A college student reached $64k/mo in 6 months by being an AI first mover

https://www.indiehackers.com/post/how-a-college-student-reached-64-000-mo-in-6-months-by-being-an-ai-first-mover-ba7981f6e1

by ChanningAllen • 3 years ago

99 91 3 years ago

indiehackers.com

ulrikhansen542• 3 years ago

There are several stories of companies going from $0 to >$5M ARR in just a few months with the boom in LLM-driven applications. The downside for these types of apps is that churn rates are through the roof, and will probs die when the LLM fad inevitably fizzles.

nadermx• 3 years ago

Why would it fizzle? It provides an actual utility

mitthrowaway2• 3 years ago

I think it probably won't fizzle, but one reason it could is if competition drives down margins to the point where LLMs become a commodity while technical progress stagnates and their abilities saturate. Another possibility is that they could get banned or heavily regulated.

yamtaddle4• 3 years ago

There are a lot of companies "embracing AI" for CEO-fell-for-the-hype / CEO-hopes-investors-will-fall-for-the-hype reasons, that aren't related to actual business needs or benefits from using AI. Lying (to themselves, and/or others) about how use of AI is improving business efficiency. Forcing it on people down the chain whose reality-based "um, this mandate to use AI tools for this is actually making things take longer" complaints are being ignored.

Many of these companies are throwing money at these kinds of early-mover products, but are likely to stop doing that as people start to get wise to just how useful all this actually is, and for what.

[EDIT] This is not to claim that AI-based products won't find actually beneficial uses in various companies, but a lot of these trivial get-to-market-fast companies are raking in quite a bit of money from hype-chasers, and that money isn't going to stick around long-term.

tra3• 3 years ago

Like any gold rush? Right now, gold nuggets are strewn around and you can grab them with your bare hands. Pretty soon you'll need excavators, sifters and all that infrastructure.

Good on him for making this much cash. Sure, right time and right place but you still need to be able to execute.

r00fus• 3 years ago

Of course, it will not last forever but like being "devops" when AWS started gaining traction or jumping on the crypto bandwagon - now you know how to play the game, there's literally no downside to jumping on this bandwagon if you can find a profitable niche even for a while as you gain expertise.

jrpt2• 3 years ago

LLMs aren't a fad though. Yasser has thousands of customers paying him real money because they find value in what his product does.

I'm running a somewhat similar website (https://Docalysis.com/) where users chat with files, and it's clear there's a lot of value being added, so people are willing to pay.

What's less clear is how this all plays out when there's more competition, but it's not like we'll all go out of business. It'll just be a bit harder, or you'll have to do things to differentiate. I'm planning on differentiating more, just using the current product as a starting point. Yasser probably is thinking along similar lines.

wefarrell• 3 years ago

I do expect constraints to emerge, in the form of regulatory capture and copyright challenges from content owners.

ulrikhansen542• 3 years ago

New architectures and models will inevitably replace LLMs, and it'll probably happen pretty quickly. The models we're using today will be outdated in 12 months time. The next big thing will a fusion of LLMs, LVMs (large vision models) and LAMs (large audio models) into modal-modal models.

james-revisoai3• 3 years ago

Beware that most 2020-2021 OpenAI startups haven't survived to today, especially since ChatGPT allowed free use of most B2C use cases (article writing, paraphrasing, etc). I posted a brief postmortem of my experience from 2021 to 2023 when I did at one point launch a similar product to yours which, if you got into this more recently, may be worth reading.

anonzzzies• 3 years ago

My company is considered 'late moving' ; we like stability, no stress, high profits, healthy growth (no growth is better than unhealthy growth) etc. We are at almost 2 decades of profit (and a lot of profit at that), no VC capital or other capital for that matter.

We have been adding LLMs to our products in a little test for clients who want to try it. It's not a fad as far as I got the feedback; it saves people are lot of work and allows juniors at our clients to do far more. I believe it retains clients and will pick up new ones. So when the fads with LLMs die out, the products that have marketshare and add them (b2b anyway), will benefit a lot.

teach• 3 years ago

Somebody always wins the lottery. This doesn't mean that playing the lottery is a useful path to riches for anyone else.

Edited to add: This is not an indictment on the college student in question! Congrats to him for being prepared to seize on an opportunity and executing well.

k2enemy• 3 years ago

Did he win the lottery though? There's a lot of MRR, but I didn't see anything about profit. He could be losing money.

jrpt2• 3 years ago

You're right that this stuff isn't cheap. I'm running https://Docalysis.com/ (a chat with files website) which has expenses growing every month, so you need to make sure your price is above what it costs you, and can't give everything away for free.

