1Mby1M Virtual Accelerator AI Investor Forum: Yanev Suissa, SineWave Ventures (Part 3)

Sramana Mitra: Yeah. So, Yev, I want to make a point, and I want your thoughts on it.

We hear a lot from people saying, “This is just a wrapper on top of ChatGPT.” But there is a lot of domain knowledge in specific verticals that you can solve very well with a wrapper on top of ChatGPT, because the domain knowledge is where the real work is happening.

Yes, you are using fairly easily available, non-differentiated infrastructure underneath. But it’s that layer—where you have great founder–entrepreneur fit and strong domain knowledge—where you can solve real problems and charge substantial amounts, like a quarter million or half a million dollars per enterprise customer. Or, as you said, you like governments. We have a company right now that is selling to the government, and they are in the process of getting quarter-million-dollar beta customer deals.

So why are we dismissing this model so much?

Yanev Suissa: I wouldn’t dismiss that. Technology that understands an industry or a vertical and is able to integrate proprietary data is particularly powerful. I think the industry is headed in a certain direction.

The way I think about it is: you have AWS and Azure as the base behind technology. On the AI side, Nvidia plays that role. They’re essentially commoditized. They built marketplaces on top that provide real value on their backend—companies like Databricks and Snowflake.

On top of that, you now have AI solutions. In the AI world, the analogy is Nvidia to OpenAI to the solutions that startups are providing. OpenAI and similar companies will become the commoditized backend, which is still a massive business, but startups should focus on exactly what you mentioned: providing real solutions for real use cases in particular verticals, using that technology where it makes sense.

We have a company in our portfolio called Flurry. The important thing about these “wrappers,” so to speak, is that you need to be able not only to use LLMs and broader information, but also to safely connect that information with your own data. That immediately drives value for a business because you’re making decisions based on accurate internal data. That’s where security and integration become so important.

If you’re just using AI to answer a company’s questions, that’s one step—if that’s what we mean by “wrapper.” But the next step is taking those insights and placing them in the context of an organization’s actual information.

Sramana Mitra: Enterprise workflow—there is really powerful enterprise value there.

Yanev Suissa: I agree. Very powerful. Yes, I agree.

Sramana Mitra: And as we’ve seen in the era of platform-as-a-service, when Salesforce came out with Force.com, companies like Veeva were built for very little money. Veeva raised around $4 million and became one of the most efficiently built companies on top of Force.com, eventually becoming a multibillion-dollar public company.

There is tremendous value in building on someone else’s stack, especially if you want to build a capital-efficient or bootstrapped company.

Yanev Suissa: That’s absolutely correct. You want to be a platform on top of platforms. Use what’s out there effectively and add value to it. Add the pieces that really bring value to a business on top of what already exists. And for a VC, that also makes for a great exit. Those are the kinds of things we look for. Yes, that’s exactly right.

One Million by One Million (1Mby1M) is the first global virtual accelerator in the world, founded in 2010 by Silicon Valley serial Entrepreneur Sramana Mitra. It offers a fully online entrepreneurship incubation, acceleration and education resource for solo entrepreneurs and bootstrapped founders working on tech and tech-enabled services ventures. 1Mby1M does not charge equity, offers an AI Mentor available 24/7 in 57 languages, and offers a compelling alternative to Y Combinator and other equity accelerators.

This segment is part 3 in the series : 1Mby1M Virtual Accelerator AI Investor Forum: Yanev Suissa, SineWave Ventures
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