{"id":296659,"date":"2024-02-16T06:04:57","date_gmt":"2024-02-16T14:04:57","guid":{"rendered":"https:\/\/www.saastr.com\/?p=296659"},"modified":"2024-02-15T21:22:28","modified_gmt":"2024-02-16T05:22:28","slug":"an-ai-deep-dive-with-lightspeed-and-typeface-embracing-the-potential-addressing-the-challenges","status":"publish","type":"post","link":"https:\/\/www.saastr.com\/an-ai-deep-dive-with-lightspeed-and-typeface-embracing-the-potential-addressing-the-challenges\/","title":{"rendered":"An AI Deep Dive with Lightspeed and Typeface: Embracing the Potential, Addressing the Challenges"},"content":{"rendered":"<p style=\"font-weight: 400; text-align: left;\"><span style=\"font-weight: 400;\">Alex Kayyal and Julie Kainz, Partners at Lightspeed, shared at <a href=\"https:\/\/www.saastrannual2024.com\/\" target=\"_blank\" rel=\"noopener\">SaaStr Annual<\/a> a framework they developed around how to think about this new era of <a href=\"https:\/\/www.saastr.com\/category\/topics\/ai\/\" target=\"_blank\" rel=\"noopener\">Artificial Intelligence<\/a> in SaaS, what opportunities are out there for startups, and how to think about incumbents. <\/span><span style=\"font-weight: 400;\">Together with Abhay Parasnis, founder and CEO of Typeface, they chat about what it looks like to be a builder at the forefront of Generative AI.<\/span><\/p>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Lightspeed has invested in companies for about 20 years, with roots in early-stage Enterprise investing. <a href=\"https:\/\/www.saastr.com\/gartner-2024-will-be-tougher-than-we-thought-but-well-still-cross-1-trillion-in-software-spend\/\" target=\"_blank\" rel=\"noopener\">Enterprise technology spend has remained resilient<\/a>, with Cloud spend tripling over the last year. The real shift they\u2019re noticing is with <a href=\"https:\/\/www.saastr.com\/sapphire-ventures-genai-funding-is-up-271-everything-else-down-36\/\" target=\"_blank\" rel=\"noopener\">GenAI<\/a> and the impact of that shift on the SaaS community.\u00a0<\/span><\/p>\n<p style=\"font-weight: 400;\">\n<iframe title=\"YouTube video player\" data-src=\"https:\/\/www.youtube-nocookie.com\/embed\/M_GFi7-Wcr8?si=ZV-OlkZAuhiL5uKg\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" class=\"lazyload\" data-load-mode=\"1\"><\/iframe><\/p>\n<h2><span style=\"font-weight: 400;\">In our Gen AI Era \u2728<\/span><\/h2>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"alignnone size-medium wp-image-296676 lazyload\" data-src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2024\/02\/IMG_3776.jpeg?resize=600%2C338&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"600\" height=\"338\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 600px; --smush-placeholder-aspect-ratio: 600\/338;\" \/><noscript><img data-recalc-dims=\"1\" decoding=\"async\" class=\"alignnone size-medium wp-image-296676\" src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2024\/02\/IMG_3776.jpeg?resize=600%2C338&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"600\" height=\"338\" \/><\/noscript><\/p>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Lightspeed breaks down this major technological shift in the Enterprise into three buckets:<\/span><\/p>\n<ol style=\"font-weight: 400;\">\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Foundation Model\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Enablement<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Application\u00a0<\/span><\/li>\n<\/ol>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Vertical SaaS will be a big part of it. The real opportunity of GenAI is enabling industries that have been slow to adopt software \u2014 services like legal, accounting, and healthcare.\u00a0<\/span><\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"alignnone size-medium wp-image-296675 lazyload\" data-src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2024\/02\/IMG_3777.jpeg?resize=600%2C326&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"600\" height=\"326\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 600px; --smush-placeholder-aspect-ratio: 600\/326;\" \/><noscript><img data-recalc-dims=\"1\" decoding=\"async\" class=\"alignnone size-medium wp-image-296675\" src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2024\/02\/IMG_3777.jpeg?resize=600%2C326&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"600\" height=\"326\" \/><\/noscript><\/p>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">There\u2019s an incredible amount of opportunity and so much of what history books will say about this era is happening right now.\u00a0<\/span><\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"alignnone size-medium wp-image-296674 lazyload\" data-src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2024\/02\/IMG_3778.jpeg?resize=600%2C336&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"600\" height=\"336\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 600px; --smush-placeholder-aspect-ratio: 600\/336;\" \/><noscript><img data-recalc-dims=\"1\" decoding=\"async\" class=\"alignnone size-medium wp-image-296674\" src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2024\/02\/IMG_3778.jpeg?resize=600%2C336&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"600\" height=\"336\" \/><\/noscript><\/p>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The first era of Cloud was around \u201899 when Salesforce pioneered the shift. CRM wasn\u2019t a new category, but they were done on-premise. This is what Lightspeed calls the 1.0 era, where SaaS was really about the system of record.