How does the inclusion / exclusion of AI impact your startup's valuation?
Summary
TLDRThe transcript discusses the ambiguity of AI components within startups and their impact on valuation multiples. It highlights the difference between core AI technology and using AI as an efficiency tool. The speaker expresses skepticism about businesses relying solely on existing AI models like GPT or Claude, suggesting they lack a sustainable future. Instead, AI should be integrated to enhance customer service or operational efficiency. The transcript also touches on the challenges of rehospitalization in healthcare and a startup's approach to using AI for predictive analytics to prevent it.
Takeaways
- ๐ง The speaker discusses the ambiguity of what constitutes an 'AI component' in a business, suggesting it could range from core technology to a modern tool for efficiency.
- ๐ค They mention that every innovative tech company claims to use AI, making it difficult to define a typical multiple for startups with AI components.
- ๐ก The importance of distinguishing whether AI is a core technology or an adapted solution like using open AI, chat GPT, or Claude in a low-code, no-code manner is highlighted.
- ๐ The speaker implies that the valuation multiple could vary greatly, from traditional business multiples to those heavily influenced by the current appreciation for AI.
- ๐ฅ The speaker is building a health tech company that uses technology and AI to empower healthcare, aiming to reduce rehospitalization rates post-discharge from home health.
- ๐ The AI in their health tech company analyzes data from various health monitoring devices to predict and prevent rehospitalization risks for patients.
- ๐ซ The speaker expresses skepticism about the future of companies that are primarily based on large language models, suggesting they can be easily replicated and may not be sustainable.
- ๐ฎ The script suggests that using AI to modernize customer service or increase efficiency can make a difference but doesn't necessarily increase the company's valuation.
- ๐ผ The speaker believes that integrating AI to make a company more efficient and profitable is different from basing a company solely on AI technology.
- ๐ They argue that companies relying on existing language models as their core business are not interesting and may face obsolescence within the next year and a half.
- ๐ก The risk profile of a company might increase if AI is merely an add-on rather than integral to the business model.
Q & A
What is the ambiguity regarding AI components in a startup business model?
-The ambiguity stems from the broad application of AI in tech companies, where almost any innovative tech company might claim to use AI in some form. This makes it difficult to distinguish the significance of AI within a startup's core technology versus it being a general tagline or feature.
How does the definition of an AI component affect the startup's valuation?
-If AI is a core part of the technology, it may command a higher valuation, similar to companies like OpenAI. However, if the startup is merely using existing AI platforms in a low-code or no-code manner, the valuation might be more aligned with traditional business multiples.
What is the range of multiples for startups with AI components?
-The multiples can vary greatly, from traditional business multiples for those using AI as an efficiency tool, to potentially higher multiples for those heavily weighted on AI innovation, reflecting the current market appreciation for AI.
Why might using existing language models as a core business not be sustainable in the long term?
-Using existing language models like GPT or Claude as a core business model may not be sustainable because these models can be easily replicated by competitors, and the rapid pace of AI development could render them obsolete within a short period.
What is the speaker's opinion on companies that base their business on large language models?
-The speaker does not see a future in companies that base their entire business on large language models, as they view these models as easily replicable assets that may lose their competitive edge quickly.
What is the speaker's background and current project?
-The speaker has a background in health tech and is currently building a health tech company that aims to empower healthcare with technology and AI.
What is the problem the speaker's health tech company is addressing?
-The company is addressing the issue of high rehospitalization rates among patients discharged from home health care, with a focus on preventing rehospitalizations by keeping patients at home.
How does the AI component in the speaker's health tech company work?
-The AI component uses data from various health monitoring devices to predict when patients are at risk of rehospitalization, enabling timely interventions to keep them at home.
What is the significance of using AI in the health tech startup mentioned in the script?
-The AI is significant as it processes data from health monitoring devices to make accurate predictions, which is crucial for preventing patient rehospitalization and improving healthcare outcomes.
How does the AI enhance the efficiency and profitability of the health tech startup?
-The AI helps in making the company more efficient by accurately predicting patient health risks, allowing for targeted interventions and potentially reducing costs associated with rehospitalizations.
What is the potential impact of the health tech startup on the healthcare industry?
-The startup could significantly reduce healthcare costs by decreasing rehospitalization rates and improving patient outcomes through the use of AI for predictive analytics in home healthcare.
Outlines
๐ค AI Components in Business Valuation
The speaker discusses the ambiguity in valuing startups with AI components, noting that almost every tech company claims to use AI. They differentiate between AI as a core technology and AI as a tool integrated into existing solutions. The speaker suggests that using AI to enhance efficiency or customer service is valuable, but warns against businesses that rely solely on existing AI models like GPT or Claude, predicting they may not have a sustainable future. They express a lack of interest in companies that are merely using AI as an add-on, rather than those that are fundamentally built on AI technology.
๐ฅ AI in Health Tech: Preventing Rehospitalization
The speaker introduces their work in health tech, focusing on a company that uses AI to prevent rehospitalization after home health discharges. They highlight a significant gap in the market, with a high percentage of patients returning to the hospital within a year. The company installs devices and maintains weekly communication with patients to monitor health metrics such as blood pressure, weight, blood sugar, and other vital signs. The AI system processes this data to predict and prevent potential health crises that could lead to rehospitalization, aiming to keep patients healthy at home.