His product gives you a few thousand tokens for free, then makes you add your own OpenAI API key after that, so that he isn't paying for the chat responses from then on.

theautist• 3 years ago

He did mention towards the end of the interview that he made some money. Doesn't specify how much though.

pmart123• 3 years ago

A lot of the ai plays seems like small vertical business opportunities that fill a particular niche that could be quickly profitable for a small team, but aren't really scalable or could quickly become obsolete.

brundolf• 3 years ago

A lot of successful SaaSes are this way. Niches are things that other people might not have solved already, and big players may not even want to bother solving. If you're happy with not eating the world, you can make a good business in a niche

paulpauper2• 3 years ago

but this is 'doable' or reproducible; guessing correct numbers by chance is not. Even though there is some luck involved, this is more of a skill than just pure guessing.

el_nahual• 3 years ago

How on earth is this "winning the lottery"? Sure, there is an element of luck involved, but this is quite clearly a translation of work/sweat equity + understanding technology + exectution.

The opposite of a lottery.

theonething• 3 years ago

wins the lottery
Congrats to him for being prepared to seize on an opportunity and executing well.

Those two statements seem incongruent.

Detrytus• 3 years ago

Being prepared to seize on an opportunity and execute well is necessary, but not sufficient. There's still a whole lot of luck involved.

tbm57• 3 years ago

OpenAI continually gaining even more leverage in the business world with their API. They'll be able to charge whatever they want eventually, if they can't already

mritchie712• 3 years ago

Open source LLMs are getting pretty good. The one mosaicml[0] just released is impressive and I expect a dozen more like it by the end of the year.

0 - https://www.mosaicml.com/blog/mpt-7b out Mosiac

abxytg2• 3 years ago

there is literally a "how to" in the open AI api docs for the exact use case. I need to be more shameless the next go around.

tsss• 3 years ago

The key ingredient here is that he was lucky and had a viral tweet. Marketing is everything.

Kiro• 3 years ago

Link? I didn't find it in https://platform.openai.com/examples

econonut• 3 years ago

He might be referring to a page in the tutorials section titled, How to build an AI that can answer questions about your website: https://platform.openai.com/docs/tutorials/web-qa-embeddings

james-revisoai3• 3 years ago

I wrote more about this in another comment ("Postmortem"), as I developed a similar idea from Mid 2022 to early 2023, but made different decisions.

OpenAI had a serious focus on this that did see adoption; as early as Spring 2021 this was in their docs (linked by others), but more crucially, they quickly added an Answers endpoint(https://platform.openai.com/docs/guides/answers) specifically for this use case (query against uploaded files).

The creator of this project did almost everything perfectly, for sure. They had speed, UI, a converting page, found virality. But they also had timing: OpenAI had banned this open-ended use case till that time, they got lucky that people did not develop Explainpaper competitors, and ChatGPT improved quality while reducing run costs by 10x right when they came into this area, meaning many companies that fore-aware of these changes would have taken it's place, were not trying to enter the market (OpenAI approval was hard, and the costs of models before December 2022 were literally 10x as much for decent quality, making it unprofitable)

cddotdotslash2• 3 years ago

I’ve seen this argument repeatedly. The example is just that - an example. It doesn’t cover anything related to productionizing the application, dealing with user management, rate limits, cost controls, hosting the service, data persistence, documentation, billing, marketing, or any of the other 100 things you need to do to turn a simple script into a product that people are willing to pay for, trust with their data, and embed into their own websites.

So sure, be shameless, but don’t be surprised when your copy/pasted version of the example doesn’t take off.

hgsgm• 3 years ago

OP didn't worry about any of that stuff, which is why they got a first mover launch and quick revenue.

abxytg2• 3 years ago

theres no argument. They productionized a docs example, something I did consider too shameless to try. Wish I had tried. Kudos to this dev he is rolling in the cash.

mahathu3• 3 years ago

"It made it very clear that my goal of making $10k a month from a side project is not a crazy goal to have."

Honestly that entire interview just reveals how much of that poor guys thinking is already infected by the virus called capitalism. Accumulating personal wealth shouldn't be the end goal here. It's short-sighted and perpetuates the very system that created inequality and injustice in the first place.

