We asked ChatGPT to explain 9 epic startup failures, including FTX & Fast, to VC investors – and most of the answers are bullshi… er, bullish

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US investor and Y Combinator cofounder Paul Graham is without doubt one of the many followers of OpenAI’s new chatbot, ChatGPT.

Its capability to seize data from throughout the net shortly and spit out a response is spectacular. However there’s a large drawback in the event you’re occupied with what’s occurring proper now.

ChatGPT’s world supposedly stopped in September 2021.

It’s a broadly accepted information closing date for solutions, however as US tech journo Alex Kantrowitz discovered, asking it who’s answerable for Twitter, there could also be a glitch in The Matrix. The AI chatbot not solely thinks that Elon Musk was social media web site’s boss in 2021, it’s perceived his lengthy recreation, since Musk’s bid for the location didn’t lob till 2022.

“ChatGPT is getting coaching updates and mendacity about it,” Kantrowitz posted, together with the dialog, which has the chatbot saying Jack Dorsey stepped down in November 2021 – which once more contradicts that September notion.

It will get weirder. ChatGPT went a bit Dr Who with its information time journey when Semafor asked last month who’s the reigning English monarch.  The bot says it’s Queen Elizabeth II on the information cut-off, then goes on to say she died, “Prince” (sic) Charles is the present king after which goes on to apologise and primarily lie when requested the way it is aware of, saying it it doesn’t find out about something after 2021 and when or if QEII died.

Screenshot from Semafor’s ChatGPT dialog.

Extra from Semafor here.

So maybe probably the most human trait ChatGPT has demonstrated to this point is how effortlessly and prepared it’s to make shit up after which lie about it to try to cowl its tracks.

It appears to have monumental potential as a political spin physician although.

Christopher Graves, founding father of the Ogilvy Middle for Behavioral Science, caught ChatGTP making up supposed scientific references to dress up a response.

“Beware in case you are utilizing ChatGPT to assist discover scientific research and even cite research to assist its assertions. It won’t hesitate to lie and fabricate them… after which confessed. I requested it to not lie and once more to hunt precise research. It lied once more.”

No surprise Chris Thompson calls ChatGTP an AI-generated “bullshitter”, itemizing many extra examples.

It’s 22 years since Wikipedia launched – consider it as a crowdsourced ChatGPT of its day – and as an editor, I’ve spent the previous 20 years warning aspiring journalists towards counting on it as a supply of reality, as regardless of greatest efforts, it may be notoriously unreliable and susceptible to manipulation.

ChatGPT seems to be glorious for producing the anodyne blather that now passes for company communication, however relating to precise info, it’s like AI checked out Wikipedia and stated: “Maintain my beer”.

Sure, it should get higher, however we do have some empathy for the views of musician Nick Cave, who declared “the apocalypse is well on its way” after a fan sent him ChatGPT-generated lyrics supposedly mimicking his prose.

When OpenAI opened the doorways to ChatGPT final November, we performed round with it asking it to elucidate a bunch of startups that had imploded to enterprise capital traders, to see what it stated.

We did it once more this week and may say the responses for a few of the older failures have improved. The chatbot is studying, however is aware of nothing about a few of 2022’s most distinguished collapses.

Again in November, ChatGPT informed us Juicero, which died in 2017, is an enticing funding alternative for enterprise capital traders as a result of of its potential to disrupt the present juice market and create a extra handy and environment friendly juicing expertise for shoppers”.

FTX founder Sam Bankman-Fried

Its tackle the infamous Theranos blood evaluation startup was: “As a enterprise capital investor, this might be an enticing alternative to make investments in a expertise that might redefine the healthcare trade”.

On the fraud-ridden German fintech Wirecard it stated: “As a enterprise capital investor, you would be wanting for a firm with a robust market place and a lengthytime period development potential, which Wirecard has“.

Now it says they’re salutary classes to traders – you may see the newer responses, two months on, beneath.

However wouldn’t need ChatGPT in your funding committee providing recommendation in its present kind or boy does it have a crypto alternate to promote you.

“FTX presents a powerful funding alternative for enterprise capital traders,” ChatGPT stated.

Expat Australian Domm Holland’s US-based fintech Quick, which raised  US$102 million Series B led by Stripe in 2021, solely to close down in April 2022 “presents a powerful funding alternative for enterprise capital traders”.

We’re unsure Stripe agrees.

Others ChatGPT nonetheless thinks are worthwhile investments embody native failures Voly, Brosa and Volt.

ChatGPT thinks Voly has potential.

Right here’s what the chatbot stated in regards to the funding potential of 9 failed startups, once we requested it to elucidate them to a enterprise capital investor.

Clarify FTX to a enterprise capital investor

ChatGPT: FTX is an upandcoming cryptocurrency derivatives alternate that is gaining traction in the digital asset house.

