Early eyes on the themes we’ll explore this year at Startupfest.
When historians write the business history of the 2020s, they’ll focus on two tectonic shifts: The augmentation of humans by machines, and the newfound importance of human connection. In 2023, we’re embracing both of these changes and weaving them into every part of Canada’s original startup event.
An augmented world
When the search engine was unveiled, it took a while to catch on. Not everyone was online, and few people had a phone in their pocket. Over twenty years, however, search became a fundamental cognitive tool. Today, we think nothing of searching for an image, or a song, or an old conversation, or a person, or a destination, or a translation. Search has changed what we know and how we know it, but it happened so slowly we scarcely noticed. We had time to adapt.
AI is not sneaking up on us slowly.
In January, 2021, OpenAI launched Dall-e, a deep learning model that generates images from text prompts. Over the next year, other startups such as Midjourney and Stablediffusion democratized the technology, creating significant controversy over artists’ rights and the nature of creativity itself.
This art seemed more like a novelty, better suited for generating profile pictures than for serious work. And then, on November 30, 2022, OpenAI released ChatGPT, and everything changed. Millions of people tried chatting with an AI firsthand, and it was clear that work was changing.
We suddenly understood what AI could do, and what was now obsolete. And it was a lot.
How good are these tools? In early June, 2022, before ChatGPT’s launch, Google placed engineer Blake Lemoine on leave, after he became convinced that the company’s chatbot was sentient. And the next iteration of the Large Language Model on which ChatGPT is built, GPT-4, is rumoured to have more than five times the training data.The impact of conversational AI will be at least as widespread as that of search, giving humans a prosthetic brain. But instead of years to adapt, we’ve had weeks and months. In 2001, Ray Kurzweil coined the Law of Accelerating Returns.
“… we won’t experience 100 years of progress in the 21st century — it will be more like 20,000 years of progress (at today’s rate). The “returns,” such as chip speed and cost-effectiveness, also increase exponentially. There’s even exponential growth in the rate of exponential growth. Within a few decades, machine intelligence will surpass human intelligence, leading to The Singularity — technological change so rapid and profound it represents a rupture in the fabric of human history.”
At the time, many people dismissed him as a quack. Lately, public advances in AI have forced us to reconsider his ideas. Whether Kurzweil was right or not, it’s clear that ubiquitous AI will have several significant effects on startups, which investors and founders ignore at their peril:
From generic to targeted
Clarence Charles Hobart founded the Hobart Electrical Manufacturing Company in 1897. To help sell its electric motors, it created attachments: A coffee grinder, a meat chopper, a mixer, a dough hook, and so on. This was at a time when motors were precious and expensive, so a kitchen might buy one massive Hobart engine and a variety of modules to perform different kinds of work. You may not have heard of Hobart, but you’ve likely heard of one of its divisions: KitchenAid.
As the motor became cheaper, it was easier to integrate it into a single-purpose device. Today, there are electric motors everywhere in a household: Not just in your food processor, and your coffee grinder, and your immersion blender, but also in your Roomba and your oscillating fan and your electric toothbrush.
ChatGPT is a coarse, general-purpose tool. You sometimes need to cajole the AI into doing your bidding, or getting it to finish its thoughts. Midjourney doesn’t even have its own user interface—it runs on Discord. MightyGPT, another chatbot offering that incorporates search, runs on Whatsapp. This is the way of every early version of a technology. But companies are racing to build AI into everything we touch.
We won’t have one general-purpose AI any more than we have one-general purpose household motor. Instead, we’ll have AI built into every tool and app we use. And that’s the real AI arms race in the startup world: Making AI ubiquitous by building it into everything. Already, there’s work on generating videos from a description and a few images; on turning books into interactive video games; on trial-and-error sketching; or helping you code alongside an AI partner¹; or zooming and enhancing an image².
The new accelerator
OpenAI was founded with a $1B grant from Elon Musk and other donors, and has received another $1B from Microsoft. It’s a nonprofit, currently run by Sam Altman. Altman was formerly the head of the most sought-after startup accelerator, YCombinator. So it’s no surprise that OpenAI has a startup angle.