\u00a0<\/span><span style=\"font-weight: 400;\">You move one over to 2.0, the system of engagement, and all of a sudden, it wasn\u2019t just recording and storing data. It was about activating and connecting systems and apps to it.\u00a0<\/span><span style=\"font-weight: 400;\">Then, 7-8 years ago, we had the early innings of AI \u2014 The first automation of how to drive more intelligence. This was a precursor to the GenAI movement.\u00a0<\/span><span style=\"font-weight: 400;\">Now, finally, we\u2019re in the 4th era. Lightspeed calls it the Era of Cognition. It\u2019s not only about automating a small part of a task but creating a new workflow where work gets done. We still don\u2019t know where the category winners will be.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">SaaS 4.0 Implications for Software Companies\u00a0<\/span><\/h2>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">There are a few implications for software companies as we shift into this 4th generation.\u00a0<\/span><\/p>\n<ol style=\"font-weight: 400;\">\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Creativity is being completely democratized.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">There\u2019s an evolution from being data-driven to a more sensing approach. Instead of suggesting the next best video based on preferences, we create a video that matches your preferences from scratch.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">We\u2019ve entered into a new era of personalization, with massive opportunities in content, education, and healthcare.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Privacy, intellectual property, ethics, and safety implications are emerging.\u00a0<\/span><\/li>\n<\/ol>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">With all of this opportunity comes huge responsibility. With an ecosystem that\u2019s moving incredibly fast and lacks ownership to some extent, there\u2019s an unknown for many folks of what\u2019s happening under the hood.\u00a0 <\/span><span style=\"font-weight: 400;\">We must ask ourselves the implications of such personal data being used and shared with employees, organizations, customers, and users.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Incumbents vs. Startups<\/span><\/h3>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">How have the dynamics shifted between <a href=\"https:\/\/www.saastr.com\/who-will-win-the-gtm-ai-race-with-stage-2-capital-co-founder-and-managing-director-mark-roberge\/\" target=\"_blank\" rel=\"noopener\">incumbents and startups<\/a> because of GenAI?\u00a0<\/span><span style=\"font-weight: 400;\">Today, the ability to access large amounts of proprietary data is more important than solely being agile and fast-moving. This changes the playing arena for startups.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">A Framework for Software Entrepreneurs<\/span><\/h2>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"alignnone size-medium wp-image-296667 lazyload\" data-src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2024\/02\/IMG_3785.jpeg?resize=600%2C337&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"600\" height=\"337\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 600px; --smush-placeholder-aspect-ratio: 600\/337;\" \/><noscript><img data-recalc-dims=\"1\" decoding=\"async\" class=\"alignnone size-medium wp-image-296667\" src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2024\/02\/IMG_3785.jpeg?resize=600%2C337&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"600\" height=\"337\" \/><\/noscript><\/p>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">As venture investors at Lightspeed, they get to meet a lot of companies. Some big dimensions that get Alex and Julie most excited land within five areas.\u00a0<\/span><\/p>\n<p><b>1. Data<\/b><\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"alignnone size-medium wp-image-296666 lazyload\" data-src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2024\/02\/IMG_3786.jpeg?resize=600%2C329&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"600\" height=\"329\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 600px; --smush-placeholder-aspect-ratio: 600\/329;\" \/><noscript><img data-recalc-dims=\"1\" decoding=\"async\" class=\"alignnone size-medium wp-image-296666\" src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2024\/02\/IMG_3786.jpeg?resize=600%2C329&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"600\" height=\"329\" \/><\/noscript><\/p>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Is it proprietary or publicly available? Data is a lot more valuable if you can take advantage of proprietary, private data. For example, if you\u2019re building an inventory optimization company, what will be more relevant: weather patterns of buying ski gear or integrating into the transaction history of the merchant and driving insight that way?