Another counter is that the platform and tech may not be in a mature enough end-state. There was a prior rush to build for the GPT store and integrations (Wolfram, Khan, Airbnb, one of the travel booking groups) and the twofold questions are 1) how much of this drove OpenAI user and revenue growth vs organic free to paid (plus or pro) and enterprise and 2) did anyone manage to capture value (right now it feels like only platforms with some existing awareness or brand, e.g., through AEO AI engine optimization get some runoff re gpt as search… how smaller players play here will be interesting)
Yea agree GPTs was too early. So was plugins. It’s possible I’m wrong on the timing. But I’m very confident the cycle will repeat.
I think the difference this time is there is more knowledge about the moat. It’s clear context and memory make for a much better output and user experience. Better outputs drive more usage.
The competitive environment is also at a different point which forces the players to focus on moats and escape velocity. Google and Meta are now in the mix where as when GPTs came out they weren’t.
Thought provoking to say the least. Along the line of your prediction, as an end user who want to maintain model-agnostic or minimize dependency on single model provider, will it then suggest that we should all download and run the model(s) locally? That way we can ensure the ownership and maintain portability of our prompt history and event logs?
There are some startups trying to attack the problem that would make your memory portable. Things like Mem0.ai. But otherwise, I think the number of people that will want to run models locally is quite small. Especially as the capabilities of the applications on top of the models in these platforms grow.
What this post doesn't see is that those platforms by closing for control ended up destroying their growth. "You can NEVER go against your customers and win" is a rule of life and business. Facebook is hated, Apple is hated due to so many bad monopolistic and disloyal practices. I would never buy Apple for example. They could be much larger than they are if they hadn't destroyed their reputation with so many people. They are large companies IN SPITE of doing those things, not because of doing them.
The "don't be evil" Google now has a horrible reputation. The example is not Facebook, Apple or Microsoft (hated, but now is more open and growing faster); it's Elon Musk. The richest man in the world and still growing because he bases his projects in values and helping humanity (believe him or not), not leaching from his customers. And he will keep growing, taking over a whole planet.
It's extremely bad advice to tell people to follow those terrible companies. The ones that don't EVER go against their customers and base their growth in rock solid values, like Elon, are the ones taking over in the future. With a world so transparent as it is today with social networks, reputation is everything. You can't lie anymore.
Your hypothesis on Facebook, Apple, and Google can be applied to Elon, too.
Open up your surroundings, and pay attention to how many people actively hate Elon Musk. Even if you disagree with their hate, many people would disagree with Apple's hate or Google's.
It's so fascinating to see consumer platforms fail the marshmallow test with building trustable platforms for developers while in B2B these platforms seem a lot more stable for developers e.g. Microsoft, Salesforce, Shopify, Wordpress. There are huge companies built on top of all of these platforms that have never had the screws tightened on them by the platform over time.
I'm not as familiar with Microsoft + Salesforce platforms. I think one thing that is distinct about the ones you mention vs the ones that we see go through the cycle is that they don't really provide an organic distribution mechanism as part of the platform value in the way that Facebook, LinkedIn, Google did. There is some spectrum here on what type of value the platform provides. But that's for another post.
I guess their impressions aren't as large, but I do think there is a lot of search and promo on some of those platforms for solutions e.g. shipping, email marketing for Shopify. But I don't know how much of Klaviyo or Shippo's reach is organic from Shopify's platform vs. marketing to those users.
Great points and discussion @casey winters and @brian Balfour. Question is How much of OpenAI will they continue to drive toward a distribution / search intent value capture platform vs a productivity platform… (the Microsoft Salesforce Shopify etc examples Casey posed) and can they coexist in the same underlying platform?
The B2B platforms you mentioned are subscription businesses, meaning the more value the developers provide, the more subscriptions and retention the platform gets. Chatgpt is also subscription (I think), but is that the right business model? My guess is no given Brian's thesis.
I'd also love a deep dive into Amazon because they have their history with third party sellers.
I would think the "everything else" is where the defensible moat lies because that's where we'll need Memory.
"Search" is a red ocean. I think of llms as "answer engines" rather than search. And every marketer I'm talking to is trying to figure out how to switch from search to becoming the answer. But I love your article because it really is about distribution, not about search.
This is an insightful read.
