[HN Gopher] Starting a Business Around GPT-3 Is a Bad Idea (2020)
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Starting a Business Around GPT-3 Is a Bad Idea (2020)
Author : swyx
Score : 78 points
Date : 2022-10-09 12:03 UTC (10 hours ago)
(HTM) web link (www.allencheng.com)
(TXT) w3m dump (www.allencheng.com)
| yeck wrote:
| Enjoying the article, but feel the "Economies of scale" section
| makes an incorrect comparison between a Spotify business model to
| a theoretical business using OpenAI's API. The author suggests
| that since Spotify pays royalties per song played, getting more
| users doesn't mean more money for them and then claims a business
| using GPT-3 would have a similar limitation.
|
| There are a couple things I think is wrong with this. First,
| depending on the sort of users acquired by Spotify it does
| directly translate to more earnings. What doesn't scale well for
| Spotify seems to be how active the subscription-paying users are.
| To which I mean that a user who listens to 50 songs a day will
| cost more than a user only listening to 10 since the subscription
| price is static and common across users despite usage.
|
| That last point is where the author gets the next thing wrong:
| assuming that services employing GPT-3 will be fixed
| subscriptions instead of a pay-as-you-go model (like AWS). I am
| sure there will be business using fixed sub prices that are
| independent of usage, but we shouldn't assume that there is
| anything about GPT-3 that makes that more likely or even very
| different from other cases where fixed subs are used. There will
| always be some costs per user, be it the raw cost of electricity
| or cloud infrastructure. GPT-3's API would just be one more cost
| per request to consider.
| bloaf wrote:
| The drive to be differentiated is a way more powerful force than
| people appreciate. When big oil was deciding what to use as an
| anti-knocking agent (tetraethyllead or ethanol) the two biggest
| concerns that tipped the decision in favor of lead were:
|
| 1. Ethanol might become a competitor to oil. 2. Lead could be
| patented, licensed, and used to differentiate their gasoline from
| competitors.
| mark_l_watson wrote:
| While I enjoyed reading this article, I more or less disagree
| with it.
|
| To me, using large language models like GPT-3 is now fungible
| architecture component, multi sourced from OpenAI, Hugging Face,
| etc. For many NLP tasks, not using modern deep learning models in
| your infrastructure dooms you to writing inferior systems.
| RobotToaster wrote:
| Starting a business that relies on any SAAS, especially one not
| easily fungible, seems like a terrible idea.
| akudha wrote:
| There was a site that was making 50k USD per month, providing
| very basic analytics. This was in the early days of Twitter.
| Even if it lasted only 6 months at 50k, that is 300k , for a
| side project.
|
| It all depends on timing, risk vs reward etc
| tiborsaas wrote:
| Given that it's a 2 yearish old article (although there's no date
| in the post), I'm wondering if these predictions are proven
| correct:
|
| > The barrier to entry to developing a viable product gets low
| for everyone, meaning hundreds of competitors will pop up
| overnight.
|
| > A lot of founders are going to try to start businesses based on
| GPT-3, and a lot of money will go into them, and it's going to be
| a blood bath.
|
| I'm not really following the AI startup landscape, but I haven't
| seen a Cambrian explosion of GPT-3 apps, although I noticed a few
| ones. Blood bath is also way too dramatic. Anyone seen a post
| where a founder of a heavily GPT-3 based startup cried out how
| their startup was destroyed because "x"?
| andreyk wrote:
| It has happened in some cases, eg with all the "generate
| marketing copy with AI" businesses.
|
| But yeah, in general the article assumes that GPT-3 will have
| lots of applications that make it super easy to make a useful
| product with very little extra effort, and that is just not
| true. Twitter demos are easy, robust and useful products are
| not.
| gjmacd wrote:
| Unpopular opinion. But starting a business around AI is a bad
| idea -- it's a tool not a business. AI is the "Object Oriented"
| of our times. It'll end up being something that will be used in
| our tooling, but I recall all those 90's companies who died
| miserably basing their whole business model around objects... I
| feel like AI has the same future.
| Kiro wrote:
| > but I recall all those 90's companies who died miserably
| basing their whole business model around objects
|
| Do you have any examples?
| BjoernKW wrote:
| NeXT, for one. They didn't exactly die miserably, given their
| technology is what ultimately still runs Apple's OS software
| and APIs.