\u00a0<\/span><span style=\"font-weight: 400;\">If you have access to data in a public domain, large incumbents do, too. Look for unique data sets you can develop in your customers to drive insight and automation.\u00a0<\/span><b><\/b><\/p>\n<p><b>2. Frequency of Interaction<\/b><\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"alignnone size-medium wp-image-296665 lazyload\" data-src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2024\/02\/IMG_3787.jpeg?resize=600%2C332&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"600\" height=\"332\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 600px; --smush-placeholder-aspect-ratio: 600\/332;\" \/><noscript><img data-recalc-dims=\"1\" decoding=\"async\" class=\"alignnone size-medium wp-image-296665\" src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2024\/02\/IMG_3787.jpeg?resize=600%2C332&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"600\" height=\"332\" \/><\/noscript><\/p>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The beauty of software is it powers workflows. However, not all workflows are created the same. Some tasks happen once a month or quarter or even per year. Others happen daily or weekly, and Lightspeed\u2019s excitement regarding the next generation of software is focused on the frequency of interaction because it drives a lot more engagement and value with customers.\u00a0<\/span><b><\/b><\/p>\n<p><b>3. Depth of U\/I<\/b><b><\/b><\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"alignnone size-medium wp-image-296664 lazyload\" data-src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2024\/02\/IMG_3788.jpeg?resize=600%2C340&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"600\" height=\"340\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 600px; --smush-placeholder-aspect-ratio: 600\/340;\" \/><noscript><img data-recalc-dims=\"1\" decoding=\"async\" class=\"alignnone size-medium wp-image-296664\" src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2024\/02\/IMG_3788.jpeg?resize=600%2C340&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"600\" height=\"340\" \/><\/noscript><\/p>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">What product are you actually building? When comparing building a product today vs. 20 years ago, 20 years ago, it took $20M just to get an email server up and running. It\u2019s incredible how much amazing tech is at our fingertips today, so product gravity matters a lot. Just having a thin wrapper around an existing workflow won\u2019t drive a sustainable advantage. It\u2019s more about how many workflows you can drive, the community you can build around the product, and moving beyond initial use cases.\u00a0<\/span><b><\/b><\/p>\n<p><b>4. 10x Value Proposition<\/b><b><\/b><\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"alignnone size-medium wp-image-296663 lazyload\" data-src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2024\/02\/IMG_3789.jpeg?resize=600%2C336&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"600\" height=\"336\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 600px; --smush-placeholder-aspect-ratio: 600\/336;\" \/><noscript><img data-recalc-dims=\"1\" decoding=\"async\" class=\"alignnone size-medium wp-image-296663\" src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2024\/02\/IMG_3789.jpeg?resize=600%2C336&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"600\" height=\"336\" \/><\/noscript><\/p>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">There\u2019s an amazing opportunity to drive 10x improvements from a use case product collaboration perspective. Decision makers in software are inundated with tools or companies. So, ask yourself how to drive a 10x improvement, whether through the product, experience, business model, etc. This will be a tidal shift in terms of what can be built, and the companies that drive significant improvements will be the winners.<\/span><b><\/b><\/p>\n<p><b>5. High-Level Intelligence\u00a0<\/b><b><\/b><\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"alignnone size-medium wp-image-296662 lazyload\" data-src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2024\/02\/IMG_3790.jpeg?resize=600%2C337&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"600\" height=\"337\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 600px; --smush-placeholder-aspect-ratio: 600\/337;\" \/><noscript><img data-recalc-dims=\"1\" decoding=\"async\" class=\"alignnone size-medium wp-image-296662\" src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2024\/02\/IMG_3790.jpeg?resize=600%2C337&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"600\" height=\"337\" \/><\/noscript><\/p>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">What are you automating? Is it a nice-to-have, low-level intelligence that could help a business but not move the needle forward? That will be a very different outcome for a company than automating a more high-level automation that drives meaningful ROI. Go back to the customers and figure out what\u2019s in it for them.