Will OpenAI Kill All Startups? | Transcription

Transcription for the video titled "Will OpenAI Kill All Startups?".



Intro (00:00)

This is Michael Sibah with Dalton Caldwell and today we're going to talk about how OpenAI is going to kill all startups. This is our last video. Might as well pack it in, but done. OpenAI is going to do this. We're going to make the videos next time. Yes, we're the next video. That's where you'll be. AI Dalton and AI. Yeah, you're right. Do in our video for us. They do a better job than us. Yes. What do they call it? It's not a deep fake. It's like a complete AI recreation of us. Yes. Yes. We're done. Well, it's been fun. So let's talk about how that happens.

Discussion On Artificial General Intelligence (Agi)

Building AGI (00:31)

Right. So I think to start, people need to understand that companies like OpenAI and Thropic, etc. They're actually trying to build AGI. They're not trying to build the AI powered CRM or better search or they're trying to build AGI. And this is not a debate. We're not going to talk about whether they're going to succeed at building AGI. Yeah. There's plenty of videos and there's plenty of experts that are better expert than us to debate whether AGI is about to be created. Yes. I kind of bring this up. If you're at a Godwin's law, it's not an alternative debate. When other people argue with each other and one person calls the other person a Nazi, the debate is over and no good discharging productive. No, it's just me and it's over. And so where I'm going with this is once we start talking about how AI could become God and we have a Skynet and take all the things and we're going to be uploaded to the Matrix, I'm arguing nothing useful. That conversation is over without this. We can't help you in this video. We don't know. Whether or not Skynet is coming outside the scope of this video. And we would love to talk about it. We don't have the expertise. Yeah. We're not there. They should listen. Yeah. Someone else is the expert on that. Not us.

Historical Examples (01:45)

So what can we talk about that? I think it's this. There's a lot of history to learn from about when major technological changes have come out. Yeah. And to the extent this is a major technological change, as opposed to we're all going to get uploaded to the Matrix or whatever, there's a lot to learn from history. Yes. And so this is where when founders do ask us advice on what they should be thinking about with AI or how will AI affect their startups or employees open AI going to kill other startups. We have a lot to say about that or we have a lot of suggestions to look from history. Yes. So why don't you list some of the. Yes. So I mean, when you look at major innovations, right, talk about farming or modern farming, you talk about electricity, talk about the internet. I think what's been so interesting as a trend is how many businesses it's enabled, right? Like the number of businesses increased. And then the second trend is how startups were relatively advantaged versus incumbents. Like the greater the technology change in the shorter the period of time, the more a startup start advantage. And like the whole history of the internet is amazing. There's a whole industry around starting about funding startups because so many innovations happen so quickly and so many companies are disrupted so quickly. So there is clear, clear precedent to major new technology trend, creating opportunity for startups. If history repeats as it tends to, somebody who's smart is looking at these tools today, saying, holy crap, real problems can be solved right now that couldn't be solved six to 12 months ago.

Current Startups (03:20)

I think it's interesting because you're seeing this in a lot of conversations with founders right now. Right? Yeah. Let's talk about who is choosing to start a company in this phase and what we can learn from them. Yeah. A couple of things. So one, there's a difference between cargo, culting, AI and actually using AI to build better features. Yes. And so let's talk about the difference. Cargo, culting, AI is to say, we have AI and it's like tangential to what you're doing. You're just saying it to raise money. Yeah. It doesn't help your customers. It doesn't improve your product, whatever. Yes. But we are seeing people add AI features that dramatically increase retention, that dramatically increase the quality of the product that are making much easier to charge for it. And that stuff is real and that is not hype. That's not bullshit. No. That's real. Yes. This is like when people first started launching apps. Yeah. When the app store came out, apps were actually good. Yes. It was there was a hype cycle around apps and a lot of people were cargo holding apps. Yeah. But building a high quality mobile app that increased the retention of your users. Incredible. Facebook almost died because they didn't do it fast enough. Exactly. Yeah. I think if you look at, I don't know, we saw from our generations founders, we saw open source and cloud computing come out and think about cloud computing. If someone was like, oh, this cloud computing things hype or like, we're not going to have cloud computing because it's just a thing VCs want to hear. It's the computer. You know what I'm saying? Like there was sometimes people, you remember these people that were like, haters on cloud computing because it was overly hyped. Yeah. But that's missing the plot. Yeah. Just because it was overly hyped didn't mean you shouldn't put on your thinking cap. Well, it didn't mean you should be like, hey, should we be running some of this stuff from the cloud instead of running our own servers?

