3 From Techquity
Sorry we missed last week, It has been super busy at Techquity HQ. We are fielding many inquiries about how to apply AI in the enterprise or inside of organizations. Here’s our learnings for the week.
AI Regulation — Too Soon To Tell But Keep An Eye Out
Last week was all about AI regulations with some really great articles and threads in social media about the Executive Order that came out last week from the White House and the UK AI Safety Summit. Many of our client companies are asking us about what AI strategy they should pursue. The EO was light on specifics aside from putting some (very high) thresholds for reporting on the largest models based on how many compute operations are required to train them and the bandwidth of networking in AI clusters where training is happening. For businesses building on AI, the threshold is so high that its unlikely to touch most activities, save for the very large models. That said, there were nuggets about an as-yet undefined registry of AI models. Also, it is unclear what parameters will be for running fresh training runs atop existing models.?
Techquity Take: Yes, GPT4 and OpenAI are probably the fastest way to get up and running quickly but if you are building something differentiated, you will likely want to control your AI Stack so watch these regulations carefully.
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Earnings Surprise Not Correlated with SaaS Multiples
Thomas Tunguz, an excellent VC and prolific writer, posts about how during the past year SaaS companies switched from growth to profits. You would think that following the wishes of the market would be rewarded with higher share prices. Alas, no. Tunguz measured earnings surprises and found zero correlation between valuation multiple and earning surprise.?
Techquity Take: Following the fashion and short-termism will not always be immediately rewarded so think hard before you make big changes to your organization and roadmap based on market whims.
Online Dating in the Dumps
The founder of online dating company Bumble is stepping down in the midst of lackluster results. Bumble is not alone in experiencing an online dating bust. Industry giant Match.com reported weak quarterly results with dropping usage of its flagship Tinder dating app.. Five years ago online dating was positioned as a permanent shift in consumer behavior. Today, college kids are apparently eschewing online matchmaking, darkening the future of the sector.??
Techquity Take: Obviously, consumer preferences are fickle and fast-moving. It is likely the matchmaking behavior moved somewhere else, rather than disappeared. Watch for a new way people are meeting to pop up on the online horizon sometime soon.?