From SaaS to IQaaS: The New Landscape of AI-Driven Entrepreneurship

In 2014 I wrote an essay for The Wall Street Journal’s 125th anniversary edition titled “The Future of Entrepreneurship” where I analyzed different technologies and how they might potentially impact our lives as well as entrepreneurship. Nearly 10 years later and in the throws of AI my outlook has expanded. Though I was off on a couple of predictions, 3D printing and drones everywhere, one thing that I was spot on about is that everyone will be an entrepreneur. This could be “lovingly” known as the creator economy but I think it’s more all encompassing than those who monetize social media.

Currently, the entrepreneurial landscape is on the cusp of a deep transformation, namely fueled by the accelerating advancements in artificial intelligence (AI), a tightening economy, and VC’s pulling back on how much they are investing. In fact in early 2023, the aggregate deal value in the venture capital market fell almost 65% from US$188.2 billion in the fourth quarter of 2021 to US$67.4 billion in the first quarter of 2023​​. While the market appears to be bouncing back with shiny new AI investments, the past 24 months for VC-funded startups has been challenging. It’s given Founders, myself included, time to rethink how they want to build (or rebuild) their business and question the status quo. That, coupled with the speed of AI advancements, is creating a shift in the fabric of high-growth entrepreneurship. This shift is not just about the adoption of new technologies but a fundamental change in the ethos of entrepreneurship itself. 

In the next three to five years, we are likely to witness a dramatic shift away from traditional venture capital (VC) models, ushering in a new era where founders retain more equity and, consequently, more control and freedom in their ventures. This shift is a fundamental redefinition of what it means to be successful in business. Situations like what occurred just this past Friday with the ousting of OpenAI’s co-founder Sam Altman is a signal we should pay attention to. Though no VC’s were on his board (a rarity but a signal in and of itself) it’s still a very real truth that outside capital and board control doesn’t equal what most entrepreneurs are looking for: Freedom.

In this new era of entrepreneurship Founders are increasingly tailoring their approach to align with their personal values and vision, leading to a more personalized entrepreneurial journey with AI helping to bring this to fruition. 

Coatue, a hedge fund with a VC arm with $47B assets under management (AUM), privately released a 115-page report recently titled “The AI Revolution.” The report is loaded with data on where AI is going and includes some insight on entreprenuership as well. You can download the full report at the end of this essay but I’ve pulled out some of the more intriguing insights based on our discussion today. Let’s explore…

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