Oh, poor, Sara Fischer! Every time I see her byline I find myself humming the “Poor Professor Higgins” lines from My Fair Lady. “All day long on [her] feet; Up and down until [s]he's numb; doesn't rest; doesn't eat;… on [s]he plods against all odds;… nine p.m. ten p.m. on through midnight ev'ry night…” Every story I read at Axios that’s a winner is hers and Axios just announced they’re laying of 10% of their staff.
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Sara penned five killer stories today. Here’s my fave. It’s about a startup called ProRata AI.
If you’ve read even a handful of stories about startups, you know they follow a formula. The writer lifts the copy from the site or words from the/a founder that laud some accomplishment that will, if the startup is fruiticious, benefit humanity. Like this one from a company called Cocoon that will engineer, “a greener alternative to Earth’s most abundant human-made material.” Then, the story will pivot to the complex array of challenges the team faced or is facing. Then, the list of plucky investors who are entering the fox hole to work shoulder-to-shoulder for the greater good. Everyone wishes each other well and [scroll] next story.
I wish Cocoon, its founders, and investors nothing but luck so the concrete that keeps our buildings from falling uses less energy or whatever the hell they’re doing. The picture showed a Tonka toy truck pouring red Lego dots into what looked like a shipping container. Honestly, I’m immune. That’s why this story and these backers stood out.
As we near the end of the Google era of media (yes, feel free to quote me on that), we have to pay homage to the people that made it possible. Once upon a time Sergey Brin and Larry Page were nobodies. Their startup was going to change humanity by doing making sure we knew precisely where in the plains of Spain the rain would mainly fall.
Some would argue that was a far less heralded innovation from Bill Gross that made Google GOOGLE. He attached the words we searched for to ads. You searched for Honda it showed you an ad related to Honda. Either one from Honda or, perhaps, strategically, one from Toyota hoping you’d switch brands.
Their search algorithm plus his business approach was a combination made in places Botticelli painted. Here are three quotes from a great story written a decade ago about the pair-up that obliterate today’s beliefs.
[1] “The conventional wisdom at the time was that there wasn’t much money in search.” Got that wrong.
[2] “Page and Brin criticized advertising-funded search engines as ‘inherently biased towards the advertisers and away from the needs of consumers.’” Wow. Just, wow.
[3] “The tiny upstart won $25 million in venture-capital funding, which valued the company at $100 million. But it struggled to land contracts with the big portals.” The tiny startup was Google.
Pay particular attention to that last one.
AI is active search. Instead of indexing all content and passively waiting for someone to query the world’s most vast database, AI is active. You ask for something and AI brings to bear the vast database to generate “new” content.
So, where’s the problem? Search is massive. Active is better than passive. By the associative and transitive properties and by the power vested in me, active search is better than passive search. Ergo (and I use that word correctly), active AI search should be massive. It’s not. Goldman Sachs warns that AI is hype. That follows last week’s news that OpenAI may run out of money this year.
Tech, even superior tech, is not a lock to make money, be successful, or change the world. Those things only have a chance to happen when you link technology to business.
AI is losing money spewing out, sorry, generating, stuff. It has to link what it’s spewing out to money. Enter ProRata AI. It aims to – get this – “use its revolutionary technology to ethically and positively reward human creativity.” Oh, for frig’s sake. It raised $25M and is inking deals with major media companies. Do parallels never end?
Oh, I should say this. It won’t work. Nobody I know who searches for anything gives the smallest rodent’s rump about where the content came from. You only get paid when I click.
Who, better than anyone, should know this? Bill Gross. Bill Gross connected last generation’s tech to last generation’s ad dollars. Right now, Bill is spewing platitudes like, “We're building a movement that says generative AI is incredible, but it's flawed. It's powerful, but it's unfair, and we're working to make it fair.” What he needs to build is a way to link all the chunks being spewed to marketing’s dollars. If he can pivot that tech to this need, he’s got a massive winner.
[1] There is money in AI.
[2] Biasing it toward advertisers unlocks the dollars.
[3] ProRata raised $25 million in venture-capital funding, which valued the company at who knows what. But it struggled to land contracts with the big portals.
I told you to pay particular attention to the last of those three points. Google never became the tech licensed to portals. They pivoted to the tech that obliterated the portals. Because they did something portals didn’t. Unless AI is crying for a monetizing solution. Someone is going to hit on it.