Utilizing The Tools (04:51)

Yeah. Well, and I think that this is a big, there's a big difference. And we've now seen both, right? I think that we've seen the kind of fintech boom and the crypto boom where the people attracted to them were slightly different. Yeah. And as tools, they just weren't as useful. Whereas, you know, like giving everyone a new bank, like for every single flavor. Whereas like, we also saw literally during our lifetimes, launching a website with like, closed source expensive tools would cost five million bucks. Yep. And then with the similar tools that were better and open source would cost like 50,000. We built our companies on my seatbelt. Both of us. Yes. Well, like Postgres. But yeah, Postgres. Yeah. Postgres. Well. Ruby Postgres. But regardless. Like that shift happened. And then I remember when like, you had to buy servers and then wait for them to come and then configure them and then have to get more space in the cola. Like the speed of actually building software was incredible. Like we're going to keep buying server. Like, like some people rejected that. Yeah. And so there was a moment in time where it didn't make sense to jump on the wagon and start using the bandwagon. But it was actually smart. It wasn't just bullshit hype. It wasn't bullshit hype. It was real. And so I think it's obvious that now AI is clearly going to be a tool as impactful, as mobile or open source back ends or cloud computing. And then we'll see from there. Right? Like LMs are clearly that useful. Yeah. And so it's stupid to not think about how you can make your users more happy, more productive. And again, I think without the tool. What's funny about this is you and I were in the room. When OpenAI was created because we were working at YC with SAM. Yeah. And we had YC research. Yeah. And it was a nonprofit. It was meant to be an enabling technology. Exactly. The vision here, you were in the room. Yes. It was to be a nonprofit so that all these startup flowers could bloom. Yes. And all these people, you know, could be enabled to create value. Yes. And so again, I think sometimes people are afraid of a narrative that OpenAI, maybe that will happen. But like the vision was about creating the technology. Yes. So we harnessed by other people. And by ideally creating EGI, which kind of, what his goal was, as opposed to, I want to create AI-powered CRMs and I'm going to destroy every startup that's going to create AI-powered. No. That was not what we understood. No. Right?

Opportunists (07:15)

No, no, no. I think what's interesting as well when you think about this game is that like, there are very, very, very well-paid people, and you're pointing this out, very well-paid people who are leaving their jobs and who are starting startups right now, because they believe that LLMs are a powerful tool. Yeah. The way I think about this is opportunity, cost, and life. There's people that I've been funding, and they have a great job, and they actually like their job. Yeah. They're choosing to leave because they know at this moment in history, because they become domain experts at AI. Yeah. But this is the moment to do a startup. Like this is that-- Yes. Imagine if you worked on, I don't know, cloud computing for years. Yeah. And then all of a sudden, Amazon Web Services comes out. You're like, oh, this is my-- Yeah. They're calling me in. This is my moment into us. Yes. And so it's really cool to see these people with all this vast domain expertise that they did before this stuff was cool, realize that this is the moment in time to work on this stuff. Well, and I think that we see a second group of people too, and I feel like those are the people who got the first iPhone when the app store came out and said, I'm going to build an app. Yeah. And it was weird, because at that moment, everyone had zero years of experience. That's exactly right. Well, remember the Brooks Founders, what they did when they were like 15, was jailbreak iPhones. Remember all the kids that were doing jailbreaking? Like this was like a rite of passage to be into this stuff and learn about it, because no one knew anything about it. So I think there's like two sets of smart people who are really attracted to this, right? Really, really smart people who love CS, who are like, this is an amazing tool, and I'm going to learn as much about it as possible because most people don't know anything about it. I can get on the ground floor. And then people who have been doing ML for a couple years who were like, oh my God, like all of the things I imagine were going to happen are starting to happen. I can predict the future.

