5 ms·

I feel like Figma and OpenAI are apples and oranges. Figma is a really strong business. You can show spreadsheets and charts to make a pretty convincing case

I feel like Figma and OpenAI are apples and oranges. Figma is a really strong business. You can show spreadsheets and charts to make a pretty convincing case that it'll make a lot of money. It's not terribly risky. OpenAI is really strong tech without much product market fit. It's got a ton of mindshare, but that's about it. Buying them is making a big bet that you can somehow turn that into a big business. So one is a low-risk, medium-reward buy, and the other is a high-risk, high-reward buy. Even if OpenAI ultimately changes the world a lot more, its expected value now is close(ish) to Figma's.

STELLANOVA 4y ago
Other way to look at it is that you look at Figma as a product and OpenAI as a platform. What you will do with the platform is up to you. It's not easy to productize something like that and get good revenue - it's much riskier BUT if you already have many products in your portfolio (like MSFT) it's actually really good fit as you may enhance your existing product line...
devmunchies 4y ago
> OpenAI is really strong tech without much product market fit I wouldn't say that. There are a lot of companies making money on it already, there's definitely a market for it. They just aren't monetizing. It's more like how "growth startups" acquired users at a loss before turning on the monetization engine.
- wahnfrieden 4y ago
  how much is early adopter exploration?
  - devmunchies 4y ago
    I meant there are other companies who are building their entire companies (not just features) on OpenAI’s products and those companies have revenue. Been going on for a couple years. I was at one such startup. They are kind of like a Stripe or Twilio in that sense (in their current form)
- luckydata 4y ago
  Which companies are making money on it? I'm talking billion dollars. None.
  - devmunchies 4y ago
    How would we know? they’d still be private. A billion in revenue is like a public company 3-5 years after IPO. The aggregate probably is making quite a bit, though.
  - anfelor 4y ago
    https://www.jasper.ai/ https://www.jasper.ai/
    - jitl 4y ago
      Maybe in a few years if no competitors emerge.
  - nl 4y ago
    No one grows a "billion dollars" business that quickly. A super-fast growing company like Slack took 5 years to reach $200M in annual revenue. Jasper.AI is growing quicker than that. $45M in annual revenue last year, targeting $75M next year.
- fishtoaster 4y ago
  I suppose that depends what their monetization strategy is. I haven't paid a ton of attention, but my impression was that it's "sell our tech via an API." This relies on other companies building things that make a lot of money on top of that API. I know some are, but I'm not aware of any particularly successful ones yet. Maybe someone will find a killer application for this that solve an expensive problem for someone. In that case, yeah, OpenAI will make bank. Or maybe the best you'll see is a bunch of small fries selling fun toys and OpenAI will never really take off in terms of actual revenue. Or maybe, by the time someone finds killer applications for OpenAI's tech, the tech will already be available from other providers (like GPT-Neo or StableDiffusion).
marvin 4y ago
> OpenAI is really strong tech without much product market fit. It's got a ton of mindshare, but that's about it. Buying them is making a big bet that you can somehow turn that into a big business. That's the YouTube argument. "Yeah, everyone uses it but it's not like they're able to make money", stated about a company that's iterating its products faster than viable competition can react. In this case regarding one of a few actors in the world that can plausibly access the computing resources required to build on the bleeding edge. They've made something people want; they'll be successful.
- scarface74 4y ago
  > That's the YouTube argument. "Yeah, everyone uses it but it's not like they're able to make money" Seeing that most rumors are that YouTube still isn’t profitable, that may not be the argument you think it is.
  - nl 4y ago
    It's very unclear why anyone thinks YouTube isn't highly profitable. Google has only released revenue numbers: Roughly $15B in 2020[1]. Costs are difficult to judge, but in terms of infrastructure they are probably somewhat comparable to Netflix. For 2020, Netflix had roughly $24B revenue and spent $1.8B on "technology and development" (which is where their infrastructure costs are)[2]. Unless you think Google is much less efficient than Netflix (which uses AWS for a lot of their tech[3]) then it's difficult to see how YouTube could not be profitable. Even if YouTube costs 3 times as much at Netflix to run (I don't see how) Google still has $10B revenue to pay creators for, and they control both how much they pay creators and how much they charge advertisers. [1] https://www.theverge.com/2020/2/3/21121207/youtube-google-alphabet-earnings-revenue-first-time-reveal-q4-2019 https://www.theverge.com/2020/2/3/21121207/youtube-google-al... [2] https://ir.netflix.net/financials/financial-statements/default.aspx https://ir.netflix.net/financials/financial-statements/defau... [3] https://s22.q4cdn.com/959853165/files/doc_financials/2021/q4/da27d24b-9358-4b5c-a424-6da061d91836.pdf https://s22.q4cdn.com/959853165/files/doc_financials/2021/q4...
    - 4y ago
hahaxdxd123 4y ago
I don't think there's a lack of product market fit. People are already building a ton of products on top of LLMs - (Jasper AI, Copilot-related tools, etc.) I would guess that OpenAI has infra, compute, and operational processes that blow these startups out of the water. If an interested buyer wanted to monetize, I think they could do so fairly quickly and profitably.
abirch 4y ago
What made Figma was its ecosystem. That and it was impacting Adobe's bottom line were reasons for its acquisition IMHO. It'd be interesting to see what kind of locked in ecosystem OpenAI can build.

