2024: The Year the GPT Wrapper Myth Proved Wrong

The wildest thing right now is you can start a company that can make tens of millions of dollars, literally in 24 months, and, uh, you can do it for potentially, you know, $2 million, $5 million.

A year ago, I remember many of the startups in the batch would get sort of enterprise proof of concepts, or pilots in particular, and there was a lot of cynicism around whether any of those pilots would translate into real revenue. Fast-forward a year, I think we have all firsthand experience that these pilots have turned into, like, real revenue.

It's still early days, honestly. Like, it... you know, we sort of breathe a sigh of relief right now in 2024, but it's anyone's game, honestly. Like, these things are moving so quickly. Welcome back to another episode of The Light Cone. I'm Gary. This is Jared, Harj, and Diana. And collectively, we funded companies worth hundreds of billions of dollars right at the beginning. So, 2024, what a year. How are you feeling about this, Harj?

Pretty great. I think this is the year that everything broke in favor of startups. What I've been thinking about a lot recently is when ChatGPT launched, two years ago now, the immediate consensus view was all of the value would go to OpenAI. And very specifically, do you all remember when they announced the GPT or the ChatGPT store?

Yeah.

Like, the... I remember the consensus was everything that was built on to- top of ChatGPT was a GPT wrapper, and the App Store was just going to relea- be released and crush every single person trying to build an AI application, and OpenAI would be a ginormous company, but there'd be no opportunity for startups. It sounds kind of ridiculous to say that now because, um...

(laughs) Who even remembers the ChatGPT store?

Yeah, exactly.

(laughs)

The ChatGPT store itself was a nothing burger, but, like, mo- more importantly, what are the big AI applications today? Like, I'd say, outside of ChatGPT itself, the breakout consumer application is Perplexity. The breakout enterprise application is probably Glean, maybe. Um, in legal tech, you have Casetext, you have Harvey. Pro-sumer, you have PhotoRoom. Like, there's... the point being, there are many, many applications that have been built not by OpenAI. It's been a great time to build startups.

Yeah. The wildest thing right now is you can start a company that can make tens of millions of dollars, uh, literally in 24 months from zero, and, uh, you can do it for potentially, you know, $2 million, $5 million. That's sort of the story of one of these companies, Opus Clip, which never had to raise a real series A, and that's something that we sort of see across the YC community as well.

Yeah. I think that's, um, a particularly important point that you can do it as a startup without ris- raising tons of capital, because post the GPT store launch, I then remember, uh, Anthropic and Claude emerged, and the consensus view for a while was all of the value's going to go to one of these foundation model companies, and that the only way you can compete in AI is to raise huge amounts of money, um, either because you've got venture capital, or you're Amazon or Facebook or Google, um, with tons of cash already. But if you weren't one of the big foundation models, um, there would be no value. And the applications built on top of these things would either be built by the foundation model companies themselves or just not be that valuable. Again, something that turned out to be completely not true, right? And in particular, what drove that is open source. Like, the weird series of events where Meta... (laughs) Like, the weights being leaked and, like, Meta just, like, rolling with it.