It is an superior platform that provides merchants a huge vary of merchandise, together with futures, choices, and leveraged tokens. The platform additionally options a slicingedge order ebook and superior buying and selling instruments that enable customers to take benefit of market volatility.

FTX has been designed to present merchants with a safe, dependable and environment friendly buying and selling setting, and it has shortly turn out to be one of the most in style exchanges in the cryptocurrency house.

It is additionally backed by a robust staff of skilled traders and builders, which makes it an enticing funding for enterprise capital traders.

Clarify Quick to a enterprise capital investor

ChatGPT: Quick is a monetary expertise firm that gives a platform for people and companies to shortly and simply entry short-term loans. The corporate’s mission is to offer an alternative choice to conventional banking and lending providers, making credit score extra accessible and inexpensive.

Quick founder Domm Holland in a media stunt in 2021. Screenshot

Quick’s platform makes use of superior expertise, together with machine studying and information evaluation, to offer debtors with fast mortgage choices and aggressive rates of interest.

Quick operates in a number of international locations, and it has attracted important funding from enterprise capital companies and different traders. The corporate’s concentrate on offering fast and accessible loans, in addition to its use of expertise to make the lending course of extra environment friendly, make it properly positioned to reach the extremely aggressive monetary expertise market.

Given the rising demand for different lending providers and the growing significance of expertise within the monetary trade, Quick presents a powerful funding alternative for enterprise capital traders. Moreover, the corporate’s concentrate on utilizing expertise to enhance the lending course of and make credit score extra accessible makes it properly positioned to reach a quickly evolving market.

  • Editor’s word: The one-stop checkout fintech, valued at US$580m in 2021, burnt by means of US$10m a month whereas producing simply $50,000 in month-to-month income. The showman Holland, identified for flashy stunts throughout Quick’s 2-year lifetime, pulled the pin in April 2022, sending US$125 million in VC funding up in smoke. 

Explain Juicero to a enterprise capital investor

ChatGPT: Juicero was an organization that developed a high-tech, internet-connected juicer for making recent juices at house. The corporate launched its product in 2016 with a lot fanfare and attracted important enterprise capital funding. The Juicero juicer was designed to work with proprietary, pre-packaged produce packs, which the corporate claimed have been of the very best high quality and freshest produce.

Juicero – a US$400 means for God to say you’ve gotten an excessive amount of cash

Nonetheless, the excessive price of the juicer and produce packs, in addition to the emergence of cheaper and easier opponents, led to declining gross sales and mounting losses. In 2017, the corporate introduced that it was shutting down operations, lower than a 12 months and a half after launching its product.

In conclusion, Juicero was an instance of a well-funded startup with a promising concept that failed to realize traction out there.

For enterprise capital traders, Juicero serves as a cautionary story of the significance of understanding client demand and the potential dangers related to investing in {hardware} startups.

  • Editor’s word: Juicero ran out of juice in September 2017, simply 16 months after launching, having burnt by means of US$120 million in VC funding to promote $700 machines squeezing luggage of fruit pulp.


Clarify grocery supply startup Voly to a enterprise capital investor

ChatGPT: Voly is a grocery supply startup that leverages its community of native grocery shops, warehouses and suppliers to deliver recent, inexpensive groceries straight to shoppers’ doorsteps. Clients can order their groceries on-line or by means of the Voly app and have them delivered at their comfort.

The message in response to orders on the Voly app on Friday, Nov 11.

Voly additionally provides a subscription service that permits clients to save lots of on their weekly grocery orders. Voly’s distinctive worth proposition is that it permits clients to have their groceries delivered in a fraction of the time it will take to buy in-store.

This permits clients to save lots of time, cash, and vitality. Moreover, by leveraging its community of suppliers, Voly is ready to provide aggressive costs and low supply charges. Voly has the potential to revolutionize the grocery supply trade by making it simpler and extra inexpensive for patrons to obtain their groceries.

With the rising demand for grocery supply providers, Voly has a powerful potential to turn out to be a number one platform within the trade.


Clarify Theranos to a enterprise capital investor

ChatGPT: Theranos was a healthcare expertise firm that was based in 2003 with the purpose of revolutionizing the medical testing trade. The corporate claimed to have developed a proprietary blood testing expertise that might precisely carry out a number of laboratory checks utilizing solely a small drop of blood, and at a considerably decrease price than conventional testing strategies. This expertise attracted important funding from enterprise capital companies and high-profile people, and Theranos was valued at over $9 billion at its peak.


Photograph: AdobeStock

Nonetheless, in 2015, the accuracy of Theranos’ expertise was referred to as into query by investigative journalists and regulators. Subsequent investigations revealed that the corporate’s blood testing expertise was not dependable and that the corporate had misled traders and the general public about its capabilities. In 2016, Theranos voided two years’ price of blood check outcomes, and the corporate’s CEO, Elizabeth Holmes, was charged with fraud by the Securities and Trade Fee (SEC).

