The Observer's Notebook: A Drippy Sponge

Volume II, Entry 4 | December 12, 2024

December 12, 2024 • Reading Time: 7 minutes

1. AI Text to Video is Here.

This week OpenAI released Sora, its text-to-video feature that can create clips up to 20 seconds long, to the public after launching early access at the beginning of the year. Some of my favorite recent examples (you’ll have to log in/sign up for these links to work):

This has MASSIVE implications for the creator economy over the next several years. This is the worst this tool will ever be - it’ll only get better and better, and soon visual creators will have the ability to create anything at their fingertips. 

This has me thinking on 2 big questions:

  1. Demand for Creative Software: How will tools like Sora impact the demand for creative software like Adobe Premiere, especially for startups developing video production solutions?→ My Take: For 99% of the creative software market, it’s integrate or die. The lead and data advantage OpenAI + others have built make it nearly impossible to imagine competitors “building their own.” Similar to what Dan and I discussed in this week’s episode, verticalized application of these fundamental toolsets is the next evolution of opportunity.

  2. The Role of the Human: Could AI-generated video content fully replace traditional editing tools, or will there remain a need for human-driven customization and enhancement?→ My Take: Prompt engineering becomes the new video editing. No code, fancy toolsets, or training required. Just a chat bar and a ridiculously low barrier to entry for “decent” video content. Lots of people are going to be upset about this, but like Igor Belagorudsky mentioned in Episode 14, the reality is that “there’s gonna be a lot more garbage. It’s gonna be shiny garbage, but it’ll be garbage.”

2. “The Average Mind is Already a Dripping Sponge.”

“The average mind is already a dripping sponge that can only soak up more information at the expense of what’s already there.”

That’s a quote from the marketing classic Positioning by Al Ries and Jack Trout (first published in 2001, first read by yours truly in December 2024).

10 sentences later, they write this amazing line:

“Technically, we are capable of increasing the volume of communication at least tenfold. We’re experimenting with direct television broadcasting from satellites. Every home would have 100 channels or so to choose from.”

Ha! If they only knew.

Here’s another quote that summarizes the entire book, from one drippy sponge to another:

“In communication, more is less.”

Got it.

3. Maybe I’ve Overcorrected?

“Andrew, I want to hear more from you. Not just your guest.”

Unexpected feedback I got this week. For like a year I wrote a thought piece every single week, but recently launched the podcast and pivoted my content strategy to be more guest-focused.

Here are my 3 reactions:

  1. Honored. Pretty cool - at least one person wants to hear what I have to say.

  2. Challenged. My natural “posture” is that of a listener. A personal and company value is “2 ears 1 mouth”. That ethos is reflected in the name of this publication. I’m less good at sharing, and quite frankly it’s intimidating to think about.

  3. Curious. Is this person just weird or do others want this? → How you can help: are you an active listener of the podcast? Hit this quick survey and let me know if you’d like to hear from me “more,” “less,” or “about the same” in future episodes. Or just reply via email if the click doesn’t work for you.

Bookmarks

  1. Probably one of the best book titles I’ve ever seen: “How to Make a Few Billion Dollars”💰| Brad Jacobs | This new book was first recommended to me over drinks with Curtis Feeny (Episode 17) a couple months ago, and its themes occupied a ton of mind space for me this week. Check out this interview with Patrick O’Shaughnessy, and this breakdown of the book from David Senra.

  2. Was 24 any better than 23 for angel exits? Nope. Here’s some yucky data.📉| John Harbison, @Angel Capital Association (link)

  3. “The only way to actually be happy as a professional venture capital investor is if you love the game itself.”❤️| Yoni Rechtman @ (link)

Thanks for reading - have a great week.

-Andrew

P.S. Your feedback is important to me. Also, it tells the algorithms to pay more attention, which helps me out a lot. If you enjoyed this post, hit the “like” button or leave a comment with your thoughts.

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About Me

I cultivate flourishing.

I'm also the CEO of PitchFact, where our mission is to cultivate flourishing specifically through efficient and collaborative early-stage diligence. I'm a proud husband, grateful father, and honest friend. My love languages include brisket, bourbon, and espresso.