Find the Fast Moving Water

Imagine this:

It's December 2017 and Bitcoin just crossed $10K for the first time.

Your grandmother is calling about the blockchain.

Your best friend just remortgaged his house to buy ETH.

The world has gone mad.

Meanwhile, you're running a tiny beverage company out of Long Island, appropriately titled Long Island Ice Tea Corp.

$4M in sales and -$15M in net income. Your stock trades in the backwaters of Nasdaq.

It's time for a big idea.

So you decide to change your name to Long Blockchain.

Overnight your share price goes wild. 380% gains.

And you haven't even bought a BTC mining rig yet.

This actually happened.

[sidenote: you told two of your friends about the plan, who bought and dumped shares and now the SEC is after you. but that's irrelevant here.]

Why am I telling you this?

Because:

Capitalizing on Trends Can Be a Powerful Growth Strategy

If you're like much of the rest of the world, you've spent the last several weeks fascinated by the power of ChatGPT.

The crypto story is valuable because it shows how aligning with a seismic tech trend can provide a powerful tailwind to even the flimsiest of investments.

This is great news if you're building a company that helps people with technology and has the potential to be even better with the application of A.I.

There's a beautiful mental model from the venture firm NFX called "Find the Fast Moving Water."

From 2017 to 2022, the fast moving water was crypto / web3.

All it took was a relevant name to ride that tailwind.

ChatGPT and AI-enabled business is the fastest moving water of today.

We're going to look at how you might use this momentum as a growth strategy.

By the way - if someone forwarded you this email:

Quote of the Week:

Fast Moving Water as a Growth Strategy

NFX's thesis is simple: large shifts in technology enable the emergence of incredibly impactful new companies that scale.

Companies that play in this new space benefit from the momentum around this new technology: being the "hot topic" enables you to attract smart employees, get media attention, and most importantly, attract users with a 10x value proposition.

In essence, the water your company plays in can be the biggest growth strategy of all.

3 Signs of Fast Moving Water

These are stolen directly from NFX but this concept is important so bear with the plagiarism:

1. Look for technology shifts that enable something new to happen

2. Look for a low-quality example that’s doing suspiciously well

3. If you show your idea to a customer and they have a physical reaction

[end plagiarism]

Being associated with crypto and web3 made growth easier.

People got greedy and threw funding at it.

Smart people got greedy and changed careers.

I'm still hodling my 1.5 BTC.

But my life was never materially different (except when I liquidated some crypto to paint my house).

Crypto has enabled something new. But nothing universally IMPORTANT (yet).

That's why A.I. tech is different.

A.I. Tech is the Fast Moving Water of Today

Despite working in tech, I don't care about the latest iPhone and I don't want to know about fancy gadgets.

But I do love software that makes life better for people.

In the last few weeks, I've done some pretty amazing things with OpenAI technology:

• Written basic Flask web apps despite my very limited Python knowledge

• Generated the logo and pixel art illustrations for every issue of this newsletter

• Used ChatGPT to challenge my thinking and assumptions on topics

• Diagnosed a medical condition when my son was sick (I verified with a doctor, don't worry)

It's obvious that A.I. technology is a 10x multiplier that will be applied across hundreds of industries.

Here are 5 examples of industries that have already been transformed:

1. Web Development: I will (probably) never use StackOverFlow again. Why bother wondering if someone's posted solution will work for you when you can take ChatGPT's recommendation, run the script and have it troubleshoot the error log if it doesn't work?

2. Design: create your own brand aesthetic for nearly zero dollars with Dall-e and other tools.

3. Education: I don't even want to Google anymore. Why sort through keyword-stuffed fluff when I can get a single response that gets to the heart of the matter? ChatGPT answers my follow-up questions directly, rather than approximate it with hit-or-miss "People Also Ask" units.

4. Medicine: my experiences with doctors over the years have shown me that doctors are subject to the same biases as everyone else. AI will help improve the accuracy and effectiveness of medical care.

5. Content: everyone has beaten this to death already but it's one of the first areas being disrupted.

Each of these is or will be 10x better / easier / cheaper when done with AI.

Should You Align Your Product or Marketing with A.I.?

In the somewhat knowable/probable future, companies will fall into 3 categories:

• artificial intelligence is a threat

• artificial intelligence is an accelerant

• artificial intelligence is irrelevant

The 5 industries I described before are all areas where A.I. will accelerate the quality of products and services. These are changing NOW and your company needs to improve its product to compete.

If you have an effective marketing narrative or strong brand but a weak product when compared to A.I. enhanced alternatives, improving the product under the hood may be all you need to do. There are plenty of products we already use that apply some form of machine learning, etc. without us being aware.

But if you have a good product but weak marketing narrative, aligning with the trend will make your marketing more effective:

• Endless PR opportunities

• FOMO-driven demand

• easier funding environment

• lower quality threshold for new ideas

If A.I. is a threat to your company, you can satisfy yourself with a dwindling share of the market or consider pivoting.

Opposing Trends Can Also Be a Growth Strategy

If A.I. is irrelevant to your industry, carry on.

Or, you can position yourself in opposition to the trend.

Example: "We don't need fancy computers to do X, just some old fashioned elbow grease."

There will always be people who love "authentic", handmade, personable products.

You could even take a position in the middle of an A.I. lane claiming that you're better than A.I.

Example: "The only SEO agency left that uses 100% REAL WRITERS to write content."

Journalists and consumers are hungry for both narrative confirmation and counter-narratives.

Both forms of positioning can be used for benefit. It may be ephemeral or it may turn out to redefine your company's future.

The Wave is Here. Be Deliberate

I'm not advocating riding the tailcoats of A.I. for the sake of it.

For relevant companies, this is an opportunity to grow by:

1. making your product better and / or

2. strengthening your marketing narrative to capture some of this trend's momentum

It's here. It's important. You should have a tentative position on it with respect to your company's growth.

But whatever you do, don't just change your name.

That guy apparently is still a fugitive.

Recommended Reading (if you subscribed recently):

How This A.I. Startup Got Its First 100 Paying Users

Create Winning Ads With These 7 Proven Techniques

How Twos Grew Organically to 5,000 Monthly Active Users

See you next week.

-Brian 🦄