VENTURING WITH

Good evening! Microsoft just unveiled one of the most sophisticated AI tools yet but it’s not my bet for the biggest win in AI. Elon is under fire at Twitter, Netflix has ads now, and layoffs are rolling across tech. Let’s dive in.

Was this email forwarded to you?

Subscribe Here

SPONSORED BY impact.com

I’ve said it twice and I’ll say it again — Affiliate Marketing is back!

And, it’s growing to become one of the most effective ways to build a consistent customer base and grow top line revenue. Especially for financial services companies.

impact.com has built one of the most effective platforms for starting and optimizing an affiliate marketing program.

To prove it, they wrote a free eBook with four different success stories about how Starling Bank, myFICO, Acorns, and Revolut all drove revenue growth through affiliate marketing.

Want to get started?

Check out their eBook

Every Company is an AI Company

OpenAI officially launches the Dall-E API, empowering anyone to add image and text generation directly into products.
With today’s open-source models and new APIs like this one adding AI to products is trivial. We’ll see image and text generation in every product soon.
Microsoft which invested $1B in Open AI in 2019 is also OpenAI’s first big customer with Designer, a new visual design tool built on Dall-E image generation.

Designer is the first polished tool we’ve seen built on image generation. It’s effectively Canva, if Cnava generated images and slides from scratch instead of giving you the building blocks to build them yourself.

Moats?

Most of today’s AI products are built on incredibly complex models but are actually very simple to implement. For example, adding the OpenAI API to your product only takes three lines of code. That means that 1) we’re going to see a ton of experimentation come out of AI and 2) anything that works will be rapidly copied.

As AI features roll out in every product, will startups be able to hold early leads or will they lose to big incumbents with near-infinite resources, like Microsoft?

At the same time, companies at the algorithm layer like OpenAI will have to contend with competitors building their own models. That’s already kicked off an arms race for models.

Ultimately though, if you think of a moat as how difficult something is for other businesses to replicate, I think the most defensible products will come from the most boring of places.

Image generation for consumers will be a competitive bloodbath. But things like AI to read and generate legal briefs? Or auto-maintenance of a company’s code-base? Or anything in insurance? That’s where I would look for the next unicorns.

The End of the Blue Checks

Elon Musk announced an $8 subscription plan for Twitter early this week
The subscription will grant users access to a bevy of new features along with the notorious blue checks
At the same time activists claim hate speech on the platform has skyrocketed (although evidence is scant) and advertisers have pulled funding from the platform

Status Erased

Twitter holds a strange amount of influence in specific industries like journalism, politics, and to a lesser degree, tech.

Snapchat has 363M daily active users (DAUs). Twitter only has ~217M DAUs. Yet nobody cares what Evan Spiegel is working on at Snap.

Twitter is unique because it’s always been used as a megaphone for the established in a way that other platforms have not.

But as of this week, celebrities, politicians, reporters, and other verified users on Twitter will see their blue checks disappear. If they don’t start paying $8 a month for premium Twitter.

Even worse, those blue checks — a status symbol on the platform because they’re notoriously hard to get — will now be handed out to everyone who signs up for Twitter’s new subscription.

As you can imagine, the existing blue checks are furious.

It's Not Really About Checks: In addition to blue checks, the subscription will grant users priority features and fund a new payout system for creators on Twitter. Elon also hinted at bundling news into subscriptions and enabling micropayments to creators in exchange for content.

Note: Micropayments are widely popular and widely used in China. 40% of users on Tencent Music pay to tip musicians. It’s strange that no major US platform uses them, except maybe TikTok for its live streaming, although that makes sense given TikTok’s provenance.

Tweets Under Fire

Elon’s detractors claim the erasure of verification is an attack on experts. They argue that without the blue checkmark it will be impossible to tell who is real and what information is legitimate.

Note: The ‘Who is real?’ question is being addressed with other kinds of verification.

Elon and his supporters argue that ‘the experts’ should not get to decide what information is legitimate. Who decided they should be verified? Why not their ideological opponents?

Both sides have a point but the more interesting point is the tangible impact it’s already having on Twitter’s financials.

Earlier today, Elon confirmed rumors that spooked advertisers are leaving the platform en masse.

TLDR

It’s early days for Elon’s Twitter but it’s already clear it won’t be the Twitter we all know and love — or love to hate. Best case, it becomes a new kind of social product with Tweets at the core but not the sole product of the company. Worst case… I try not to think about it.

Attacks by Twitter’s current power users aren’t great for the brand but if anything it enforces that whatever comes next will need to be drastically different if the company is to succeed.

EXTRA! EXTRA!

News

Layoffs are rolling in at Lyft, Meta, Stripe, Coinbase, and Robinhood. Lyft laid off 13%, Stripe laid off 14%, and Facebook is rumored to be laying off 15%. Amazon has frozen hiring through the rest of the year.

Elon Musk has started mass layoffs at Twitter. CNN reports layoffs in departments including ethical AI, marketing and communication, search, public policy, wellness, and curation. No word on product or engineering yet though…

Substack is adding Twitter-esque features in a bid to win over users post-acquisition.

TikTok confirmed that user data in the EU can be accessed by TikTok employees in China… because of course it can. Bytedance is a Chinese company.

China is sending monkeys up to their new space station to see what happens when they try to reproduce in zero-g. So... I thought I had a joke for this?

Netflix officially launched its new ad tier for $6.99 per month. Personally, I’m skeptical that this will drive new subscriptions. If you weren’t going to subscribe for $9.99/month is $3 off but with ads really going to make a difference?

VC FUNDING

Apex Space

Raise: $7.5M Seed from Andreessen Horowitz

One Liner: Off-the shelf satellites for the space industry

Buying satellites to send into space is a challenge right now. Demand has jumped as access has increased but the satellites themselves are still hard to come by. Sure you can buy the Ferraris of satellites, you can have one commissioned, and some people even build their own from scratch like a custom stock car. But the Toyota Camry of satellites? The off-the-shelf, affordable, simple satellite workable for the 99% of Uber drivers? That kind of satellite doesn’t exist yet.

Enter Apex Space. Cheap, reliable, off-the-shelf satellites at scale.

Or at least that’s the vision. The question is demand. With SpaceX sending two missions into space a week and perfecting reusable rockets that fall out of the sky, launch costs are hitting all-time lows. At only $1,500 per kilo to get into orbit will more companies start operating in space? Will new use cases emerge to make life better down here on earth? If yes, it makes sense to start building satellites at scale. If not… Well, we’ll see how Apex fares.

Fantastic graph from Aerospace.org mapping the costs of launching rockets into space. Those two blue circles in the bottom right corner are SpaceX’s Falcon 9 and Falcon Heavy.

Descript

Raise: Undisclosed amount at a $550M valuation

Investors: OpenAI the text AI heavyweight

One Liner: AI-powered audio & video editing

Descript is one of my favorite products and evidently they’ve built more AI than I realized.

Descript started as an audio editor but instead of editing audio, you can edit the text transcription just like a Word doc. When I started using it, it felt like a truly magical product and I could not have started the Just Raised Podcast without it.

They’ve also done a lot of work behind the scenes to make AI voices. For instance, I can write text in a Descript audio file and have it spit out audio that sounds just like me. That seems to have piqued OpenAI’s interest maybe to add voices to their existing image and text generation.

ONE FUN THING

AI playlists are definitely coming.