Instead of focusing on personal gain, why not channel that energy into organizing and fighting for a more equitable and just system? Learn about alternatives to capitalism and push for systemic change that benefits everyone, not just a select few who manage to "take advantage of opportunities."

Capitalism thrives on people thinking they can get rich quick, while most end up struggling and the rich get richer. By pursuing this goal, you're just playing into that system. Focus on the greater good and work towards a future where everyone has a fair shot, not just the ones who keep up with AI or whatever the next tech trend will be for the growth imperative to exploit.

bratbag• 3 years ago

What implied they didn't stop and consider before making this choice?

mahathu3• 3 years ago

Thinking that acquiring n dollarydoos is a worthwhile goal to pursue with your time (and dedication and technical abilities which the student clearly has). I understand my comment was a bit radical and mean and I edited it, but that line just made me want to puke.

kderbyma• 3 years ago

People don't walk a couple blocks and drive for groceries but then sign up to lift weights because they need 'exercise' but won't carry groceries....they are foolish and it's not just with money

atonse• 3 years ago

(genuinely asking) Is there another theoretical system that properly incentivizes people to compete with each other, innovate, and take risks to solve problems? I ask in the "build new solutions" space – we all know there are plenty of rent-seeking businesses that add no value but just take money from everyone. I'm not trying to defend any of that. I'm only asking in the case of "people doing new, innovative things and solving difficult problems" space.

becquerel• 3 years ago

communism, because when everyone's basic needs are guaranteed they have the mental/physical bandwidth to be innovators, and without commodity fetishism, scientific advancements can be made for the sake of responding to human needs, rather than facilitating the creation of products

saulpw• 3 years ago

Let's not conflate "capitalism" with a "market economy". Capitalism is where the investors/shareholders reap most if not all of the rewards from market successes, while the innovators and problem-solvers are paid a fixed salary and given nominal (and often ephemeral) equity.

An alternative system could reward all stakeholders equitably, instead of just investors. The larger set of stakeholders include employees, customers, even members of the community that don't actively participate in the business (but they sure are affected by the business' success--witness traffic problems in Seattle caused largely by the growth of Microsoft and Amazon).

It's a brilliant trick the capitalist class has played on us (and apologies to those of you on the capital side--it's probably not your individual fault), to get us to believe that the only way to get competition and innovation is to take their money and give them all the profits.

kag0• 3 years ago

There are a lot, the most mainstream are going to fall under "socialism". But to give you a specific answer, check out "Alternatives to Capitalism: Proposals for a Democratic Economy". It's a debate between Robin Hahnel and Erik Olin Wright around their personal ideas.

More broadly speaking, any number of systems could compensate people for innovation and problem solving (note I don't think competition should be rewarded in its own right, and risk taking isn't necessary in many systems) by providing them an elevated quality of life. The main difference to our capitalist system today is that rather than trying to accumulate as much personal capital as possible, value created from innovation would only go to the individual as needed to incentivize them. The rest would go to improving the world and lives of the people around them. Of course this requires the individual have some agency in that improvement, which we find lacking in the Soviet Union or other failed communist states.

boeingUH60• 3 years ago

Eh, that's his goal...the only person who has the right to decide that is him. Hypothetically, How would you suggest working on a "more equitable and just system"? Any actions from you that we can imitate?

mahathu3• 3 years ago

Fair enough, you're right, it's his life, but that doesn't mean we shouldn't call out predatory behaviour when we see it, even when the person themselves doesn't see any wrongdoing. One simple change would be to not give 40+ hours of their labour to companies like Meta and google, who operate solely for the profit of their shareholders, just because they have cool massage chairs and free food.

I'm sure for someone at his level of technical ability there are plenty companies that would offer him an internship that also don't actively make the world worse for many people, like facebook does. Or he could work to unionise and give more leverage to the workers at such companies, and then use that power to fight against some of facebooks more predatory business practices. Facebook, the company is nothing without it's developers, but the working class would not be nothing without facebook.

akomtu• 3 years ago

It's a common line of thinking that forcing a greater good onto others will lift them up to your level of moral righteousness. Those on the downward arc of the evolution are learning to deal with the world around them. They can be greedy selfish predators and it's good and appropriate for them. If you stopped predators in the wild from hunting the peaceful animals, you would derail evolution of both kinds. If you somehow ended greed, the vast majority of people would go lethargic as your higher ideals don't resonate with them at all, and you've just taken away their only reason to act. On the other hand, those few who are tired of selfish endeavors are turning to the upward arc of the evolution and to them your ideals of equality might do some good.

polski-g• 3 years ago

Why?

neilv• 3 years ago

As my time in university went on, I started to focus less on optimizing for FAANG (leetcode) and more on building side projects.

