Is ChatGPT the next big bootstrapper opportunity?

Lately, I've been getting an increasing number of DMs from founders trying to launch new products built on top of ChatGPT.

They ask me for my advice, and honestly, I don't know what to tell them.

Justin Jackson

@mijustin

I don't think ChatGPT will enable indie startups to launch profitable businesses.

In most cases, AI/ChatGPT will be added as a feature in existing apps; no need for an intermediary stand-alone product.

In the "ChatGPT value chain," OpenAI will accrue most of the revenue.

March 23rd 2023

Retweets

236

Likes

I'm not convinced that ChatGPT is going to be the platform that a wave of new indie startups will be built on top of.

I'm not saying that tools like ChatGPT can't be helpful assistants.

But it seems increasingly unlikely that new software products that have "X powered by AI" as their main value prop will succeed long-term.

The first problem is that many of these new AI-driven products are similar to one another. I've already see many "AI-driven transcriptions for podcasts" products. AI software that writes your tweets and blog posts also seems popular.

Differentiation and acquisition for these products will be challenging (especially since every day, there seems to be a new competitor launching).

But the biggest risk for ChatGPT-enabled apps is that existing products (Microsoft Office, Descript, Google Sheets, Zapier) are just implementing these features directly into their apps.

It's surprising how fast mature companies like Microsoft have been able to incorporate AI/ChatGPT as features in their existing apps. This greatly diminishes the need for intermediary products (often built by indie founders and bootstrappers).

This dynamic has become even more potent with the launch of OpenAI's new plugin directory:

Aaron Yang

@IAmAaronYang

With @OpenAI moving up the stack into integrations and plugins, they basically killed half of LLM infra startups that were focusing on on that part of the stack. 

Startups need to rethink where they can build without being disrupted by the foundation model providers.

March 24th 2023

Retweets

Likes

In the "ChatGPT value chain," OpenAI will accrue most of the revenue.

I talk more about how "the main thing" often gets most of the revenue in a value chain here:
https://justinjackson.ca/the-main-thing

I see this happening with ChatGPT (the main thing) and many of the startups being launched (most are "side dishes").

I'm writing this mostly as a warning. I know a lot of indie founders are hopeful that AI is the next big platform that will produce the next wave of bootstrapped startups (similar to the iOS store, Shopify store, etc).

I do think that there will be opportunities for established bootstrapped startups, who already have strong customer base, to incorporate AI into their products.

And, everyone can benefit from AI-assisted coding, problem solving, outline writing.

But it seems, with AI, I think most of the upside is going to go to big companies (and especially to OpenAI).

(For more on this, check out Arvid and Tyler's episode)

Cheers,
Justin Jackson

PS: I continue to be concerned about AI, and that the pace of its development will outpace our ability to consider the ethics and ramifications on society.

If you're excited about AI, I'd urge you to check out some of the warnings being issued from long-time AI researchers:

On Twitter, I recommend following Professor Emily Bender
Dr. Stuart Russell (UC Berkeley): Are we living in an AGI world?
Gary Marcus: GPT-4’s successes, and GPT-4’s failures
Dr. Stuart Russell: How to get AI right
Gary Marcus: Deep Learning Is Hitting a Wall
Interview with Gary Marcus and Dr. Stuart Russell
Dan Shipper: Awe, Anxiety, and AI

PPS: I have some exciting Transistor news to announce soon. 👀

Suite 1, 3000-30th Street, Vernon, BC V1T 2C1
Not getting what you need? Unsubscribe

Key phrases

many AIdriven transcriptions foundation model providers STRONG CUSTOMER BASE Professor Emily Bender Dr Stuart Russell exciting Transistor news new plugin directory intermediary standalone product fast mature companies LLM infra startups Justin Jackson PS main value prop new AIdriven products longtime AI researchers new software products next big platform ChatGPT value chain new indie startups

Older messages

Price that product

Saturday, March 18, 2023

hey, here's a few thoughts from today A few weeks ago I told you about my friend Val, who was considering new pricing for his product Blogstatic. I said, "before you can determine which

Update on this marketing experiment

Sunday, March 12, 2023

hey, here's a few thoughts from today As I've mentioned previously, I've contracted Josh Anderton to help update Transistor's marketing site. I think some of the stuff we've worked

Val’s pricing conundrum

Wednesday, March 8, 2023

hey, here's a few thoughts from today Choosing a price for your software is one of the hardest decisions you can make. Changing prices after you've launched is even harder. I was recently

"What happened with you last year?"

Saturday, January 28, 2023

(my 2022 year in review) ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Building this in public

Saturday, January 21, 2023

hey, here's a few thoughts from today Before the holidays, I got lots of advice from you on improving the search rank for Transistor's "How to start a podcast" page. I wanted to do a

Today's Digest: Waging war on LTDs (Lifetime Deals)

Friday, June 2, 2023

Your Indie Hackers community digest for June 2nd ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

How you should be thinking about your relationship to social media

Friday, June 2, 2023

Plus, algorithms exposed, the short-form video battle heats up, and more! ‌ ‌ ‌ Image Hey folks👋🏽 I blinked and now we're in June. Happy June! I've noticed an interesting conversation about why

Issue#90: Building $1K-$10K MRR Micro SaaS Products around Sales

Friday, June 2, 2023

Welcome to the 163 new subscribers who joined this week. Today our Micro SaaS HQ ecosystem is one of the biggest ecosystem exclusively meant for Micro SaaS builders/founders. 👉 The report you're

Biggest summer sale of 2023

Friday, June 2, 2023

plus powerful motivation Hi , One of my most powerful entrepreneurial lessons came when I was pursuing my first job—at McDonald's. After getting turned down at one location, I dropped off my resume

10words: Top picks from this week

Friday, June 2, 2023

Today's projects: Hoogly • Remove Online Information • MailVibes • Stacks • Passdropit • Habit Tracker To-Do • Chestr • BigDevSoon • MaxGiving • Recruiter Feed • EAGLE IPTV • Open For Ads • Micro

Why Entrepreneurs are Choosing 'Short-Lived Businesses' Over 'Forever Businesses — The Bootstrapped Founder 219

Friday, June 2, 2023

We have "starter homes." What about "starter businesses?" ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

What working at Figma taught me about customer obsession

Friday, June 2, 2023

VP of Product Sho Kuwamoto on the importance of feel, service, and customer support ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

How Much More Efficient Should a SaaS Startup Be When Using AI?

Friday, June 2, 2023

Tomasz Tunguz Venture Capitalist If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here. How Much More Efficient Should a SaaS Startup Be When Using AI?

Bundle of riches

Friday, June 2, 2023

Keeping it lean with contractor-only models ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Wordpress versus Substack, VW's buzzy bus, and Fidelity slashes away at valuations

Friday, June 2, 2023

View in browser Top News Hundreds of Amazon staff members walked off the job yesterday afternoon demanding a flexible remote work policy and renewed commitments to reducing carbon emissions to zero. “