|
| NeXT's business model was based on objects to some extent at
| least and they were enthusiastically selling object-oriented
| software as a business feature, rather than a technical
| matter only software developers care about.
|
| Here's Steve Jobs demoing NeXTSTEP's object-oriented
| development environment:
| https://www.youtube.com/watch?v=rf5o5liZxnA
|
| The way he explains it, it makes perfect sense (as one would
| expect): In an ideal world, an object-oriented software
| development approach not only allows non-technical people to
| define requirements but also enables them to compose and
| build applications from existing components without having to
| write a single line of code.
| inopinatus wrote:
| Or rather, any object lessons.
| echelon wrote:
| > starting a business around AI is a bad idea
|
| It's not based around AI. It's based around content creation.
| The AI part is just the means to the end.
|
| These methods allow for easy content creation. It's akin to an
| industrialization of the mind. We're now currently searching
| for the best human interface to control the outputs so we can
| attain the results we want immediately and with high fidelity.
|
| Once the images and sounds in your brain can immediately jump
| to the screen, you'll see what this has all been about.
|
| I don't see how this is at all comparable to object oriented
| programming. These techniques solve real business and social
| needs. They automate entire decades of learning, hours of toil,
| and free up enormous capital.
| andreyk wrote:
| The Implicit assumption here is that AI in general is one of
| several possible tools to a given problem. This is true in some
| cases, but not in others (eg media synthesis, automated
| transcription/translation/classification, etc.). So I think
| "starting a business around AI" should imply that AI is a core
| necessity, not just a chosen tool. Granted, it may be just one
| tool among many that could be useful, even if it necessary.
| ducktective wrote:
| >This is true in some cases, but not in others
|
| yet...
|
| Who would have thought of something like stable-fusion just 5
| years ago? It generates images out of thin air.
| alextheparrot wrote:
| There is a great deal of GAN literature on the order of 5
| years old...
| mlyle wrote:
| Even those of us following that literature were surprised
| by the sudden improvement in image synthesis.
| visarga wrote:
| Probably even more surprised. GANs never solved the
| diversity problem.
| bcardarella wrote:
| Yeah just wait for GTP-4. Of course by then you might as well
| wait for GPT-5.
| shisisms wrote:
| That was a good skim. Already seeing wafer thin, and excellent,
| consumer apps built on stable diffusion.
|
| I've been increasingly concerned that given now the wide spread
| skills to build consumer apps for example, the value will be
| eaten up too quickly.
|
| Thai article makes the point that in fact this isn't where
| (economic) value really sits. Building a moat requires more than
| just the ability to build.
|
| Thus, it feels as though building simple consumer interfaces to
| the latest AI models is a short-term and largely thankless play.
| tjr225 wrote:
| Was this comment generated by GPT-3?
| m00dy wrote:
| looks GPT-2 to me.
| kirubakaran wrote:
| The ultimate 2022 insult
| langitbiru wrote:
| The difference between stable diffusion and GPT-3 is the former
| is open source, meaning you don't have to pay tributes to one
| party.
|
| The barrier entry to developing apps on top of Diffusion is
| higher because you have to setup GPU instances. It's quite
| expensive, compared to OpenAI's GPT-3 where you can just use
| their API.
| josephcsible wrote:
| > The difference between stable diffusion and GPT-3 is the
| former is open source, meaning you don't have to pay tributes
| to one party.
|
| That's not what open source means, and Stable Diffusion is
| not open source, since its license discriminates against
| fields of endeavor.
| lokimedes wrote:
| The idea that the use of GPT-3 in a product is not providing a
| differentiator is true if we are rebottling the output with no
| value added. Stock photos from Unsplash and software libraries
| from Github also provides zero competitive advantage - but the
| possibility of synthesizing a competitive new offering on the
| back of these is still perfectly possible. Enablers and
| Differentiators, not the same thing.
|
| The obvious out of the way, I have learned never to underestimate
| market timing. Having laughed at the IRC for Peeps they called
| Slack, perhaps the asymmetry of knowing how to use GPT-3 is still
| a great untapped opportunity.
| swyx wrote:
| this exactly is what i have been exploring/writing about.
