Several years ago, I was chatting with a friend who’d become an investor about an idea I had for a startup. It wasn’t a pitch: I just wanted to see what they thought of my premise.
“That sounds like a solid lifestyle startup,” they replied, “but most investors I know are only looking for billion-dollar companies.”
The fundamentals of venture capital explain why investors are on a perpetual unicorn hunt, but “even markets with a seemingly dominant player can support multiple winners,” writes Rebecca Szkutak.
Generative AI often looks like a magic trick, but complex prompts can consume a great deal of resources.
And that makes usage-based pricing a “natural fit” for SaaS companies adding AI-powered products to their roster, says Puneet Gupta, a former AWS general manager who’s now the CEO and co-founder of Amberflo.io.
“Since the back-end costs of providing service are inherently variable, the customer-facing billing should be usage-based as well.”
When OpenAI made its Chat Generative Pre-trained Transformer (ChatGPT) commercially available in November 2022, it kicked off a land run in tech. Nine months later, every startup is looking for ways to incorporate generative AI.
“Nearly every pitch deck I’ve seen since December has had AI on the front two pages,” says Adam B. Struck, founding partner of Struck Capital.
“There are a few areas that we think are especially investable and others that are more challenging for a seed-stage company to compete in.”
In this TC+ column, Struck unpacks his thesis as it relates to each layer of generative AI’s tech stack and includes his “new comprehensive deal evaluation framework specific to AI.”