Get Rich Quick (09:05)

That's a perfect time to do a startup. I think what's tricky though is that there are people who don't think that this is a good time. The people who aren't really in to CS, don't really aren't really excited by the power of LLMs, and people who don't have experience with ML at all. And those are the people who just want to make money. And I think what's interesting is in the last couple of cycles, those people have been very attracted to the startup world. How do I make money fast? Those people are not being attracted to this. I think that's what makes our jobs so much fun because working in people who want to make startups fast, might make money fast in startups, it's a lot of great group of folks. Those are harder office hours. Harder. Harder. When we're like, yeah, it'll just take a decade. They're like, no, no. Why don't I do my ICO or something? Whereas this group of people, it reminds me when people were nerding out about Ruby back in the day. Like, oh, wow, I'm just excited about what I can build.

Time For Optimism (09:59)

And when you think about it, this is a perfect time where if you're a creative person and you're an ambitious person, you can do really cool stuff. We sell this with the iPhone. Yes. You can build people's minds. Well, again, Uber would not have made sense without the iPhone. No. So to me, it's less obvious that everyone's going to build open-y-eye competitors. I am worried that all the low-hanging fruit ideas, open-y-eye will just be able to do well enough. Yes. But if you go deeper to second-level insights, all Uber, after a consequence of the iPhone, second-order effects like this from LLMs are going to be amazing. You get what I mean? It wasn't the obvious shit. I'm trying to analogy out on you, right? Like, fart apps. Remember when I was making fart apps? Well, that wasn't the big business. I would argue, maybe analogy here was the like, it was obvious that maps were going to come to the phone. Yeah. It wasn't obvious that Uber was going to come, right? Right. And so it was never, whoever would have imagined. And so I definitely think that if you can think second-order, and I'll even be charitable, I think sometimes to think second-order, you think first-order. It's okay if your thing starts as a toy. Like when people are like, oh, this is a thin wrapper on open-y-eye, I always laugh because I'm like, okay, is that the destination or the starting point? Yeah. If it's a starting point, I might as well be the old drop box as a thin wrapper on top of the AWS on top S3. Yeah. Oh, I can build this in a weekend. I can build this in a weekend. Is it sure sign that the person doesn't know the fuck I'm talking about? So I will say that like, you know, if you are absorbing, if your thing is a thin wrapper on open-y-eye to start and you're absorbing hate, ignore those fuckers. Yeah. Like that's silly. Like, understand that many good things started like toys and like make something that customers really love. Yeah. This is a time to be optimistic. This is a time to build cool stuff. Yeah. And this is not a time to cargo cool, as I said earlier. So superficially copying the AI stuff just because it's hot for raising money. Don't do that. No. But if you can really solve customer problems in an amazing way, yeah, this is the time.

AGI Is The Goal (11:59)

Yeah. And I think the last point we'll give is that I think that until these big companies solve AGI, it's going to be their first, second, and third goal. And so using the existing tools to make people's lives better, their businesses better, it's not on their list. Like getting AGI in one, two, and three most boring goals.


Outro (12:24)

That's a huge opportunity for everyone. So look, in conclusion, unless you actually believe in the short term, AGI will be created by OpenAI that will do all the things that's false for us to predict. Yes. OpenAI is not going to kill old startups. And there's plenty of room to innovate. And maybe we would say that the tools that exist now and the LMs that are being made available, this could be an explosion of new amazing startups. This could be the moment that we've been waiting for since mobile, yep, where people can actually do cool new things and there aren't just cog-a-cog-calting. So this should be a moment where everyone's excited, except for the people on Twitter, whenever I'm excited. All right. Thanks much, Dalton. Thanks.

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