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July 24, 2024 • 1hr 3min
10 AI Business Ideas From The Queen of AI ft. Sarah Guo
My First Million
In this episode of My First Million, hosts Sam Parr and Shaan Puri talk to Sarah Guo, an AI-focused venture capitalist, about the AI ideas she thinks could become billion-dollar businesses. They discuss various AI startup opportunities, from niche applications to infrastructure plays, and explore how entrepreneurs can leverage AI capabilities to build successful companies.
10 AI Business Ideas From The Queen of AI ft. Sarah Guo
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Key Takeaways
- AI is creating new opportunities for entrepreneurs to build million-dollar businesses by leveraging powerful AI models for niche applications
- Distribution and marketing skills are crucial for success with AI startups, not just technical AI expertise
- Some fast-growing AI startup areas include:
- AI companions and chatbots
- AI-generated video avatars
- AI for e-commerce automation
- AI for voice automation and phone agents
- AI for personalized writing assistance
- The AI revolution is creating massive opportunities in chips, data centers, energy storage and other infrastructure to support AI computing needs
- San Francisco remains a key hub for AI startups and talent, with a community of optimistic and ambitious entrepreneurs
- There are both utopian and dystopian potential futures with AI - the guests are more focused on realizing the positive potential than worrying about doomsday scenarios
Introduction
In this episode of My First Million, hosts Sam Parr and Shaan Puri talk to Sarah Guo, an AI-focused venture capitalist, about the AI ideas she thinks could become billion-dollar businesses. They discuss various AI startup opportunities, from niche applications to infrastructure plays, and explore how entrepreneurs can leverage AI capabilities to build successful companies.
Topics Discussed
AI Companions and Chatbots (4:00)
Sarah discusses the growing market for AI companions and chatbots, highlighting their potential as a business opportunity:
- Companies like Replika and Character.ai are seeing massive user engagement, with people spending hours interacting with AI companions
- Character.ai reportedly has 310 million monthly unique visitors, showcasing the huge demand for these services
- "I think people want companions. This is what I'm saying, that the engagement characteristics around this stuff is real," says Sarah
- Even small, niche AI companion apps can generate millions in revenue for individual entrepreneurs
AI-Generated Video Avatars (16:00)
The group discusses HeyGen, a company creating AI-generated video avatars:
- HeyGen allows users to create lifelike video avatars of themselves for various business use cases
- The company has reached tens of millions in revenue without spending on paid marketing
- Use cases include training videos, customer intros, and scaling content creation for influencers and businesses
- "If the marginal cost of more time of Sam talking is free, like, you probably do more with it, right? And I think that's just what people are discovering," Sarah explains
AI for E-commerce Automation (27:00)
The hosts and Sarah discuss the potential for AI to automate various aspects of e-commerce:
- AI could handle tasks like creating store listings, adjusting prices, and writing product descriptions
- This automation could make it easier for entrepreneurs to focus on core business decisions rather than time-consuming operational tasks
- Sarah suggests this fits into a larger theme of AI taking over skills that aren't core to an entrepreneur's vision or product
AI for Voice Automation and Phone Agents (32:00)
The group explores the potential for AI-powered voice agents to transform customer service and lead generation:
- AI voice agents could answer phones for small businesses, handling basic inquiries and scheduling
- This technology could be particularly valuable for service providers, SMBs, and restaurants
- Shaan demonstrates a prototype he built using Bland.AI for his recruiting business
- "I think there are going to be a bunch of interesting voice services for everything from restaurants to HVAC companies to dental reception that are just like, answer the phone," Sarah predicts
AI for Personalized Writing Assistance (38:00)
Sarah discusses the potential for AI to provide more personalized writing assistance:
- Future AI writing tools could learn a user's specific voice and style to provide more tailored assistance
- This goes beyond current autocomplete or grammar checking to actually mimicking the user's writing style
- Sarah suggests this could be particularly valuable for email and business communication
Software 3.0 and AI Infrastructure Opportunities (40:00)
Sarah explains her concept of "Software 3.0" and discusses opportunities in AI infrastructure:
- Software 3.0 involves manipulating foundation models rather than building from scratch or labeling massive datasets
- There are huge opportunities in chips, memory, bandwidth, networking, and energy storage to support AI computing needs
- Sarah estimates "trillions of dollars of value at stake" in reimagining data centers for AI workloads
- "If you just reimagine the entire data center around, like, big AI inference, I think you end up with, like, totally different needs," Sarah explains
AI in Healthcare and Other Industries (42:00)
Sarah discusses her changing views on AI opportunities in healthcare and other industries:
- She previously avoided healthcare investments due to slow adoption and misaligned incentives
- Now, Sarah sees opportunities in healthcare administration automation, such as billing, authorization, and claims processing
- She suggests looking for areas where work has already been outsourced, as these may be ripe for AI automation
- "What parts of work have been outsourced services already? ... if you can create separation of that work already to outsource it, then maybe you can outsource it to a machine as well," Sarah advises
AI's Impact and Potential Futures (52:00)
The group discusses potential positive and negative outcomes of the AI revolution:
- Sarah is more focused on near-term, tangible risks like misinformation and fraud rather than speculative doomsday scenarios
- She sees huge potential for AI to improve education, healthcare, and government services
- Sarah believes the future with AI is likely to be "bimodal" - either much better or much worse than current predictions
- "I think of the probability of a bad scenario. I said was like, it is possible. I can't see exactly how we get there. And if you ask me, like, what are the reasons in which broad use of cheap intelligence are going to be great, I can give you so many reasons," Sarah explains
San Francisco as an AI Hub (56:30)
The hosts and Sarah discuss San Francisco's role as a hub for AI startups and talent:
- San Francisco provides a community of optimistic, ambitious entrepreneurs working on cutting-edge AI projects
- Being around other AI-focused individuals can provide inspiration and education
- Sarah's firm runs a grant program called Embed to foster this type of community
- "If you're 22 and you're young and single and you're into the s**t, I would just say two words. I would say, go west. Go west, young man," Sam advises
Conclusion
This episode of My First Million provides a comprehensive overview of the current AI startup landscape and the immense opportunities available to entrepreneurs. Sarah Guo offers valuable insights into various AI applications that could become billion-dollar businesses, from consumer-facing products like AI companions to infrastructure plays reimagining data centers for AI workloads.
The discussion highlights the importance of distribution and marketing skills in addition to technical expertise when building AI startups. It also emphasizes the potential for AI to transform industries like healthcare, education, and e-commerce by automating tasks and providing personalized experiences.
While acknowledging potential risks and challenges, the overall tone is optimistic about AI's potential to create value and improve various aspects of business and society. The episode encourages entrepreneurs, particularly young and ambitious individuals, to explore AI-related opportunities and consider San Francisco as a hub for innovation in this space.