That might or might not be a smart move in the current context, but the tragedy of students grinding Leetcode for obnoxious jobs gatekeeping needs to stop.

yamtaddle4• 3 years ago

I'm pretty sure it's to keep FAANG workers from jumping ship too easily, in order to suppress wages. If it were actually for evaluation reasons, FAANG and friends would just get together and come up with some kind of certification with renewal requirements, saving themselves and everyone else an absolute shitload of time and money.

[EDIT] My point is, the practice doesn't continue for "gatekeeping" for its own sake, so if you want it to end, you'd need to address the reasons it's happening. There are obvious ways to solve the stated problems more-cheaply and with less harm to candidates, which leaves unstated problems. The wage-suppression explanation fits pretty well (including with past, proven behavior—this is clearly something they're quite concerned about) and is one of the few things that could justify the expense of the current system versus cheaper alternatives that would solve the stated problems.

tqi2• 3 years ago

FAANG and friends would just get together and come up with some kind of...

I think the DOJ frowns upon that kind of behavior.

janalsncm2• 3 years ago

I interview people and ask LC-style questions. It’s not the only part of my interview nor is it a dealbreaker to not get the optimal solution. Being a savant capable of finding a mathematical breakthrough in 30 minutes is not important. But it gives me a chance to see how nimble you are with code which is important.

danwee• 3 years ago

Just upload your documents or add a link to your website and get a ChatGPT-like chatbot for your data. Then add it as a widget to your website or chat with it through the API.

But, that means they are uploading customer data to OpenAI servers, right? Umm, wonder the legality of that if you don't mention this point in your Legal Terms section (I just quickly searched for OpenAI and couldn't find anything)

amoss• 3 years ago

So we are somewhere between 1995 and pets.com

hef19898• 3 years ago

And pets.com wasn't such a bad idea even, Fressnapf (the german word for the bowl pets eat from) and zooplus are growing and striving eCommerce businesses. Those AI start-up stories read more like your typical get-rich-quick (while loosing weight) scams.

koochi10• 3 years ago

I know this crowd / silicon valley is accustom to these kinds of stories. But we should remember that this is a college kid, who saw an opportunity and took initiative to build a business. The comments here are WAY too critical. We should celebrate these kinds of stories, instead of nitpicking.

Additionally these 'A.I apps are just gold rush' comments are too dismissive about the potential. It may be that there are some low hanging fruit that will get picked first, but I personally think that the vast majority of opportunity requires some level innovation, creative thinking, and grit to utilize.

ravenstine4• 3 years ago

A ton of HN'ers seem woefully butthurt over AI. I'm not saying that the current generation of AI is "smart" or "AGI", but every thread mentioning AI has a disproportionate amount of naysayers who think LLMs are either totally useless or that anything involving AI is "the next bitcoin."

When people knee-jerk react negatively to these kinds of stories, I can only picture envy and an insecurity of not truly knowing where AI will take the software field, despite the amount of certainty displayed by many.

nicoburns2• 3 years ago

I think the hype around AI is more like the dotcom boom. Like the internet (and mostly unlike cryptocurrency), AI is a genuinely useful technology and likely to be transformative over the long term. On the other hand, (and also like the internet) it's currently being peddled as the answer to absolutely everything, much of which is pretty ridiculous.

granshaw• 3 years ago

The crowd here just wants to ensure their high paying mega tech jobs stay safe. Can’t blame them, kinda in the same camp

confoundcofound• 3 years ago

I've been on HN almost since its inception and anecdotally over half of the comments on posts like this are from cranks with nothing productive to offer beyond mean-spirited and tone-deaf criticism. There have been posts of projects by young teens that have elicited unusually harsh feedback. Very few people here are willing to charitably acknowledge the effort and vision of a fellow hacker and to provide supportive guidance. They are the epitome of the "akshually" meme.

kirso2• 3 years ago

I think this is the biggest misconception that VC world has created, the notion that you need to innovate, have an original idea or build something new on top of a new technology trend.

If you look around you still have companies making millions with shitty SAP like ERP software from the 90s.