| productizing a tech is a whole other discipline than making the
| tech itself and its not just "heh be good at marketing and
| distribution lol"
| chii wrote:
| although good marketing and distribution is also required -
| but only after productizing!
| andybak wrote:
| > Meanwhile, the profits will accrue to the true beneficiaries:
| 1) the algorithm owners, OpenAI [...]
|
| This seems incorrect to me. The crucial parts have been
| reimplemented. The weights are their only secret sauce and
| equally good free replacements are only a matter of time.
| visarga wrote:
| I agree, they get replicated fast. But large language models
| also have a democratising effect even when they are under paid
| API - they are lowering the barrier to many NLP tasks. They
| take skills from the internet and repackage them in useful and
| customised forms. This means the benefit is really being spread
| around to everyone building on them, they can build in a day
| what used to take a month or a year. I see them as "open
| sourcing" all these previously hard to access AI skills.
|
| I see LLMs as part of a wider trend - we used to transmit
| information orally, then we invented writing, then printing,
| then media and internet. Now we can transmit the distillation
| of our whole culture as a model, it can be applied directly to
| solve problems. It's the next step in the propagation of
| culture.
| dzink wrote:
| When the tech is open sourced, the product managers get to shine.
| Requiring less engineering skill to pull off something means a
| wider range of product people (founders, marketers, corporate
| product managers) get to show their skills in finding product
| market fit in more niches. Starting a business around Excel was
| not a bad idea at all. OpenAI is becoming the Fairchild of our
| time - keeping things closed has triggered an exodus of brains
| and open source activity that creates the cambrian explosion. If
| they keep up with their strategy, they would become the marketers
| of tech that is commercialized by open source instead.
| gennarro wrote:
| Recent google updates disprove this. There have been a hugh
| number of highly successful, albeit short-term, websites built
| off of gpt-3 tech.
| davidklemke wrote:
| Could you share a few examples? Keen to understand why they
| used GPT-3 to generate the content.
| chrisfrantz wrote:
| We did this! Built and sold.
| https://techcrunch.com/2021/05/19/unbounce-snags-snazzy-
| ai-t...
| chrisfrantz wrote:
| Read this article a few years ago and was glad it was published!
| It definitely reduced competition judging by the popularity on HN
| when it first debuted.
|
| We were building our company on the back of GPT-3 and soon sold
| it for a life-changing amount of money.
|
| So starting a business around GPT-3 ended up being a very good
| idea :)
| amelius wrote:
| Seeing Grammarly doing quite well (judging from all the adverts
| on yt), I can imagine a GPT-3 based editor that improves the
| user's prosaic output, and I suppose it could be quite popular.
| Perhaps writing technical documentation can even become fun.
| swyx wrote:
| grammarly raised at a $13b valuation last - hearing that it is
| in the mid 9 figures revenue. so yeah, quite well.
| nradov wrote:
| Writing technical documentation already is fun.
| simonw wrote:
| GitHub Copilot (in markdown mode) provides that already. I'm
| increasingly using it to help write technical documentation and
| blog posts - it works great.
|
| You can even paste in a chunk of code to give it some hints,
| start writing about it (with Copilot assistance) and then
| delete the code later.
| [deleted]
| swyx wrote:
| submitted this because i have been doing a bunch of research
| around productized AI businesses (https://lspace.swyx.io/) in
| preparation for someday pivoting
|
| and my latest post is here
| https://news.ycombinator.com/item?id=33144039
|
| notable that in the small, this post was "wrong" - Jasper AI went
| from 0 to $60m/ARR in the 2 years since this post. sure, you
| could regard them as "winning the lottery", but i'm sure if you
| asked their bank accounts they wouldn't agree starting a biz
| around GPT3 is a bad idea :)
| samuelstros wrote:
| Jasper AI seems to prove the point though.
|
| If your technological advantage is not high (enough), you have
| to compete on marketing and distribution.
|
| Jasper AI is heavy on marketing and distribution.
| swyx wrote:
| well, on a very superficial level, but
| [this](https://www.youtube.com/c/jarvisai) is real work man
| and it also involves solid "product thinking" for
| nontechnical users to hold it right.
|
| http://interiorai.com/ is on the surface just
| stablediffusion, and sure pieter is an incredible
| marketer/has huge distribution, but he is doing real product
| level work to make it more usable for his chosen usecase, and
| that should not be ignored
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