My guess would be that the ability to commercialize these models would strongly hinge on the ability for firms to wrap these up with complementary products, that would contribute to an ecosystem with network effects, dependencies, evangelism, etc.
I wouldn’t draw too strong conclusions from the fact that the few early attempts to commercialize models like these, notably by OpenAI, haven’t succeeded in creating the preconditions for generating a permenant stream of profits. I’d guess that their business models look less-than-promising on this dimension because (and this is just my impression) they’ve been trying to find product-market-fit, and have gone lightly on exploiting particular fits they found by building platforms to service these
Instead, better examples of what commercialization looks like are GPT-3-powered companies, like copysmith, which seem a lot more like traditional software businesses with the usual tactics for locking users in, and creating network effects and single-homing behaviour
I expect that companies will have ways to create switching costs for these models that traditional software product don’t have. I’m particularly interested in fine-tuning as a way to lock-in users by enabling models to strongly adapt to context about the users’ workloads. More intense versions of this might also exist, such as learning directly from individual customer’s feedback through something like RL. Note that this is actually quite similar to how non-software services create loyalty
I agree that it seems hard to commercialize these models out-of-the-box with something like paid API access, but I expect, given the points above, to be superseded by better strategies.
This is insightful. Some quick responses:
My guess would be that the ability to commercialize these models would strongly hinge on the ability for firms to wrap these up with complementary products, that would contribute to an ecosystem with network effects, dependencies, evangelism, etc.
I wouldn’t draw too strong conclusions from the fact that the few early attempts to commercialize models like these, notably by OpenAI, haven’t succeeded in creating the preconditions for generating a permenant stream of profits. I’d guess that their business models look less-than-promising on this dimension because (and this is just my impression) they’ve been trying to find product-market-fit, and have gone lightly on exploiting particular fits they found by building platforms to service these
Instead, better examples of what commercialization looks like are GPT-3-powered companies, like copysmith, which seem a lot more like traditional software businesses with the usual tactics for locking users in, and creating network effects and single-homing behaviour
I expect that companies will have ways to create switching costs for these models that traditional software product don’t have. I’m particularly interested in fine-tuning as a way to lock-in users by enabling models to strongly adapt to context about the users’ workloads. More intense versions of this might also exist, such as learning directly from individual customer’s feedback through something like RL. Note that this is actually quite similar to how non-software services create loyalty
I agree that it seems hard to commercialize these models out-of-the-box with something like paid API access, but I expect, given the points above, to be superseded by better strategies.