AI Investing frameworks

Compiled AI investing frameworks from Nabeel (Spark), Victor (Benchmark), and Sarah (Conviction) based on Manas’s Twitter posts for personal reference.

What happens when the underlying model becomes 10x better?

• Is the revenue durable?
  • If the model becomes 10x better, what happens to the product? Lot of thin wrappers get folded inside the model and become part of their capability
• Track benchmarks where model is improving very rapidly
  • Its a given that models improve fastest on domains where the output can be objectively measured. Stuff like code (where you can compile and test) and text based filed where output is verifiable (law, medicine etc)
• Then ask yourself on whether those rapid model improvements(on these domains) make the business more durable or less durable?

What happens when you call collect customer data or talk to customers at scale? How do you build if you had an army of compliant infinitely patient knowledge workers? Instead of talking to top 5% customers, what happens if you can talk to everybody?

• What does this unlock?

3 ways to bucket startups

• Adaptation
  • Make the old thing again but + AI this time. In mobile revolution, it was social network on web became social network on phone. Adobe firefly, Spotify DJ, Canva Create, Figma Make, Airtable Omni are all adaptations of the existing product. Usually done by incumbents using their existing distribution and tech advantage.
• Evolution
  • Because of new tech wave, the user behavior changes and a new workflow is created/invented. Its not the same workflow using AI tools. How people shared photos in the Flickr era vs how they share photos in the Instagram era (example of the mobile evolution). Similarly with the AI wave, its how people do software development (CHOP by Steve Yegge), Descript for video editing etc. This is not AI slapped on existing incumbent’s UI but rather entirely new workflows itself
• Revolution
  • This is an entirely new way or platform that only exists because the new tech exists. Uber and mobile is a good example here. What are the examples in AI for this?