OpenAI gives access to GPT-4—the successor to GPT-3, trained on even more data—through Converge, their investment fund. The company invests $1M for 10% of the firm. This gives them tremendous power to select startups that will win (because having early access to a powerful AI is essential for success) and lets them reap a percentage of the resulting profits through an equity stake³.
The new interface
We’re so busy sharing ChatGPT’s answers, we overlook one critical breakthrough of the tech: Its ability to seemingly understand the question. At the dawn of the computing age, computers were hard to use and computing was expensive. That meant humans did most of the user interface work—we flipped switches, carried punched cards, or programmed in hexadecimal.
As computing power grew, the computer did more of the heavy lifting. Screens replaced printouts; keyboards replaces switches; and programming languages like BASIC replaced low-level assembler. Today, our phones can understand speech, correct our spelling, and so on. With modern AI, the machine is doing all the work: We talk to it as we would a fellow human.This matters in part because for many online apps, the user interface is the business model. Consider the following images:
On the left is a Google search result. Almost the entire page is advertising. On the right is a response to the same search (or prompt) from ChatGPT. Where do we put the ads that pay for the service?
Any time an industry’s business model undergoes a shift of this magnitude, a new generation of startups is born. Google itself replaced Yahoo’s directory with its search model, which blended a PageRank relevance algorithm with the AdWords auctioning tool.
Change is afoot.
What startups must do immediately
Even if you’re not a deep-tech AI company, you need to be doing at least these five things:
- Build AI into your features wherever you can. We’ve already had mild AI in some products for a while. Google Docs suggests ways to complete a sentence; we can search for someone’s face in photos. Notion, a SaaS productivity tool, launched a waitlisted AI feature in mid-November. Adobe is building AI-powered filters and painting into its graphics suites.
- Link what you do to your customers’ workflows. Today, it takes work to describe a website to a chatbot, feed that description into an image generator, feed the content and images into an HTML generator, turn that into working code, and publish it to WordPress or Shopify. But that won’t last for long, and we’ll have custom-built, easily-navigated tools to go from text to working product in a few clicks and keystrokes.
- Focus on fixing what AI is bad at. For all its power, ChatGPT is a prediction model for language. It’s less like hiring a genius, and more like having a thousand free, stupid interns with good grammar, so fact-check it. It’s stuck in the past, and only knows what it was trained on, so be novel. It’s good at concept art, but terrible at drawing hands, so make correcting images easy. And so on.
- Join the arms race. Teachers are already complaining that they can’t tell actual writing from AI-assisted cheating, and Huggingface has released a model to detect fakery. Artists want to get paid when AI hallucinates images based on their work, but there’s no easy way to do that yet. AI helps scammers and spammers target individuals and bypass filters. Billions of dollars will be invested in evading and detecting artificially-generated content.
- Build AI into your business plan. AI can write code, build spreadsheets, pen scripts, generate business plans, make clipart, describe personas, and more. We found more concrete use cases for ChatGPT in one week that we have for Crypto since Satoshi first described the blockchain. Developers can get help coding; designers can automate layouts; marketers can generate newsletters. Who do you no longer need to hire? Are your content marketers now proofreaders? Every startup needs to rewrite its business plan from scratch, now that the future of many business tasks is writing prompts.
The hopeful part of all this is that ChatGPT has shown us what humans are for. We’re the novelty, the spark, and the prompt. We’re fluid intelligence and unpredictability. We’re the necessary fly in the ointment, resisting the inevitable sameness that you feel after you’ve seen a thousand AI-generated images, or read a hundred AI-penned newsletters. The future isn’t just AIs, it’s algorithms and humans working side-by-side. It’s not replacement, it’s augmentation.
The economist, computer scientist, and philosopher Herbert Simon coined the term attention economy in the 1970s. Economists know that what’s scarce is valuable, and Simon realized that since the world was awash in information, what would become valuable was that which information consumed: Our attention.
Simon could scarcely have anticipated the quantity of information with which a human in 2023 must contend.