\u00a0<\/span><\/p>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">These five areas are Lightspeed\u2019s framework for building software.\u00a0<\/span><\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"alignnone size-medium wp-image-296661 lazyload\" data-src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2024\/02\/IMG_3791.jpeg?resize=600%2C341&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"600\" height=\"341\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 600px; --smush-placeholder-aspect-ratio: 600\/341;\" \/><noscript><img data-recalc-dims=\"1\" decoding=\"async\" class=\"alignnone size-medium wp-image-296661\" src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2024\/02\/IMG_3791.jpeg?resize=600%2C341&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"600\" height=\"341\" \/><\/noscript><\/p>\n<h2><span style=\"font-weight: 400;\">A Look Inside Typeface\u00a0<\/span><\/h2>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">When having these discussions about GenAI and fast-growing companies within the space, people often expect there to be a well-laid plan. The reality is there were a lot of coincidental moves. Abhay Parasnis, the CEO and founder of Typeface, has always loved software and programming. His first project was working on Java.\u00a0<\/span><span style=\"font-weight: 400;\">In November of 2021, Abhay was the CTO at Adobe, and they were investing a lot in AI, but not GenAI. Early models weren\u2019t quite there, but you could see how software would fundamentally change.\u00a0<\/span><\/p>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\"><a href=\"https:\/\/www.saastr.com\/the-5-ways-ai-will-transform-creativity-with-adobe-cso-evp-scott-belsky\/\" target=\"_blank\" rel=\"noopener\">Adobe sat at the intersection of creativity and science<\/a>, and the world of content in Enterprise has been stuck in the dark ages because there wasn\u2019t a 10x benefit yet. GPT even in early form showed it was clear we\u2019d get to a place where the entire world\u2019s content architecture for companies would go through a massive inflection point. <\/span><span style=\"font-weight: 400;\">It\u2019s the same as when the original printing press happened. It was only one form until typefaces were invented. You couldn\u2019t personalize your story. Typeface\u2019s thesis is that if the underlying GP models are the equivalent of an AI printing press, you need personalization for every story and brand. So, they went and built that software.\u00a0<\/span><\/p>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">When Typeface began 15 months ago, it was before ChatGPT was released. One question early investors often asked was what the platform would be because none existed. Investors saw the arc of where it could land, and there was a conviction around it, but they thought it would take another 3-5 years.\u00a0<\/span><span style=\"font-weight: 400;\">But here they are within a year, and everything has changed.\u00a0<\/span><span style=\"font-weight: 400;\">Whenever there\u2019s a disruptive shift, you have to start with a deep product thesis, a heavy app layer. This is required whether you\u2019re a startup or an incumbent.\u00a0<\/span><\/p>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Companies like Adobe or Microsoft have products that are still considered a gold standard 30-40 years later, which is rare. It\u2019s because they have a deep tech moat and an exceptional product user experience.\u00a0<\/span><span style=\"font-weight: 400;\">When you\u2019re a big company, your ability to disrupt your own business takes a significant amount of commitment and discipline and an ability to move and adapt to a fast-moving market. The incumbent will likely never commit because their economic incentives are misaligned.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Accessing Proprietary Data as a Startup<\/span><\/h3>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Typeface is going through this journey now with data uniqueness. For the first time, software isn\u2019t just about codifying your intellectual property through a bunch of automation and algorithms. It\u2019s about extracting unique patterns through data sets and verticalizations.\u00a0<\/span><span style=\"font-weight: 400;\">The hardest thing for incumbents is having a gold mine of data and assets, but they didn\u2019t build their businesses with those architectural patterns, so they can\u2019t extract insights. But, if you\u2019re a startup, you don\u2019t have access to that data gold mine.