The problem is that when you live in your bubble, you don't tend to notice the problems other people have.

For a man with a hammer, everything looks like a nail.

TrackerFF• 3 years ago

My first thought was: Good on him, that's solid revenue.

My second thought was: This sounds like another idea that could easily be killed off by Google or similar companies, if they just add a "this is googlebert, your personalized analysis robot - just link your website/upload docs and ask away!" function.

Or this kind of functionality simply becomes part of the batteries included package for ChatGPT etc.

roarcher• 3 years ago

It probably will get killed off, but this kid will have a nice fat wallet by then. Good for him!

echelon• 3 years ago

He could raise and try to grow it across company docs - Slack, Jira, Gmail, other docs. That's something Google won't do well that would be incredibly valuable for lots of companies.

No way is being subsumed the only outcome.

kirso2• 3 years ago

Great, but let him fail on that learn and build something else or try to defend.

These kind of predictions are pointless IMO. Just look at how many products Google killed because there is no mass audience for it. Not even talking about Google+

tasuki• 3 years ago

This sounds like another idea that could easily be killed off by Google or similar companies

Are there any ideas out there that could not be easily overtaken by Google or similar?

paulpauper2• 3 years ago

"I made a $1 million in a year in sales, ask me how"

"by losing $2 million"

Well make it up in volume, famous last words.

james-revisoai3• 3 years ago

Here's a post-mortem and the true history of this tooling approach and being a first mover, or not...

Pre 2021: Useful semantic search widely deployed, used for recommendations for sales. OpenAI has an answers endpoint specifically for this technical use case, full docs, and many companies implement this internally.

Mid 2022: People like me experiment with GPT answering using semantic context on dynamically uploaded content, e.g. https://www.youtube.com/watch?v=7V3VkNj2bag - but cannot get approved for this use case by OpenAI.

Nov 2022: GPT had banned open ended responses and chat like interfaces until now. Explain paper is the first tool that allows you to chat with your PDFs with multiple questions, and to use it on many types of PDFs, released in November IIRC and viral on twitter: https://twitter.com/rauchg/status/1596220185727275008

December-January 2023: 15+ Chat with PDF tools are launched, including pre-hyped launches on ProductHunt from pivoting products January+ onwards: Almost daily launches, sometimes with USPs. I launched AnyQuestions.ai which was at the time the only question tool able to work with videos [1]. Chatbase catches virality on twitter and makes some other sound decisions [2].

Feburary 2023 onwards: No platforms since February have succeeded.

[1] But it took a long time to process with Whisper and the interface was more answer focused than chat-and-response focused; I also made bets on including a larger context and using non-typical embeddings (looking for entailment/contradictions of the sentence as well as semantic similarity) which turned out to not be the right commercial choice.

[2] Allowing embedding on websites, and sharing the Chatbase branding that way was powerful, as well as being able to easily work for new websites as a quick solution. It spread easily through competitor FOMO and was a fast product.

AHOHA• 3 years ago

Regardless of that product how probably this is near the highest MRR or after the tax cut -given he’s in Canada- there’s no money left or there’s no scale up for such business, it’s a good motivation boost for him for sure, however, I’m sure this story brought to you by OpenAI, anyone is reading that story especially a young one, will immediately jump to build anything that uses OpenAI api, more people do, more profits for openAI, it’s like Apple/Dell/whatever laptop company showing you an ad that you should buy a laptop in a promise of quick wealth, except here it’s a continuous profit for OpenAI and not a one time payment. I highly doubt the story will happen or have any article about it if it was based on an open source LLM.

machdiamonds• 3 years ago

The potential use of LLMs as search tools could disrupt the startup ecosystem, especially in niche markets. "Find a service that does this [niche task]" commands could enhance visibility for niche startups. But as LLMs become better at suggesting top products, startups competing with established products might find the path challenging. However, this could also drive a focus on product quality and uniqueness, pushing startups to differentiate more innovatively. LLMs' ability to understand user preferences and suggest products accordingly could open up opportunities for startups providing niche services. I think the startup scene is going to be very interesting going forward.

rob• 3 years ago

A lot of these "hating" comments remind me of the ones I read in ~2006-2007 when kids were making $100,000/month from AdSense and Yahoo! Ads by throwing up simple MySpace layout websites with graphics.

amai• 3 years ago

This is not enough to pay his student loan debt.

A college student reached $64k/mo in 6 months by being an AI first mover

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