AI is changing how Silicon Valley builds start-ups
AI means the end of internet search
Cohere is Canadian AI
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AI is changing how Silicon Valley builds start-ups
Gamma is among a growing cohort of start-ups, most of them working on AI products, that are also using A.I. to maximize efficiency. They make money and are growing fast without the funding or employees they would have needed before. The biggest bragging rights for these start-ups are for making the most revenue with the fewest workers. Stories of “tiny team” success have now become a meme, with techies excitedly sharing lists that show how Anysphere, a start-up that makes the coding software Cursor, hit $100 million in annual recurring revenue in less than two years with just 20 employees, and how ElevenLabs, an A.I. voice start-up, did the same with around 50 workers. The potential for A.I. to let start-ups do more with less has led to wild speculation about the future.
Almost every day, Grant Lee, a Silicon Valley entrepreneur, hears from investors who try to persuade him to take their money. Some have even sent him and his co-founders personalized gift baskets. Mr. Lee, 41, would normally be flattered. In the past, a fast-growing start-up like Gamma, the artificial intelligence start-up he helped establish in 2020, would have constantly looked out for more funding. But like many young start-ups in Silicon Valley today, Gamma is pursuing a different strategy. It is using AI tools to increase its employees’ productivity in everything from customer service and marketing to coding and customer research. That means Gamma, which makes software that lets people create presentations and websites, has no need for more cash, Mr. Lee said. His company has hired only 28 people to get “tens of millions” in annual recurring revenue and nearly 50 million users. Gamma is also profitable. “If we were from the generation before, we would easily be at 200 employees,” Mr. Lee said. “We get a chance to rethink that, basically rewrite the playbook.”….
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AI means the end of internet search
We all know what it means, colloquially, to google something. You pop a few relevant words in a search box and in return get a list of blue links to the most relevant results. But fundamentally, it’s just fetching information that’s already out there on the internet and showing it to you, in some sort of structured way. But all that is up for grabs. We are at a new inflection point.
The biggest change to the way search engines have delivered information to us since the 1990s is happening right now. No more keyword searching. No more sorting through links to click. Instead, we’re entering an era of conversational search. Which means instead of keywords, you use real questions, expressed in natural language. And instead of links, you’ll increasingly be met with answers, written by generative AI and based on live information from all across the internet, delivered the same way.
Of course, Google—the company that has defined search for the past 25 years—is trying to be out front on this. In May of 2023, it began testing AI-generated responses to search queries, using its large language model (LLM) to deliver the kinds of answers you might expect from an expert source or trusted friend. It calls these AI Overviews. Google CEO Sundar Pichai described this to MIT Technology Review as “one of the most positive changes we’ve done to search in a long, long time.” AI Overviews fundamentally change the kinds of queries Google can address. You can now ask it things like “I’m going to Japan for one week next month. I’ll be staying in Tokyo but would like to take some day trips. Are there any festivals happening nearby? How will the surfing be in Kamakura? Are there any good bands playing?” And you’ll get an answer—not just a link to Reddit, but a built-out answer with current results.
More to the point, you can attempt searches that were once pretty much impossible, and get the right answer. You don’t have to be able to articulate what, precisely, you are looking for. You can describe what the bird in your yard looks like, or what the issue seems to be with your refrigerator, or that weird noise your car is making, and get an almost human explanation put together from sources previously siloed across the internet. It’s amazing, and once you start searching that way, it’s addictive.
And it’s not just Google. OpenAI’s ChatGPT now has access to the web, making it far better at finding up-to-date answers to your queries. Microsoft released generative search results for Bing in September. Meta has its own version. The startup Perplexity was doing the same, but with a “move fast, break things” ethos. Literal trillions of dollars are at stake in the outcome as these players jockey to become the next go-to source for information retrieval—the next Google….
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Cohere is Canadian AI
Cohere CEO Aidan Gomez was on the Google team that invented the transformer, the “T” in ChatGPT, a technique that spawned the LLM era of AI. Cohere is one of a small cohort of AI firms making its own large language models (LLMs). But, unlike many of its competitors, it’s only going after business clients rather than trying to wow the public with AI chatbots.“This technology is still in the early days,” says Cohere co-founder Nick Frosst. But one day, he says, it will be “a core function of everybody’s work life.”
Cohere, founded in September 2019, started with the models. But the firm has learned that businesses need to be shown what to do with them. Last month it launched North, a software package that applies its models to clients’ data to answer questions and power AI agents that can take on tasks like research. The startup is betting that firms of all sorts and sizes will eventually want their own version of Cohere’s AI embedded within their organization. But 400-person Cohere is initially working with a smaller number of big businesses to get North up to speed in different sectors.
The company landed its first big deal with Royal Bank, which is not only the country’s biggest financial services firm, but also its biggest company. Cohere and RBC are co-developing North for Banking, a version of the company’s AI that will meet the strict standards required for institutions that handle money, and which Cohere can later sell to other firms in the sector….
Enjoy! SBalley Team