\u00a0<\/span><\/p>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The best strategy is to partner with these incumbents who don\u2019t have ways of extracting that value. Many incumbents don\u2019t know how to connect tremendous data to GenAI and are nervous about handing over that data to OpenAI, Microsoft, or Google because they\u2019re worried about their proprietary data landing in the hands of incumbents. <\/span><span style=\"font-weight: 400;\">So, many companies with gold mines of data are extremely excited about working with startups. With Enterprise, you have to set yourself up to access data from a security perspective. As exciting as GenAI is, Abhay thinks it will take a long time to make this shift.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Partnerships Between Startups and Incumbents<\/span><\/h3>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">In the GenAI space, incumbents won\u2019t stand still, but there won\u2019t be one winner-take-all. Every big player will own their share of the prize in the coming decade. As a startup, can you ignore the investments of Salesforce, Google, or Microsoft? Or can you capitalize on their interests in the space?\u00a0<\/span><\/p>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Typeface struck deep partnerships with Microsoft, Google, and Salesforce because distribution is the new product mode in GenAI. You can\u2019t just build the product. You need distribution advantages like proprietary data.\u00a0<\/span><span style=\"font-weight: 400;\">The biggest misconception is that startups think large corporations want to destroy startups. Of course, there\u2019s competition, but many of these incumbents are looking for partners to accelerate their success.\u00a0<\/span><\/p>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">A rising tide lifts all boats. The size of distribution power and even brand association helps lift you up from being a person in the room that no one\u2019s heard of to having an aura around you.\u00a0<\/span><span style=\"font-weight: 400;\">For Typeface, having that association is incredibly valuable and has given them access to Enterprise customers. You have to live with that contradiction of exploiting their brand but being mindful that they have their own self-interest.\u00a0<\/span><\/p>\n<p style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Can you find those areas in an incumbent\u2019s ecosystem where they won\u2019t have the incentive to go? We\u2019re at a moment in time where there\u2019s urgency. Startups can capitalize on that and hitch the wagon to the bigger boat and take that tailspeed as far as it can go.\u00a0<\/span><\/p>\n<p><iframe title=\"YouTube video player\" data-src=\"https:\/\/www.youtube-nocookie.com\/embed\/M_GFi7-Wcr8?si=ZV-OlkZAuhiL5uKg\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" class=\"lazyload\" data-load-mode=\"1\"><\/iframe><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Alex Kayyal and Julie Kainz, Partners at Lightspeed, shared at SaaStr Annual a framework they developed around how to think about this new era of Artificial Intelligence in SaaS, what opportunities are out there for startups, and how to think about incumbents. Together with Abhay Parasnis, founder and CEO of Typeface, they chat about what it looks like to be a builder at the forefront of Generative AI.<\/p>\n","protected":false},"author":13,"featured_media":297121,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","om_disable_all_campaigns":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_wpscp_schedule_draft_date":"","_wpscp_schedule_republish_date":"","_wpscppro_advance_schedule":false,"_wpscppro_advance_schedule_date":"","_wpscppro_custom_social_share_image":0,"_facebook_share_type":"","_twitter_share_type":"","_linkedin_share_type":"","_pinterest_share_type":"","_linkedin_share_type_page":"","_instagram_share_type":"","_medium_share_type":"","_threads_share_type":"","_selected_social_profile":[]},"categories":[24898,31,122,20],"tags":[],"class_list":["post-296659","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ai","category-blog-posts","category-featured-videos","category-videos"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2024\/02\/youtube-thumbnails-AI-38.png?fit=1000%2C563&quality=70&ssl=1","jetpack_shortlink":"https:\/\/wp.me\/p5oib2-1faP","jetpack_sharing_enabled":true,"fifu_image_url":"https:\/\/www.saastr.com\/wp-content\/uploads\/2024\/02\/IMG_3776-600x338.jpeg","_links":{"self":[{"href":"https:\/\/www.saastr.com\/wp-json\/wp\/v2\/posts\/296659","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.saastr.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.saastr.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.saastr.com\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/www.saastr.com\/wp-json\/wp\/v2\/comments?post=296659"}],"version-history":[{"count":0,"href":"https:\/\/www.saastr.com\/wp-json\/wp\/v2\/posts\/296659\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.saastr.com\/wp-json\/wp\/v2\/media\/297121"}],"wp:attachment":[{"href":"https:\/\/www.saastr.com\/wp-json\/wp\/v2\/media?parent=296659"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.saastr.com\/wp-json\/wp\/v2\/categories?post=296659"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.saastr.com\/wp-json\/wp\/v2\/tags?post=296659"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}