00:30:39 · Guillaume Moubeche
[00:30:39] S1: That is really cool. And to your point with referral system, actually, when I first launched the referral system, same using, like, one of the most famous platform out there, I actually, like, I went on a vacation, and I typed like the name of our company online, and then I saw an ads, and I wasn't doing actually like any Google Ads at the time. So I was like, how come... So I reached out to someone in marketing, and I was like, when did we start like doing ads? I thought we were not doing this thing, no, no, no, no, we're not. And then I looked at it, and I could see like the, you know, in the URL, the ref code of the affiliates, and when I went back, you know, to the affiliate program, I had seen that in the last six months, whenever my head of marketing was reporting to me that the ref road program was working really well, that it was basically linked to our growth, etcetera, I was super excited, and realized that one partner was making the most of his money by just like buying our name on AdWords, and just, yeah. So in the end, stopped it, but again, I think when it's done in the right way, you can definitely get like some amazing results. And I think you wrote on your blog, that is actually, it's a really cool blog, like, about finding your niche in AI. Like, how how... What's what's different versus what happened in the past, and how would you frame it, you know, like, for people trying to find a niche with with this new technology?
00:32:17 · Sandy Diao, Guillaume Moubeche
[00:32:17] S0: Yeah. And are you referring more to finding your niches in the right type of product or feature to build, or more so how to use AI in your existing workflows? [00:32:26] S1: I think, like, whenever you you want to find a niche, you know, for for your product and... Or in the new features that you want to develop.
00:32:34 · Sandy Diao
[00:32:34] S0: Mhmm. Yeah. I think a lot of the startups I've advised in the last few years, especially when they're building AI native products from scratch, one of their biggest challenges is trying to figure out if they go very, very, like, narrow and horizontal and go after a very, very specific persona. And that tends to be the easiest in terms of shaking up the product road map, or they go very horizontal. So they try to build something that has, you know, unlimited use cases. Right? And they're like, you know, sky's the limit with AI tools and features, and we just want users to be able to be creative and do whatever they want. It's always, you know, this this very tricky balance. Because on one hand, if you build something that's very narrow, you firstly get called a wrapper. And then secondarily, becomes very hard to remain competitive, especially as, you know, more of the general purpose models can essentially tackle many of and probably all of the tasks that exist out there today. And then on the other hand, if you build the really, really broad product, the challenge is you're not gonna be better for the most part than foundational models, and you have to essentially figure out how to win that market. So it's this very hard question to answer. I I will say this about, you know, sort of figuring all of that out. I I think that what I've learned is it feels that TAM is virtually infinite here. I don't mean that in the sense that the number of people on the planet is skyrocketing or growing. In fact, there's a little bit of a reversion on that number. But instead, I mean more so that people have two distinct behaviors that I think are worth tapping into. One of them is that switching costs are relatively low from tool to tool. Meaning that if you are building better experience, the better design experience, the brand that people trust more, you can still win in the grand scheme of things. And then I think the second thing to note is when you're trying to sell the product itself, people are willing to use more than one tool for the problems that they're solving. So it's this idea that even though you see maybe a foundation model doing something really well, you can actually still get a mark there if you can solve it better for them in like one corner of the universe or one specific area.
00:34:41 · Sandy Diao
Like, one example is one of the companies that I that I advise or work with is called TeachShare. They help teachers or educators of any traditional or untraditional kind create educational curriculum. And generating this content, sure, you could do it with GPTE. You could do it with Claude. You could do it with any foundational model. But what they add on top of it is this design experience where all the variables that you need to think about, like, what is the grade level? What is the level comprehension? What is the format? Is it, you know, more image based? Is it tracing based? Is it text based? Is it more comprehension based? All these factors are basically, like, packaged neatly for you so that as the educator, you don't need to think about all these different factors. And then it makes it also easy for you to be able to keep up to date and edit and come back to your repository of the content that you're creating. So I think, you know, regardless of what it is that you're building, I think that some of the factors of building for a market still remain true, meaning that you wanna go for product market fit, meaning that you wanna make sure your product is serving a market, look for the classic signals thereof, are these users retaining? And then, you know, ultimately, try to figure out a distribution channel that fits that as well. So can I sustainably, for example, with TeachShare grow in the teacher and educator segments? And do I have channels that show me that that is working? So, you know, kind of in my in my view there, I think that TAM is very large. People are willing to use multiple tools, and just because the foundation model is building for this use case doesn't mean that you cannot tackle that yourself as a foe.
00:36:19 · Guillaume Moubeche, Sandy Diao
[00:36:19] S1: And to build upon your point, I think, like, for the company you mentioned, I think what's interesting also is, like, not only they have, like, the package design, and they simplified a lot the experience for the end users, so there is a lot of additional value, but I assume that in the way they build their products, because they leverage all these new models, when the models get better, the product experience also get better, which means that they are not like, you know, fighting existing models. They just can leverage the improvements to bring even more value to their end users. [00:36:57] S0: Exactly. The... As the models get better, you're right. The product experience gets better, so you're not having this existential threat of, I get outcompeted because the foundational models themselves, like, outperform my product itself. In fact, my product has the actual data points as well of teachers and educators creating content. And therefore, the way that, my evals are set up, I'm actually actually gonna have a net better product and output than even a foundational model with far less context on a specific use case.
00:36:57 · Sandy Diao, Guillaume Moubeche
[00:36:57] S0: Exactly. The... As the models get better, you're right. The product experience gets better, so you're not having this existential threat of, I get outcompeted because the foundational models themselves, like, outperform my product itself. In fact, my product has the actual data points as well of teachers and educators creating content. And therefore, the way that, my evals are set up, I'm actually actually gonna have a net better product and output than even a foundational model with far less context on a specific use case. [00:37:25] S1: Definitely. No. That's really interesting. And you mentioned, like, to look at the retention, and also that people, you know, like, have lower and lower switching costs. Now that with AI, you know, you... A lot of people feel that they can build everything they want, and in a very quick way, even though it's it's more complex than this, actually, but eventually it might get there over time. Like, do you think about AI and retention, and what are the things that you would focus on to make sure that your retention doesn't go to zero with the the switching costs, you know?