Set aside for a moment that there are now twice as many humans alive as there were when he wrote those words, because that’s a mere doubling of ideas. We now spend more than six hours a day online, and as the tiny red numbered dots on our screens remind us, the online world doesn’t stop when we do. The average human is barraged by ads, notifications, and messages across dozens of platforms. Each of these trends compound the other, driving a flood of information consumes every moment of our attention.
AI and automation will make this flood a tsunami.
Algorithms are supplanting content marketing and copywriting: CNET has already used AI to write posts (with predictably bad results) and startups promise to generate clickbait-worthy bites of content to lure in readers. We won’t know what’s authentic and what’s manufactured. And if information consumes our attention, then automation consumes our trust.
The antidote to automation
So what becomes valuable in a world of pandering-at-scale where we can’t separate humans from machines and messaging from manipulation?
Ironically, technology has given us the tools to fight back against the worst of digital fakery, by making it easier than ever to connect with actual humans. Technology lets us meet, work, live, and interact—one-to-one or many-to-many—for free, around the world. And not just virtually: Online dating apps have real-world impacts that are changing the demographics and cultures of countries; hashtags beget million-person protests; a viral video can spark a rogue party. We have never been so connected.
No surprise that instructor-led, cohort-based courses have replaced simple video lectures, or that Discord and WhatsApp chatrooms are where we go to find our friends. Whether it’s a restaurant recommendation, background checks on a new hire, or insight into a new product, our connections are a bulwark against the information flood, a defensive wall against that which would distract us.
With solopreneurs and pop-up distributed companies challenging traditional brands, marketers are quickly realizing that the only sustainable competitive moat is community. Companies have abandoned traditional roles—VP of Marketing, VP of Sales—in favor of intrinsic, integrated jobs like head of community or head of growth. The product is the community is the upselling tool.
Connection is fundamental for distributed teams
Connection isn’t just between a startup and its beach-head markets, though. Solopreneurs need to connect with their mercenaries, suppliers, and service providers around the world; distributed teams need to maintain culture and accountability at a distance. The very nature of work has changed, and they’ve dramatically increased the importance of connection.
The foundations of remote work have been in place for decades. Notebook computers and digital tools made the workplace portable; chat, email, and videoconferencing let people work together when they were apart; smartphones made teams reachable around the clock; and the move to SaaS productivity suites eliminated the LANs and licenses of client-server IT.
But it took a pandemic to force us to use it.
The Federal Government of Canada had a plan to roll out Microsoft Teams over a period of three years. When COVID hit, it took them six weeks. In the spring of 2020, every employee in the private and public sector got a crash course in working online.
At the same time, lockdown made high-priced tech hubs much less attractive. Workers left expensive cities and their sky-high rent for cheaper towns. Tropical destinations launched remote-work visas to lure well-off tech workers to their shores. Around the Toronto metropolitan area, families adopted a “drive-until-you-qualify” approach: Keep driving away from the city until you qualify for a mortgage.
Recruiters took note, realizing that they could find amazing employees outside the usual time zones. And with platforms like Shopify, Patreon, and Upwork, frustrated employees working for big tech struck out as Solopreneurs—launching courses, consulting, working as mercenary coders, and embracing the gig economy.
All a startup really has is its team. The reality of a workforce in 2023 is vastly different from what it was in 2019, and startups are changing. This means a rethinking of cap tables, employment law, team management, customer development, and almost every other facet of building an early-stage company.
Connections mean organizations themselves can be decentralized. Investments are no longer local: The Techstars accelerator in Toronto has graduated entire cohorts from Nigeria. Business travel is different, too: We crave experiences and novelty, and bundle more connections into fewer trips. Even immigration has changed: Startup visas are abundant, but why face the hassle of borders when you can connect from anywhere?
What startups must do immediately
The pandemic already forced the adoption of technology to support remote work and distributed teams. But that’s only the surface of how the new focus on authentic connections plays out:
- Community as a competitive moat. With so much competition, it’s never been more important to create a niche group of followers, fans, and advocates. They’re your beach-head, your focus group, and your social proof. Newsletters are out, Discord is in.
- Plan for in-person interactions. Just because virtual is cheaper than in-person doesn’t mean you can neglect direct connections. In fact, recent studies show humans really do need it. A distributed team needs time in person, so calendars and meeting structure needs to change for maximum team effectiveness.
