A few venture capitalists are experts in machine learning or building deep learning frameworks, but most are very good at unit economics.
That’s why they have a laser focus on the generative AI technology stack.
Whether it’s infrastructure, middleware, applications, or something else, investors are looking for founders who can dig defensible moats and take control.
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“The real value proposition for AI companies now lies not only within the models, but also often in the underlying datasets,” according to Leonard Wossnig, CTO at biopharma startup LabGenius.
Because of a “perceived lack of substantive differentiation,” he says, these models are “rapidly becoming commodities.”
In this TC+ column, he presents questions that will help non-technical venture capitalists gauge a company’s “data quality.” . . “And what can go wrong if the data isn’t scratch-ready,” along with frameworks that explain how each layer in the stack creates value.
Don’t let the title fool you: If you work inside an early-stage AI startup, you need to know what angles of attack investors are likely to take when examining your pitch for flaws.
The TechCrunch Disrupt 2023 event ended yesterday, and of all the events I’ve attended since I’ve worked here, this was my favorite.
I’ve moderated three investor panels, hosted a Q&A with TC+ columnist Sophie Alcorn, and had the great pleasure of meeting and speaking with dozens of early-stage founders in the halls of the Moscone Center.
We’re all still collectively catching our breath as my coworkers travel to places like Pittsburgh, Paris, and Providence, but stay tuned next week for our recaps from Disrupt.
We discovered a lot of actionable business information and had some fun along the way.
Cheers,
Walter Thompson
Managing Editor, TechCrunch+
@your protagonist
How to spend your first $10,000 on paid advertising
In his latest TC+ column, growth marketer Jonathan Martinez delved into a topic every startup faces at some point: how to budget for your first paid marketing campaign.
Starting with a hypothetical budget of $10,000, Martinez answers the following questions:
- What channels should startups leverage?
- How should a budget be created?
- Which tests are most important in the early stages?
“In the early days of your startup, it’s important to be as efficient as possible, not only with your $10,000 budget, but also with your time,” he writes.
Instead of setting an LLM as your first approach, try agile engineering instead
“Build versus buy” is an issue every startup faces, but in the age of generative AI, it can become an existential issue.
Building an LLM from the ground up costs more than most companies are willing to pay, and modifying it to meet your specific needs requires expensive data preparation.
“In contrast, agile engineering involves leveraging existing MBAs without modifying the model itself or its training data,” says Victoria Albrecht, co-founder and CEO of Springbok AI.
“Instead, it combines a complex, intelligently designed series of prompts to deliver consistent output.”
Ask Sophie: Can you explain the H-1B visa, EB-2 green card transfer, and visa bulletin?
Dear Sophie,
My startup is hiring. The lead candidate for one of the positions has an H-1B visa and has been waiting for an EB-2 green card for more than four years. This will be the first time that our startup will deal with the issue of immigration.
Can you explain the H-1B visa and EB-2 green card transfer process? When do you commit to EB-2? Has the Visa Bulletin changed?
– Strange Co-Founder
How deep tech founders can secure early-stage fundraising in an economic downturn
SaaS is widely open, but deep tech founders hoping to connect with investors face a unique set of problems.
New technology often takes a long time to monetize, which means there is a small community of venture capitalists with the relevant interest and experience. During an economic downturn, this group can become smaller.
Contrary to expectations, French photonics company Cailabs received seed funding during the 2013 market downturn.
“Here we share the lessons we learned, which can help other deep tech founders looking for funding during the economic downturn,” founder and CEO Jean-François Morizor wrote in TC+.
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8 web3 gaming experts discuss obstacles and opportunities for wider adoption
Web3 games encourage players to earn NFTs and cryptocurrencies and enable them to make collective decisions about the worlds they inhabit.
Investors and developers are expressing interest, but “Web3 games still have some tough hurdles to overcome before they go mainstream,” Jacqueline Melink writes.
Do not use designs, reveals, or animation in your presentation deck
There’s a lot of pressure on founders to create presentations that grab investors’ attention, but is it appropriate to use dynamic elements like animation in a presentation?
“Just don’t do it,” advises Hajj Jean Camps.
“Of the thousands of combinations I’ve seen over the years, I’ve never seen an animation that really adds anything.”