1Mby1M Virtual Accelerator AI Investor Forum: With Investor Gus Tai (Part 2)

Sramana Mitra: So, coming back to entrepreneurship and investment in tech ventures, for the last 30 years that the venture capital industry has been active, as an industry, we have said services companies such as ad agencies, marketing agencies, IT services, legal services, architectural services, and wealth management services are not venture fundable companies. These are not scalable opportunities.

But human-centric AI and AI’s ability to really enhance a human being in doing some of the activities involving these services companies actually raises the question, should we start investing in these companies now?

Gus Tai: I think that we should look at those opportunities as an investor and also as an entrepreneur if the cost of providing those services comes down enough. I happen to believe that the competitive nature of the different platforms will result in inexpensive forms of basic types of services, which an entrepreneur can use to deliver these services. If you think about why services may now be possible, it’s because AI can provide the bespoke customization for entrepreneurs, whereas it was not efficient in a scalable way to do it in the past.

As you were mentioning this, I was thinking about marketplaces like Fiverr or others that provide services where individuals have needs and they partner with a person through a marketplace to provide that. Well, why wouldn’t AI be able to do much of what that person as a service provider could have done in the past? In fact, that would be part of a platform with more consistency in performance. So, I think there’ll be a lot of those types of opportunities and that would suit human-centric AI really well.

Sramana Mitra: Yes, I think this is a very good point that you raise about these Fiverr and Upwork kinds of platforms. So yes, there are tons of people doing jobs or functions that can be either automated with AI or enhanced by AI. In some ways, because of the human-centric AI concept, their expertise is still important and still relevant; it’s just that their expertise can become much augmented, much higher order, and they can service many more clients.

So I think there are actually a lot of small businesses, not just freelancers, but a lot of small businesses who have built to some size – maybe $1-$5 million dollars in revenue on those platforms. I think those companies can scale quite a bit. So, I think this is an interesting opportunity. If some of these companies can figure out more original ways of using AI and scaling their businesses, those would warrant discussions of investment as well, potentially. I do think there’s a whole class of companies that are becoming potentially worthy of investment considerations because of inserting AI into their workflows.

Gus Tai: Sramana, I very much agree with you. I’m in your camp of this philosophy of what is a sound business model. I also think it’s wonderful if a business model could be very capital efficient. When we think about a sound business model and the value proposition of product market/monetization fit, we could look at these models that weren’t effective because of the variability of service that needed to be provided and then look at the parts of the value chain.

With the progress of AI, if parts of the value chain can be done in an infinitely scalable way for basically free, how would the business model work, and then how would we redesign it with that knowledge? I just think that anything that touches people and involves coordination of people can be redesigned. Better business models can aggregate more value from that and benefit both the customer and the company.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator AI Investor Forum: With Investor Gus Tai
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