STELLANOVA 4y ago

Other way to look at it is that you look at Figma as a product and OpenAI as a platform. What you will do with the platform is up to you. It's not easy to productize something like that and get good revenue - it's much riskier BUT if you already have many products in your portfolio (like MSFT) it's actually really good fit as you may enhance your existing product line...

devmunchies 4y ago

> OpenAI is really strong tech without much product market fit I wouldn't say that. There are a lot of companies making money on it already, there's definitely a market for it. They just aren't monetizing. It's more like how "growth startups" acquired users at a loss before turning on the monetization engine.

wahnfrieden 4y ago
how much is early adopter exploration?
- devmunchies 4y ago
  I meant there are other companies who are building their entire companies (not just features) on OpenAI’s products and those companies have revenue. Been going on for a couple years. I was at one such startup. They are kind of like a Stripe or Twilio in that sense (in their current form)
luckydata 4y ago
Which companies are making money on it? I'm talking billion dollars. None.
- devmunchies 4y ago
  How would we know? they’d still be private. A billion in revenue is like a public company 3-5 years after IPO. The aggregate probably is making quite a bit, though.
- anfelor 4y ago
  https://www.jasper.ai/ https://www.jasper.ai/
  - jitl 4y ago
    Maybe in a few years if no competitors emerge.
- nl 4y ago
  No one grows a "billion dollars" business that quickly. A super-fast growing company like Slack took 5 years to reach $200M in annual revenue. Jasper.AI is growing quicker than that. $45M in annual revenue last year, targeting $75M next year.
fishtoaster 4y ago
I suppose that depends what their monetization strategy is. I haven't paid a ton of attention, but my impression was that it's "sell our tech via an API." This relies on other companies building things that make a lot of money on top of that API. I know some are, but I'm not aware of any particularly successful ones yet. Maybe someone will find a killer application for this that solve an expensive problem for someone. In that case, yeah, OpenAI will make bank. Or maybe the best you'll see is a bunch of small fries selling fun toys and OpenAI will never really take off in terms of actual revenue. Or maybe, by the time someone finds killer applications for OpenAI's tech, the tech will already be available from other providers (like GPT-Neo or StableDiffusion).

marvin 4y ago

> OpenAI is really strong tech without much product market fit. It's got a ton of mindshare, but that's about it. Buying them is making a big bet that you can somehow turn that into a big business. That's the YouTube argument. "Yeah, everyone uses it but it's not like they're able to make money", stated about a company that's iterating its products faster than viable competition can react. In this case regarding one of a few actors in the world that can plausibly access the computing resources required to build on the bleeding edge. They've made something people want; they'll be successful.

scarface74 4y ago
> That's the YouTube argument. "Yeah, everyone uses it but it's not like they're able to make money" Seeing that most rumors are that YouTube still isn’t profitable, that may not be the argument you think it is.
- nl 4y ago
  It's very unclear why anyone thinks YouTube isn't highly profitable. Google has only released revenue numbers: Roughly $15B in 2020[1]. Costs are difficult to judge, but in terms of infrastructure they are probably somewhat comparable to Netflix. For 2020, Netflix had roughly $24B revenue and spent $1.8B on "technology and development" (which is where their infrastructure costs are)[2]. Unless you think Google is much less efficient than Netflix (which uses AWS for a lot of their tech[3]) then it's difficult to see how YouTube could not be profitable. Even if YouTube costs 3 times as much at Netflix to run (I don't see how) Google still has $10B revenue to pay creators for, and they control both how much they pay creators and how much they charge advertisers. [1] https://www.theverge.com/2020/2/3/21121207/youtube-google-alphabet-earnings-revenue-first-time-reveal-q4-2019 https://www.theverge.com/2020/2/3/21121207/youtube-google-al... [2] https://ir.netflix.net/financials/financial-statements/default.aspx https://ir.netflix.net/financials/financial-statements/defau... [3] https://s22.q4cdn.com/959853165/files/doc_financials/2021/q4/da27d24b-9358-4b5c-a424-6da061d91836.pdf https://s22.q4cdn.com/959853165/files/doc_financials/2021/q4...
  - 4y ago

hahaxdxd123 4y ago

I don't think there's a lack of product market fit. People are already building a ton of products on top of LLMs - (Jasper AI, Copilot-related tools, etc.) I would guess that OpenAI has infra, compute, and operational processes that blow these startups out of the water. If an interested buyer wanted to monetize, I think they could do so fairly quickly and profitably.

abirch 4y ago

What made Figma was its ecosystem. That and it was impacting Adobe's bottom line were reasons for its acquisition IMHO. It'd be interesting to see what kind of locked in ecosystem OpenAI can build.