- Authenticity as a brand differentiator. How can your direct connections to customers improve your sales and reduce your churn? The rise of Product-Led Growth means the product itself, not a human, does intrinsic upselling, which in turn reduces real interactions. What will you replace that with?
- Change your recruiting strategy. 10X developers may live halfway around the world. You have access to new talent pools, provided you can build the platforms to make them communicate and collaborate at a distance. How does this change your business plans? Can they even receive stock options in your startup?
- Consider new channels. The days of a well-defined, multi-step supply and distribution channel are now over. In its place is a web of resellers, affiliates, influencers, shipping firms, and online storefronts. Connections have turned a channel into a mesh of relationships, and the tools you use to manage and compensate it need rethinking.
So what’s Startupfest going to do?
Normally, our manifestos are more aspirational, picking a broad theme on which our speakers and mentors can build. This year, we’re being much more specific, because we think these two inexorable forces—distribution and augmentation—warrant a more direct approach. We’ve included some concrete advice for founders above.
We’re also taking these things to heart ourselves, because tomorrow’s humans, tomorrow’s investors, tomorrow’s organizations, tomorrow’s conferences—and yes, society itself—are both connected and augmented. Here are some of the ways we’re practicing what we preach:
- We’re going to infuse AI tools throughout the work, augmenting the content, activations, and messaging we use—all while focusing on genuine, meaningful content. We’ll even mark which parts of the festival were augmented by AI, so you can see it at work, and look at some of the thorny issues of truth, provenance, and compensation that generative content forces us to confront.
- We’re going to double down on the unexpected connections and genuine interactions for which Startupfest has always been famous. From the candor of grandmothers and intimacy of elevator pitches in year one, to the three days of mentorship that defined last year’s event, this has always been a thing that made Startupfest unique.
The short version 🤖
Don’t have time for this whole document? Don’t worry, we asked AI to summarize it for you!
About Startupfest 2023
Startupfest 2023 is the event of the year for startup founders, investors, and ecosystem advisors, and this year’s main themes of augmentation and connection are more relevant than ever. The future of business and work is being shaped by advanced artificial intelligence and the power of human connection, and Startupfest is at the forefront of exploring and understanding these changes.
Attending Startupfest 2023 is an opportunity to see the latest AI tools and technologies in action and to learn how they can enhance and connect your startup. From generating videos from a description and a few images, to turning books into interactive video games, to trial-and-error sketching, and helping you code alongside an AI partner. The possibilities are endless and the future is now.
Startupfest is also the perfect opportunity to connect with like-minded founders and investors, to build your network, and to learn from the best in the business. The event is known for its focus on genuine interactions, and this year is no exception. Whether it’s a restaurant recommendation, background checks on a new hire, or insight into a new product, the connections you make at Startupfest can be the key to your success.
As the world becomes increasingly digital, the importance of human connection has never been greater. Startupfest is leading the way in understanding how technology can be used to foster community and build sustainable competitive advantages. From solopreneurs to distributed teams, the event offers a wealth of resources and insights to help you connect with your stakeholders and succeed in the ever-evolving business landscape.
Startupfest is also the perfect opportunity to learn from leaders in the field of advanced AI and automation. From OpenAI, the nonprofit organization founded by Elon Musk and others, to the latest startups democratizing the technology, the event is a showcase of the best and brightest in the field. With access to GPT-4 and other powerful AI tools, attendees will have a competitive edge in the race to build AI into everything.
Don’t miss out on the opportunity to be a part of the future of business and work. Join us at Startupfest 2023 and see for yourself how augmentation and connection are shaping the startup world. With cutting-edge AI tools, genuine connections, and expert insights, this event is a must-attend for any startup founder or investor. Don’t delay, register today and be a part of the next big thing!
Why startup founders need to attend:
- Get access to the latest AI tools and technologies: As the manifesto states, AI is rapidly changing the way business is done, and startups that don’t embrace this change risk being left behind. At the International Startup Festival, attendees will have access to cutting-edge AI tools and technologies, including GPT-4 and other powerful AI tools, giving them a competitive edge in the race to build AI into everything.