Mindmap
Keywords
๐กMultiples
๐กAI-Driven
๐กBusiness Model
๐กInnovative Tech Company
๐กCore Technology
๐กLow-Code/No-Code
๐กHealth Tech
๐กRehospitalization
๐กData Integration
๐กRisk Prediction
๐กAI Component
Highlights
Ambiguity in defining what constitutes an 'AI component' in a business model.
The prevalence of AI in tech companies' marketing and the challenge it poses in evaluating AI's true impact.
The distinction between a company primarily driven by AI and one that integrates AI into its existing solutions.
The potential for high growth in tech startups that utilize AI in a low-code or no-code manner.
The wide range of business multiples for companies with AI components, from traditional to heavily AI-focused.
The skepticism towards businesses that rely solely on existing AI models like GPT or Claude without proprietary technology.
The importance of AI in modernizing customer service and increasing business efficiency.
The risk profile of companies that are merely add-ons to existing AI technologies.
The potential lack of future in companies that are based on large language models without a unique value proposition.
The rapid pace of AI development and the challenge it poses for businesses relying on current AI models.
The unique approach of a health tech company that uses AI to prevent patient rehospitalization post home health discharge.
The significant gap in the market for post-discharge care and the opportunity for AI to fill this void.
The use of AI to analyze patient data from various health monitoring devices to predict rehospitalization risks.
The integration of AI in a healthcare company that aims to keep patients at home and out of hospitals.
The practical application of AI in healthcare to improve patient outcomes and reduce healthcare costs.
The nuts and bolts of how AI is 'empowered' in a healthcare setting to make a tangible impact.
The innovative use of AI in predicting patient health risks based on data from blood pressure cuffs, scales, and other instruments.
Transcripts
see what are the typical multiples for
startups that are not primarily AI
driven have ai components within their
business model uh ideally I'd love to
what someone used the reference of
phoning a friend earlier and uh I wish I
could phone a friend that's more
specific to AI I don't see a lot of AI
opportunities but I mean it's I I would
say just the way that this question is
written at least that if you have an AI
component to the business there's a
little bit of ambiguity behind that
because arguably you could go to any
Innovative tech company and on the
homepage of their website right now it's
going to have some sort of tagline about
how they're using AI to their advantage
right and every big interprise software
has started doing this for for a while
now so I think it depends on the
underlying definition of what an AI
component is right is it part of your
underlying core technology you know
great it's look no further than than you
know the open Ai and the and the figures
of the world to kind of get your answer
there in terms of a potential multiple
uh however are you adapting open AI chat
GPT Claude other existing platforms into
your existing solution in kind of a low
code no code way that's probably pretty
fundamentally different and arguably
something that any you know kind of high
growth or technology centered business
could be doing like low code no code for
Tech startups and and tech companies in
general something that you you're
looking at for lean and mean yeah so so
like th this again like this all depends
on the AI component you're talking about
it could literally range
from you know I mean a a practical kind
of traditional business multiple of you
know uh a few turns of of Leverage
against IA or or a few times against
Topline all the way up to something
that's that's pretty weighted pretty
heavily it's the current kind of I don't
want to call it hype the current current
appreciation for AI that's happening
right
now essentially if you're using a
already existing language model that
exists on the market as your model as
your core business it's not much of a
it's not much of a business going down
the road but using it to you know
accentrate or you know modernize your
your your customer service or something
within your business itself I mean that
makes a difference and of course it's
like using any kind of modern tool to be
more efficient but I mean I I me does
that increase the risk profile though if
they're liary it's just an add-on but
basically if it's a company goes yeah
we've introduced large language models
into our company to actually make us
more efficient and more profitable or
more customer friendly and all that
that's one thing but the separate thing
is our companies based on large language
models is in my opinion just my opinion
you guys I don't see a future in that is
like we have a profitable business that
is helping all this this or this and
we're using chat GDP and Claud as our
our engine like I don't that's already a
piece of asset that can be copied
anywhere and we'll probably run out in
the next year and a half as as fast as
this is moving so I don't find those
companies
interesting actually I know based on
your background in health Tech are you
looking at certain indicators or certain
multiples when acquiring a health tech
company yeah so I'm actually building a
health Tech Health tech company right
now that is really a healthc care
company that's empowered by by Tech and
AI it's been a lot of what what does
that actually mean empowered by like
what does that mean nuts and bolts yes
and so just a really quick pitch on it
so when patients discharge from home
health there is a massive gap for what
they do right they they discharge from
home health and then about 68% of them
end up back in the hospital within the
first year and there's just really a gap
in the market that nobody's taking and
so what we're what we're doing is we are
getting a team team that is installing
devices and and has Communications with
these patients on a weekly basis to stop
their rehospitalizations keep them at
home and so what the AI does is so we
have blood pressure cuffs we have scales
instruments to measure blood sugar and
four or five other measurements and so
what that does is it feeds into our
system and then the AI takes all of the
data that we have and is able to
accurately predict when they're going
when they're at risk to to go to to have
factors that are going to lead to
rehospitalization
Browse More Related Video
ChatGPT resta indietro, deepfake irriconoscibili, algoritmi emotivi
NAMA 2019 Presentation by Paresh Patel
How OpenAI GPTs are Changing Venture Capital - SVIC Clip
[ENG] ํ๋ํฐ์ด AIP์ chatGPT ๊ทธ๋ฆฌ๊ณ ํ ์ฌ๋ผ
Webinar: How AI is Helping Food Suppliers Improve Operational Efficiency & Customer Service
Will AI adoption in ERP be a positive or negative, overall?
5.0 / 5 (0 votes)