Practical Founders Podcast

#91: How AI Is (and Isn't) Changing the Game for Practical SaaS Founders – David Evans

03 May 2024

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David Evans, the managing partner of Sentiero Ventures, a seed fund focused on AI-focused software startups. David discusses the role of AI in software development and the opportunities it presents for practical SaaS startups. He shares his journey with AI and predictive modeling in his previous companies and the key factors he looks for when investing in AI-powered companies. In this expert podcast interview, David discusses: The new questions about revenue models for AI-powered companies The challenge of cost in AI and the potential for innovation The importance of clean and relevant data to train models and machine learning Balancing AI in the go-to-market strategy The impact of AI on various industries Quote from David Evans, Managing Partner of Sentiero Ventures "The biggest challenges and opportunities we see right now are in the revenue model. The traditional per-user, per-month model in SaaS is becoming increasingly difficult to justify in AI-powered companies because every time I interact with ChatGPT, there is an associated nontrivial cost. When I ask it a question with AI, there is a compute resource of OpenAI or whatever that is being directly accessed. "This also leads to some opportunities to scale revenue more quickly because you can now charge based on utilization. With the right sort of unit economics, you have the opportunity to scale your revenue more directly with usage and value. Companies will scale their utilization very quickly when they see results. It gets really interesting fast. "It's obvious when you start viewing it through the lens of whether I need to run one more campaign. If they are making money, then yes, I'll pay for the next campaign and the next one. We're seeing a better scale with utilization-based billing. You have to figure out the unit economics to ensure you're doing it profitably." Links David Evans on LinkedIn Sentiero Ventures on LinkedIn Sentiero Ventures website The Practical Founders Podcast Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app. Get weekly Practical Founders newsletter and podcast updates at practicalfounders.com.

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#176: The Five Questions That Will Decide Your SaaS Progress Next Year - Greg Head

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Practical Founders Podcast

Practical Founders Podcast

#91: How AI Is (and Isn't) Changing the Game for Practical SaaS Founders – David Evans

This episode hasn't been transcribed yet

Other episodes from Practical Founders Podcast

#176: The Five Questions That Will Decide Your SaaS Progress Next Year - Greg Head

#175: The Hidden Founder Psychology Patterns Behind Stuck SaaS Companies - Dave Hersh

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