Another counter is that the platform and tech may not be in a mature enough end-state. There was a prior rush to build for the GPT store and integrations (Wolfram, Khan, Airbnb, one of the travel booking groups) and the twofold questions are 1) how much of this drove OpenAI user and revenue growth vs organic free to paid (plus or pro) and enterprise and 2) did anyone manage to capture value (right now it feels like only platforms with some existing awareness or brand, e.g., through AEO AI engine optimization get some runoff re gpt as search… how smaller players play here will be interesting)
Yea agree GPTs was too early. So was plugins. It’s possible I’m wrong on the timing. But I’m very confident the cycle will repeat.
I think the difference this time is there is more knowledge about the moat. It’s clear context and memory make for a much better output and user experience. Better outputs drive more usage.
The competitive environment is also at a different point which forces the players to focus on moats and escape velocity. Google and Meta are now in the mix where as when GPTs came out they weren’t.
Thought provoking to say the least. Along the line of your prediction, as an end user who want to maintain model-agnostic or minimize dependency on single model provider, will it then suggest that we should all download and run the model(s) locally? That way we can ensure the ownership and maintain portability of our prompt history and event logs?
There are some startups trying to attack the problem that would make your memory portable. Things like Mem0.ai. But otherwise, I think the number of people that will want to run models locally is quite small. Especially as the capabilities of the applications on top of the models in these platforms grow.
What this post doesn't see is that those platforms by closing for control ended up destroying their growth. "You can NEVER go against your customers and win" is a rule of life and business. Facebook is hated, Apple is hated due to so many bad monopolistic and disloyal practices. I would never buy Apple for example. They could be much larger than they are if they hadn't destroyed their reputation with so many people. They are large companies IN SPITE of doing those things, not because of doing them.
The "don't be evil" Google now has a horrible reputation. The example is not Facebook, Apple or Microsoft (hated, but now is more open and growing faster); it's Elon Musk. The richest man in the world and still growing because he bases his projects in values and helping humanity (believe him or not), not leaching from his customers. And he will keep growing, taking over a whole planet.
It's extremely bad advice to tell people to follow those terrible companies. The ones that don't EVER go against their customers and base their growth in rock solid values, like Elon, are the ones taking over in the future. With a world so transparent as it is today with social networks, reputation is everything. You can't lie anymore.
Your hypothesis on Facebook, Apple, and Google can be applied to Elon, too.
Open up your surroundings, and pay attention to how many people actively hate Elon Musk. Even if you disagree with their hate, many people would disagree with Apple's hate or Google's.
Gold! 👏
Anatomy of a Death Foretold’
It's so fascinating to see consumer platforms fail the marshmallow test with building trustable platforms for developers while in B2B these platforms seem a lot more stable for developers e.g. Microsoft, Salesforce, Shopify, Wordpress. There are huge companies built on top of all of these platforms that have never had the screws tightened on them by the platform over time.
I'm not as familiar with Microsoft + Salesforce platforms. I think one thing that is distinct about the ones you mention vs the ones that we see go through the cycle is that they don't really provide an organic distribution mechanism as part of the platform value in the way that Facebook, LinkedIn, Google did. There is some spectrum here on what type of value the platform provides. But that's for another post.
I guess their impressions aren't as large, but I do think there is a lot of search and promo on some of those platforms for solutions e.g. shipping, email marketing for Shopify. But I don't know how much of Klaviyo or Shippo's reach is organic from Shopify's platform vs. marketing to those users.
Yeah, good point. From what I understand of folks like Klaviyo and Gorgias is that a very small percent was organic. But could be wrong.
Great points and discussion @casey winters and @brian Balfour. Question is How much of OpenAI will they continue to drive toward a distribution / search intent value capture platform vs a productivity platform… (the Microsoft Salesforce Shopify etc examples Casey posed) and can they coexist in the same underlying platform?
The B2B platforms you mentioned are subscription businesses, meaning the more value the developers provide, the more subscriptions and retention the platform gets. Chatgpt is also subscription (I think), but is that the right business model? My guess is no given Brian's thesis.
I'd also love a deep dive into Amazon because they have their history with third party sellers.
Yeah good point. I think right now ChatGPT has two businesses and each could be a distribution platform.
ChatGPT Search...which I do think will be ad supported.
Then everything else in ChatGPT which I think will likely be subscription supported and have consumer, business, enterprise tiers.
I would think the "everything else" is where the defensible moat lies because that's where we'll need Memory.
"Search" is a red ocean. I think of llms as "answer engines" rather than search. And every marketer I'm talking to is trying to figure out how to switch from search to becoming the answer. But I love your article because it really is about distribution, not about search.