Mar 23, 2023

Platform Risk and AI-Powered Products

AI-powered products are becoming increasingly popular, but they come with a significant risk. Platform risk refers to the fact that existing products are implementing the same features, making it difficult for stand-alone products to differentiate themselves. OpenAI is the only one who profits in this situation, leaving founders of AI-powered products with little guidance.

AI INNOVATION COMPETITION

Justin Jackson

⚡ Interested in bootstrapping, podcasting, calm companies, business ethics 🎙️ Co-founder of @transistorfm (podcast hosting) 🐘 @mijustin@mastodon.social

Member of Indie Hackers

I don't think ChatGPT will enable indie startups to launch profitable businesses.

In most cases, AI/ChatGPT will be added as a feature in existing apps; no need for an intermediary stand-alone product.

In the "ChatGPT value chain," OpenAI will accrue most of the revenue.
— Justin Jackson (@mijustin) March 23, 2023
I'm seeing more DMs from founders launching stand-alone products built on top of ChatGPT.

They ask me for my advice, and honestly, I don't know what to tell them.

Differentiation will be challenging (many of the products I'm seeing are similar to each other).
— Justin Jackson (@mijustin) March 23, 2023
But the biggest risk for ChatGPT-enabled apps is that existing products (Microsoft Office, Descript, Google Sheets, Zapier) are just implementing these features directly into their apps.

Who profits? OpenAI.
— Justin Jackson (@mijustin) March 23, 2023
Because AI requires significant computing power, building stand-alone products on top of tech like ChatGPT is the ultimate form of "platform risk."
— Justin Jackson (@mijustin) March 23, 2023
I talk more about how "the main thing" often gets most of the revenue in a value chain here:https://t.co/hVGnElb1kf

I see this happening with ChatGPT (the main thing) and many of the startups being launched (most are "side dishes").
— Justin Jackson (@mijustin) March 23, 2023
🎯https://t.co/uaEpEpWBtM
— Justin Jackson (@mijustin) March 23, 2023
Some folks misunderstand what I'm saying.

I'm not saying, "these AIs can't be helpful assistants."

I am saying that founders trying to build startups that are "X powered by ChatGPT," with some interface to ChatGPT as their main value prop, are unlikely to succeed.
— Justin Jackson (@mijustin) March 24, 2023
🎯 https://t.co/pWmcjfVoON
— Justin Jackson (@mijustin) March 27, 2023