What If Developing AI Was Like Constructing Buildings?
Imagine you’re the owner of a large real estate portfolio valued at $5 billion. You’ve spent a substantial amount of time and money in the construction, materials, and skilled labor to build high-quality structures, believing in their long-term value. Then, suddenly, a breakthrough technology paves the way for a new norm: a way to build buildings for free. Yes, like magic, at the click of a button and at no cost, entire buildings are created out of thin air. In just a moment, the value of your entire portfolio shifts. What was once worth billions is now potentially worth next to nothing and the value has shifted from the buildings themselves to their location and flow of people moving through them.
In this scenario, your challenge as a building owner becomes clear. You are now forced to rethink what “value” means.
This isn’t just a theoretical exercise; this shift is happening now in the world of software, as a result of Artificial Intelligence. Increasingly, the value of software code is less so in the millions of lines of code that have taken decades and billions of dollars to erect, but rather in the 'location', or shall I say usage and users it holds. AI is setting a real challenge to large software corporations that have accumulated value in its lines of code, who now have to think radically differently about what is their core business value. This change also poses a wealth of opportunities for startups that think beyond the existing model.
The 2.0 Model of AI Startups
The thought process companies have gone through follows a similar pattern. First: "Wow, AI is amazing. Our business could be doing so much more. Previously our business did X, but now X + AI can be worth much more." But then, realization sinks in and the second thought follows: "Actually, if I was to build X from scratch today, I could do it so much better...."
Both the first and the second points are true to most businesses. However, like with any change, it is the agile and fast moving start-ups that have more to gain, while the large cumbersome S&P 500 companies who have more to lose. They won’t admit it to their shareholders, but similar to Blockbuster who put tremendous value on their accumulated DVD's only to find that streaming erased any advantage they posed, many corporations today price their software code lines at a premium, when in reality, they are prone to disruption.
That’s why at Hetz Ventures we believe that the next wave of innovation in AI will not be about adding incremental improvements to existing products. Instead, it’s about fundamentally rethinking the very way we build these tools and, ultimately, entire companies. This shift opens the door to AI startups with a new mindset: not just those looking to develop a better product but those with a vision for healthier, more agile businesses.
We’re looking for entrepreneurs who aren’t just focused on rapidly building AI products or scaling predictably. We’re looking for visionaries aiming to disrupt the very DNA of their target market - not an add-on or critical feature - but a ground up disruptor.
If you’re working on an idea that fits this vision, then perhaps you’re already thinking like us.
