Do You Want To Get “Lucky” During the AI Gold Rush?

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Why Is AI the Hottest Topic Right Now?

The internet spoke about crypto until even our grandparents bought bitcoins.

Today, the same is happening with AI. It’s the hottest topic everywhere.

Both serious content and a gazillion of memes about Chat GPT, OpenAI, and how we will all lose our jobs soon (after being replaced by robots) are flooding every part of the internet.

With this unconventional noise, attention, and growing importance, there’s also enormous room for business opportunities.

But before diving into that, let’s talk about AI.

You may be super tech-savvy and know more than me on the topic.

But to be fair to every reader, this is a simplified explanation of AI.

AI, which stands for Artificial Intelligence, is like teaching computers to be smart like humans.

It's all about making machines think, learn, and solve problems like we do.

For example, AI copywriting tools. Think Jasper.ai, copy.ai, and a lot more.

They utilize NLP and machine learning software to comprehend human learning and writing patterns.

Then analyze vast amounts of online content in seconds to generate the copy.

Since they reference existing content, there is no guarantee of 100% accuracy, requiring manual review.

Voilá! You have a quick and low-cost aid to help you overcome writer's block and generate content ideas promptly.

Do you see how valuable this can be for content creation?

That’s just one use case, and we already have multi billion dollar markets.

We have room for hundreds or thousands of variations.

We have AI writing tools to:

Improve your writing and orthography, like Grammarly.

Help you with SEO, like Surfer.

Translate faster and with more accuracy, like DeepL.

Automatically generate comments, blog posts, emails, and a lot more

And this is just talking about writing.

If you want to make your mind explode, simply look at the stuff being launched at ProductHunt every day under the AI category.

How far can we go? Let’s talk about that.

Tech Entrepreneurs Have Found Gold in AI

Considering that we started working on artificial intelligence development in the 1950s, it’s interesting that AI-powered businesses were almost non-existent until the release of GPT-3 back in June 2020.

AI, of course, can have a lot of applications in the business side of things, and thus, all sorts of new software and AI-powered services are being launched every day.

Everyone is trying to build something on top of ChatGPT.

An eCommerce store assistant, a browser extension to help with copywriting, something to automate your team’s productivity, or you name it.

Is there something wrong with this? Not really. It is an opportunity.

You can use AI to make a ton of money without reinventing the wheel.

Look at this “Interest over time” data from Google Trends.

The search term is “chatgpt”:

If everyone is asking for AI products, why not create them?

As I said, AI entrepreneurs rely on simple methods, yet their products are breaking records.

This was one of the first promising results I saw on Twitter:

What’s the Standard Tech Stack Needed To Build Any AI Product?

To build an AI chatbot, you may use any existing open-source UI, then set up a light-weighted backend to connect OpenAI API.

For PDF.ai, The tech is based on Langchain, OpenAI embeddings, and a vector database like Pinecone.

In this My First Million episode, Dharmesh gave an entry-level explanation about vector embedding.

AI Products Have No “Moat” in Terms of Their Tech Stack

You can learn from the previous section that the number and type of tools you can use to build AI products are not highly diverse.

Yes, there are different paths that you can take, and of course, you can get creative, but in the meantime, you can't rely on a Coca-Cola-like secret formula for success.

There is no moat in terms of tech stack for AI builders.

In case you're unfamiliar with the term, an economic moat is a competitive advantage that your business has against other companies in the market to protect itself from being copied or outperformed.

You can have a strong economic moat in other areas of your AI business, but that won’t be on the technology. No, there is not such a thing in the AI competition. A significant percentage of the products are just a wrapper of OpenAI APIs.

Due to that, it isn’t surprising that most products are chatbots, copywriting tools, and similar.

How Important Is a Company’s Economic Moat in Traditional Industries?

Short answer: a lot more critical than in the current AI wave.

That’s why some tech like IBM and Microsoft patent their advancements and ensure that the world knows they were the first.

That explains why huge companies like Amazon spend much of their time and resources acquiring small companies (even competitors) to be better positioned and out of threats.

It’s like a giant chess game, just a little more bloody.

It explains why Warren Buffet compared these strategic advantages to a “moat,” like the one medieval kings and armies built around their fortresses and cities.

Companies fiercely build and defend their moats, whether their technology, patents, low material cost, better distribution channel, supply chain, or brand recognition.

Building AI Products Is the New Gold Rush

So, after everything we have discussed, why would you consider building a product almost anyone could copy?

First, other options exist to differentiate from the competition (I will discuss them in the next section).

And second (this is very straightforward), the market, opportunities, and potential rewards are enormous.

Don’t believe it?

Just think about my newest product.

I spent $20k acquiring Looseleaf and rebranded it to PDF.ai.

It only took six days to break even, and I also pocketed $2,891 in profits.

Another exciting fact is that by May 8, PDF.ai had 500 signup users, but it crossed the 10k mark one week later. Just one week!

I am intrigued to see where this product will be in one year.

But let me repeat - the market, opportunities, and potential rewards are ENORMOUS.

There’s also no entrance or application - anyone can jump in and make their bet in this Gold Rush.

Many makers are very worried about building a product that will live forever. However, I share @dannypostmaa’s view here:

If you are interested, consider jumping into the wave today.

You Can Still Build a “Moat” for Your AI Product

While the technology may be open, you still have options to build a moat for your AI startup.

These are a few:

Distribution Channel

SEO and ads are only two of many things you can do in 2023 to market your AI startup.

I like how @levelsio and @dannypostmaa leverage their Twitter audiences to distribute their AI image-generation products.

It can even be funny because they compete in some way. Still, their interactions on Twitter seemed beneficial for both of their companies instead of creating tension or disruption.

So, even if someone comes and copies their products from A to Z, they won’t have the opportunity to compete directly without a similar audience to leverage.

In that way, both creators have protected their products by having a Twitter audience that gives them reach, distribution, direct customer feedback, and speed.

Marketing

I recently created a TikTok account. Yes, you read that right.

I always thought TikTok wasn’t “my thing,” but I’m glad I did, and after a couple of weeks, I feel like I should have done this earlier.

If PhotoAI.com “added $7,000 in MRR in a day from one TikTok”, why not try it?

This type of marketing worked so well for @levelsio that I remember he was hiring someone to manage his TikTok influencer marketing outreach efforts.

The lesson for me is that your duty as a founder is to put your product in front of as many prospects as possible and that if you find ways to market your product better than your competitors, you will be very ahead of them.

Creativity Will Make You Different

My last example is closely related to distribution and marketing.

It’s about being creative with everything you do, even what others would call “the boring parts of running a business.”

A great example can be found in Dan Siroker from Rewind.ai.

Just take a look at this tweet from Dan:

Isn’t this creativity? Talk about fundraising decks for potential investors, and you’ll put everyone to sleep.

However, Dan made that part of his startup work fun and viral by thinking out of the box.

That’s how you differentiate your business, by doing what no one else does.

For better or for worse, you can’t copy these growth hacks; they need to come from you.

That’s how you create an unstoppable AI startup among the many competitors.

Conclusion

The best moment to launch an AI product is today.

It is an actual Gold Rush.

Just take a look at these figures:

How long will this last? No one knows, but that doesn’t mean it’s not worth it.

The mines in California are no longer giving us gold but helped many people become wealthy back in their time.

Find your idea, launch it, and make as much money as possible.

It’s an opportunity to take advantage of now.