Analysis, forecasting, and thoughts on all things venture
Here's the data we're sharing with our portfolio companies as they develop 2023 annual plans.
With the bulk of 2022 behind us, attention now turns to planning for 2023. The topic of conversation in every boardroom is the corresponding tradeoffs between growth and burn. Check out the tool that we built that helps you understand how you compare with other companies. Stay tuned as we’ll also be publishing our 2023 Whisper Numbers later this month.
We are closely following the momentum of these overlapping but distinct trends. And to track our own work and share some of the knowledge we’ve accumulated, we’re introducing the Scale Generative AI Index, a list of nearly 200 companies in the space and details about what they’re building. We’ll keep adding to this market map as our research progresses.
We believe that in this moment of generative AI hype, nothing is more valuable than hearing directly from entrepreneurs and product leaders building in the Generative AI space. That’s why last month we hosted a panel with a group of entrepreneurs and AI practitioners to discuss the key challenges entrepreneurs are facing when it comes to building category-defining generative AI companies.
Since our inception, Scale Venture Partners has been on a mission to invest in the best entrepreneurs and support them as they build market-leading companies. And much like the companies we invest in, the team that's assembled to help accomplish the mission is the most important asset we have. In the 2 years following the announcement of Fund VII in 2020 we've spent considerable time and effort building the team. With today's announcement of Fund VIII, we are excited to announce several new promotions, the addition of new team members, and capabilities to our Scaling Platform.
Over the last few years, building an AI startup used to require “do-it-yourself AI,” which consisted of gathering training data, labeling it, architecting complex data transformations, tuning hyperparameters, and selecting the right model. It was a herculean task, similar in complexity to the workload of the Salesforce engineer above. But in the last year or two, foundation models have emerged as a time-saving shortcut that enable entrepreneurs to do more faster. These foundation models aren’t specific to particular AI use cases, but are largely general and have something to offer almost anyone. Entrepreneurs can now decouple parts of the training data and model (which comes pre-packaged in a foundation model) from the application layer, which we at Scale call a cognitive application.
Turns out, phones are quite good payment platforms. This poses a challenge for traditional consumer payments. Debit cards, credit cards, and other legacy payment methods are making way for Apple Pay, BNPL, QR code payments, Venmo, and Zelle — and that’s just in the U.S. Outside the U.S., super apps are beating Visa and Mastercard to the punch. China is a prime example, where WeChat and AliPay process more USD equivalent volume collectively than Visa.
Responding to the flow of venture advice
Writing this content is a desk worker’s low-skill labor, demanding little skill but lots of time. (The quality of GMail autocomplete, introduced in 2018, illustrates just how repetitive business writing is.) It’s this attractive target that makes Natural Language Generation (“NLG”) products so exciting, because this new technology has finally grokked the patterns interwoven in our prose.
NLG products are newly feasible, enabled by linguistic “transformer” models like GPT-3 from OpenAI and Jurassic-1 from AI21 Labs.
Though usage-based models are not new—having first been championed by AWS (2005) and Twilio (2008) — there’s been a notable increase in their adoption in recent years. This trend continues to accelerate as the landscape for usage-based models quickly evolves. Scale's Max Abram on the next frontier of Usage Based Billing Infrastructure.