Sangeet, I'm an AI entrepreneur and your posts always help to inform my worldview and strategy. Thanks for writing them! Can you say more about agent sophistication? How do you define it and how would you measure it?
Agent sophistication is about the ability for agents to complete the goals they are set. This will start highly verticalized first, and within closed ecosystems of resources on which the agent can train itself faster. The more narrowly you can define the goal in terms of resources required, steps required, narrowness of domain information needed, the faster you get to agent sophistication within that narrow domain. Once you achieve that, you expand gradually by opening out one of the parameters above.
I think this is a great playbook for Vertical AI startups, but need to account for crazy hype around AI Agents, that makes it very hard to stand out and try the unbundling move.
Very smart analysis. Horizontal AI is commoditized at this point: either GPT wrappers or foundational models. Industry use cases for AI are apparent, but require a much more focused approach. You have to get close to customers, intimately learn their processes and pain points, and figure out how AI can make these things more efficient/less painful.
Thanks! Agree, the opportunities are in vertical AI and the eventual opportunity is to build a horizontal position away from the foundational model into workflow.
Super solid analysis and insight. The sheer volume of AI offerings and 'AI-enabled' legacy software is making it clear that trying to construct a new operating structure for enterprises by stacking one disconnected brick at a time isn't the best way. Better to start with a Blueprint. Even if not perfect. Or wait for one to be developed at what you describe as the horizontal layer. But once a little more clarity - or FOMO - emerges, I can't help but believe we will see another version of 'everyone on the Cloud/SaaS' or 'everyone on SAP' or 'everyone on Salesforce' wave. The next one might be something like 'everyone on orchestrated Agents'???
Sangeet, I'm an AI entrepreneur and your posts always help to inform my worldview and strategy. Thanks for writing them! Can you say more about agent sophistication? How do you define it and how would you measure it?
Thanks Juan.
Agent sophistication is about the ability for agents to complete the goals they are set. This will start highly verticalized first, and within closed ecosystems of resources on which the agent can train itself faster. The more narrowly you can define the goal in terms of resources required, steps required, narrowness of domain information needed, the faster you get to agent sophistication within that narrow domain. Once you achieve that, you expand gradually by opening out one of the parameters above.
Thanks for sharing how you see the market.
I think this is a great playbook for Vertical AI startups, but need to account for crazy hype around AI Agents, that makes it very hard to stand out and try the unbundling move.
Agree, the hype needs to subside before we see which problems will best be solved by agents.
Very smart analysis. Horizontal AI is commoditized at this point: either GPT wrappers or foundational models. Industry use cases for AI are apparent, but require a much more focused approach. You have to get close to customers, intimately learn their processes and pain points, and figure out how AI can make these things more efficient/less painful.
Thanks! Agree, the opportunities are in vertical AI and the eventual opportunity is to build a horizontal position away from the foundational model into workflow.
Too much value in this post! Thanks !
Thanks! I have a feeling this post is still too early. In a year, it will make a lot of sense. 2024 will be the year agents dramatically improve.
Super solid analysis and insight. The sheer volume of AI offerings and 'AI-enabled' legacy software is making it clear that trying to construct a new operating structure for enterprises by stacking one disconnected brick at a time isn't the best way. Better to start with a Blueprint. Even if not perfect. Or wait for one to be developed at what you describe as the horizontal layer. But once a little more clarity - or FOMO - emerges, I can't help but believe we will see another version of 'everyone on the Cloud/SaaS' or 'everyone on SAP' or 'everyone on Salesforce' wave. The next one might be something like 'everyone on orchestrated Agents'???