- Make unexpected and impactful connections: The International Startup Festival is known for its focus on genuine interactions and connections, and this year is no exception. Attendees will have the opportunity to connect with like-minded founders, investors, and industry leaders, building relationships that can have a lasting impact on their startups.
- Learn from the best in the business: The International Startup Festival features some of the most successful and innovative startup founders, investors, and ecosystem advisors in the world. By attending, you’ll have the opportunity to learn from their experiences, insights, and wisdom, and gain valuable knowledge that can help you achieve success with your own startup.
- Stay ahead of the curve in the age of automation: As the manifesto states, automation is rapidly changing the way work is done, and startups that don’t keep up risk being left behind. At the International Startup Festival, attendees will learn about the latest developments in automation and how they can be used to enhance and connect their startups, and stay ahead of the curve in the age of automation.
- Be a part of the future of business and work: The International Startup Festival is a showcase of the most exciting and innovative startups, and by attending, you’ll be a part of the future of business and work. You’ll have the opportunity to see the latest trends and developments, and to be a part of the conversation about the future of the startup ecosystem.
Why investors should attend
- Get early access to the next big thing: The International Startup Festival is a showcase of the most exciting and innovative startups, and as an investor, you’ll have the opportunity to see the latest trends and developments, and to discover the next big thing before it becomes mainstream. With access to the most promising startups and cutting-edge technology, you’ll be in the perfect position to invest in the future.
- Learn how to navigate the AI revolution: As the manifesto states, AI is rapidly changing the way business is done, and investors that don’t understand this change risk making poor investment decisions. At the International Startup Festival, investors will learn about the latest developments in AI and how they can be used to enhance and connect startups, and gain a deeper understanding of the AI revolution and how to navigate it.
- Connect with like-minded investors and industry leaders: The International Startup Festival is the perfect opportunity for investors to connect with like-minded individuals and industry leaders. You’ll have the opportunity to build your network, share insights, and learn from the best in the business.
- Stay ahead of the curve in the age of automation: As the manifesto states, automation is rapidly changing the way work is done, and investors that don’t keep up risk missing out on the next big opportunity. At the International Startup Festival, investors will learn about the latest developments in automation.
Why regions should send a delegation
The International Startup Festival in Montreal is a must-attend event for any startup founder or entrepreneur looking to stay ahead of the curve in the rapidly changing business landscape. The festival’s focus on augmentation and connection makes it the perfect opportunity to learn about the latest developments in AI and automation and how they can be used to enhance and connect startups.
- For founders and entrepreneurs in regions where AI and automation are not yet widely adopted, attending the festival is an opportunity to gain a deeper understanding of these technologies and how they can be used to improve their businesses. It will also provide them the chance to connect with leaders in the field and learn from their experiences, insights, and wisdom.
- For regions where the startup ecosystem is still developing, the festival provides a valuable opportunity to connect with other founders, investors, and ecosystem advisors from around the world and to build relationships that can have a lasting impact on their startups. With the access to the latest AI tools and technologies, and the chance to make unexpected and impactful connections, attending the International Startup Festival can be a catalyst for the growth of the startup ecosystem in any region.
- For regions where remote work and distributed teams are becoming more common, the festival’s emphasis on connection and building sustainable competitive advantages through community can provide valuable insights and strategies to help them navigate this new way of working.
In short, the International Startup Festival in Montreal is a unique opportunity for founders and entrepreneurs from any region to stay ahead of the curve in the rapidly changing business landscape, gain valuable insights and strategies, and connect with like-minded individuals from around the world.
Augment your startup and connect with the future at Startupfest 2023!
¹ Microsoft has a license for OpenAI technology, and acquired GitHub.
² AI can now enhance an image in ways we used to deride as impossible in spy movies and thrillers.
³ It should be said that OpenAI’s mission is to “ensure that artificial general intelligence (AGI)—by which we mean highly autonomous systems that outperform humans at most economically valuable work—benefits all of humanity.” So rolling some of the profits from AI startups back into the nonprofit is, in theory, beneficial.