Do You Want To Get “Lucky” During the AI Gold Rush?
The best moment to launch an AI product is today. It is an actual Gold Rush. 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.
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.
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:
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.
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.”