Full-Stack AI Startups

Hey everyone,

Welcome back to Stocks To Space, where I curate the best ideas, tools and resources I’ve found each week as I explore my curiosities.

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IDEAS
Full-Stack AI Startups

A new type of AI startup will emerge in the next 12 months.

It will completely flip the script on the existing playbook for building AI startups.

This AI startup will be truly AI-first. It will continue to ride the wave of exponentially improving large language models (LLMs). And it will have to swim upstream in its respective industry just to survive because of the vested interests trying to kill it.

They will be known as ‘full-stack’ AI startups.

But what exactly is this new type of startup? Using the accounting industry as an example, we’ll define it by what it is not.

Suppose you believe LLMs are now able to automate a lot of accounting work.

There are two things you might do with that insight:

1. You could build an AI agent and sell it to accounting firms. This is what most founders are doing.

2. Or, you could start your own accounting firm, staff it with AI agents and directly compete with the existing accounting firms.

The second option is what it means to go ‘full-stack.’

This could be applied to any industry, especially ones dominated by slow-moving incumbents.

Instead of selling to the dinosaurs, you could simply beat them at their own game.

INSIGHTS
1 Chart

OpenAI has >80% market share in US

Data out from Ramp reveals something truly startling about OpenAI and ChatGPT’s dominance in the AI market.

Drawing insights from 30,000 US businesses’ corporate spending patterns, Ramp’s AI index proves OpenAI has a stranglehold on AI subscription revenue in the US.

Since, the US accounts for half of AI app revenue generation, this really matters.

This highlights the monopoly principle in emerging technology industries—Google has >90% share of search (for now), Meta has >63% share of the social media market.

This also shows how much of a household name ChatGPT has become since its launch in November 2022, and how much that mattered in the race to take AI mainstream.

1 Post

1 Video

THOUGHTS
Quote I’m Pondering

“One of the things I think is true for any startup is that you have to keep proving yourself. Every single insight that we have is a depreciating insight. That’s why I’m okay with a lot of our insights being wrong. If we don’t continually have insights that we are executing on, we are just slowly dying.”

— Varun Mohan, CEO of Windsurf (who just got acquired by OpenAI for $3B)

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Thanks for reading,

— Luca

P.S. If the Catholic Church were a startup…