset Alliance as a hedge to ensure that Apple would not soak up all the mobile traffic in the world. With this open working group consisting of top mobile carriers and handset makers to support Android, an open source mobile operating system, Google was able to come out with a competitor that they wouldn’t have been able to develop on their own. In a similar vein, when social networks were taking off and Facebook was dominating, Google rallied around Open Social, which was an open source social app SDK with support from many of the top social networking competitors to try to compete with Facebook at that time. 

We will definitely see something similar here – whether it’s through the alliance of various existing players to compete directly with ChatGPT’s vision or a single player attempting to go head-to-head with OpenAI on the developer-strategy much like what Shopify did with Amazon. In the ChatGPT world, you will be able to do everything on their site and in a competing world, you will be able to do much more on all the other sites. Both versions will win, because power is never left unchecked.

So what should I build? 

With the AI world in flux, how should I, as an entrepreneur, navigate this? I think that we should assume that every site in the future will utilize AI to provide a better user experience with greater personalization.

So if you’re trying to build the next AI image creator or the AI trip planner, etc, consider it too competitive already. In fact, Adobe, Canva, etc are all rolling out their generative AI tools within their own existing programs. Even for websites that have terrible tech teams, you should assume there will be an OpenAI competitor who will serve those tech-unsavvy websites to make adding AI to any website really easy. 

In software, distribution often wins, and as such, if I were building a new product, just like at most other points in software history, I would go after the spaces where I either a) had distribution edge already, b) saw an opening where there’s not an existing large player with distribution, or c) had an insight into a uniquely differentiated product in an existing space. And I might partner with an OpenAI competitor that is friendly to developers to ensure OpenAI doesn’t integrate my functionality into ChatGPT.

And if you are building infrastructure in AI, I think the opportunity is now to go after a developer-focused OpenAI competitor. But you need to be #1 and stay #1.

Sign up to read more posts like this one: