AI Killed Venture Capitalism

There's a lot of talking about "the alignment issues" related to AI. According to fruitcake AI conspiracy theorists it will kill us all unless we get it right. Summed up, a solution to the alignment issue implies having machines with similar motivations and goals as us.

It's all just rubbish superstitious talk of course, just like the talk about regulating AI. New speak for "we want to have our monopoly on making money, enslaving the rest of the world, such that we get to reap all the fruits of your labour".

However, there's no talk about "the alignment issue" related to venture capital. I wonder why? 🧐

The VC alignment issue

Every single (good) entrepreneur I have ever met have been driven by the urge to create something amazing. Every single venture capitalist I have met have been driven by the urge to make more money. This results in a fundamental difference in "alignment", impossible to solve, which arguably explains why 90% of all startups fails.

The entrepreneur feel indebted towards the VC firm, while the VC firm wants to have fast ROI - So the entrepreneur chases whatever whims the VC guys throws at him in order to "prove himself for the next round of capital". This results in that the entrepreneur cannibalises long term goals, product quality, and sustainability, to make sure he's got money to pay next month's salary. I would know, I've taken almost 7 figures from a VC firm owned by a guy making 300 million dollars annually. Read my VC story here.

If the entrepreneur is told to reduce quality of services in order to cut corners and increase profitability, no sane and honest entrepreneur would consider it. However, the VC firm will constantly demand of the entrepreneur to do this if it results in a short term illusion of profitability such that the VC firm can cash out and move on to the next "victim". In a way it's the monetary equivalent of psychopathy, where the end result justifies whatever means required to reach the end goal.

The VC mindset is fundamentally incompatible with the entrepreneur mindset

The Historical problem

Historically entrepreneurs have had no options, and they've been forced to accept money, if they wanted to implement their vision. The price of starting a software company has simply been too high for the average entrepreneur to be able to do it on his own. First you have to work for several years before you even have a product you can sell. During this time period you'll need money to pay for rent and food.

In addition you have costs associated with running and operating the company, such as servers, services, additional employees capable of doing what you don't have the skills to do, etc.

Starting a successful company used to be impossible without accepting money

AI, the solution

First of all, all the above costs have significantly been reduced. For instance, today an entrepreneur working out of a third world country can accept 50% remote work for a company in the US selling his time and services, resulting in a salary that's 5x as high as the required salary to make a living. This is referred to as "boot strapping" and have arguably always been a solution. However, due to "the shelter in place rubbish" we did for a couple of years, companies with far deeper pockets are willing to pay for remote workers to an extent today nobody were willing to do pre-Kokorona.

In addition you don't need expensive hardware today to the same extent you needed 10 years ago. Need a kick-ass CDN to deliver your services at the speed of light across the globe? $25 at CloudFlare. Need a kick ass email API to automate sending of marketing emails to your subscribers? $89 at SendGrid. Need the same server infrastructure as Google is operating on? $78 at DigitalOcean. Need SEO services you'd previously had to pay 10,000+ per month for from some marketing company? $50 per month at SEOBility if you're willing to take the DIY approach.

Our total monthly price for hardware and services is probably less than $250 per month

And for that, we've got the same infrastructure as Google, capable of serving 1,000+ AI machine learning clients, with automated growth as needed for the future. All we need to solve now, is the manpower problem.

The manpower problem

This has historically been the largest problem related to starting a successful software company. However, ChatGPT and similar large language models have significantly reduced the importance of this. Today, if you're willing to spend a lot of your own time, you can easily teach yourself the skills required to fill in at least 5x as many "hats" as you could a decade ago, simply because of AI coming to your rescue, allowing you to approach (almost) everything as a DIY thing.

Need a social media manager? Well, that's literally a button on your page! Don't believe me, click the "Share to Facebook" button at the bottom of this article, and see how we approach almost everything related to SMO. Thank you ChatGPT 😁

2 years ago, creating such high quality social media status updates would easily require a human being working full time doing nothing else - Which of course is an additional cost of 3,000 to 6,000 dollars per month, depending upon where you live in this world.

Need 24/7 support providing customer service in a Q&A style on your website, to serve clients and also collect leads? Another button on your webpage. Don't believe me, try our "Frank" at the bottom right corner of this page. Frank's arguably our best sales executive at AINIRO, and responsible for roughly 20% of all sales we close. This used to be 5 full time employees, working shift hours, for a price tag of roughly 15,000 dollars per month. For the record, the AI chatbot is our product, and what we're actually selling, and we're selling it for €49 per month.

€49 per month in AI saves us $15,000 per month

Conclusion

VC was always going to die, it's its destiny. It's a predator mindset, based upon the rich stealing from the (skilled) poor, for no other reasons than to become even more rich, ignoring the effects on the world and the facts of that it's ipso facto slavery and theft. However, AI put the last nail into your coffin. AI killed venture capitalism, and it's the best thing that could happen to us as a specie.

Now go home and lick your wounds you VC shmucks! Because in the end, it's all you are! Predators seeking to feast on other people's ability to deliver brilliance! Like a virus, living on its host as a parasite, sustaining your own gluttony existance by destroying the host. You're nothing but a disease of society, and AI cured us ...

VC is dead, AI killed it! Long live the AI! 😁