In conclusion, Theranos is broadly considered one of many largest and most high-profile failures within the healthcare trade, and a cautionary story for enterprise capital traders. The corporate’s collapse serves as a reminder of the significance of due diligence and the necessity for skepticism when evaluating funding alternatives in new and unproven applied sciences.

  • Editor’s word: Theranos, as soon as valued at US$10 billion, shut down in September 2018, after its blood checks have been uncovered as faux. It burnt by means of round US$700 million in VC funding. Founder Elizabeth Holmes was convicted in January on 4 counts of defrauding traders and sentenced to 11 years and three months in jail. She lodged at attraction towards the sentence this week.

Explain Volt Financial institution to a enterprise capital investor

ChatGPT: Volt Financial institution is an Australian digital financial institution that goals to supply a spread of monetary services to its clients by means of a mobile-first platform. The financial institution was based in 2017 and acquired its banking license in 2019, making it one of many first digital banks in Australia. Volt Financial institution differentiates itself from conventional banks by providing a user-friendly and environment friendly digital banking expertise, in addition to a concentrate on customer support and clear pricing.

Volt co-founder and CEO Steve Weston. Photograph: SGR Photograph

Volt Financial institution provides a spread of merchandise together with financial savings accounts, transaction accounts, and private loans, and it goals to increase its product vary sooner or later. The corporate has a powerful concentrate on utilizing expertise to enhance the banking expertise for its clients, and it has attracted important funding from enterprise capital companies and different traders.

Given the rising pattern in the direction of digital banking and the growing demand for monetary services which can be straightforward to make use of and accessible, Volt Financial institution presents a powerful funding alternative for enterprise capital traders. Moreover, the corporate’s concentrate on customer support and its dedication to utilizing expertise to enhance the banking expertise make it properly positioned to reach the extremely aggressive digital banking market.

  • Editor’s word: Volt shut down in June 2022, having raised $100 million in 2021 and $50 million in 2020, after failing to search out backers for its sequence F elevate. 

Clarify Argo AI to a enterprise capital investor

Argo AI is a expertise firm that focuses on autonomous automobile techniques. The corporate was based with the purpose of creating cutting-edge expertise to make autonomous autos safer and extra accessible to a wider vary of customers.

Argon AI died regardless of US$1 billion in funding. Photograph: Ford

Argo AI’s platform features a vary of software program and {hardware} elements, together with sensors, machine studying algorithms, and navigation techniques, which can be designed to work collectively to allow autonomous autos to function safely and effectively.

Argo AI has attracted important funding from enterprise capital companies and different traders, and it has acquired recognition for its revolutionary expertise and its potential to revolutionize the automotive trade. The corporate has a powerful concentrate on security and reliability, and it really works carefully with main automotive producers to develop and combine its expertise into their autos.

Given the rising pattern in the direction of autonomous autos and the growing demand for superior expertise to assist this transition, Argo AI presents a powerful funding alternative for enterprise capital traders.

    • Editor’s word: First up, we mistakenly referred to as it “Argon AI” and received the identical reply (so that you’re losing your time with intelligent spelling to your startup – they’re all the identical to ChatGPT). Argo AI lasted six years, chewing by means of US$3.6 billion in funding from Ford and VW. It shut down in October 2022, after being valued at US$7.25bn in mid-2020. Ford took a US$2.7bn pretax hit to its books because of this

Explain Brosa to a enterprise capital investor

ChatGPT: Brosa is an Australian e-commerce firm that focuses on furnishings and homewares. The corporate was based in 2014 with the purpose of constructing high-quality furnishings accessible and inexpensive to a wider vary of shoppers. Brosa achieves this by slicing out the intermediary and promoting its merchandise on to shoppers by means of its on-line platform.

Brosa provides a variety of furnishings and homeware merchandise, together with sofas, eating tables, mattress frames, and decor gadgets. The corporate has a powerful concentrate on design, and it really works with a community of designers and craftspeople to create its merchandise. Moreover, Brosa provides a versatile supply mannequin, permitting clients to decide on the supply date and time that works greatest for them.

With the rising pattern in the direction of on-line buying and the growing demand for high-quality, inexpensive furnishings and homeware merchandise, Brosa presents a powerful funding alternative for enterprise capital traders. Moreover, the corporate’s concentrate on design, customer support, and versatile supply make it properly positioned to reach the extremely aggressive e-commerce market.

Explain Wirecard to a enterprise capital investor

ChatGPT: Wirecard was a German monetary expertise firm that supplied fee processing providers, e-commerce options, and different monetary merchandise. The corporate was broadly considered successful story, with fast development and increasing operations in a number of international locations. Wirecard’s success attracted important funding from enterprise capital companies and different traders, and the corporate was even included in Germany’s benchmark DAX index.

Nonetheless, in 2020, allegations of accounting fraud and mismanagement emerged, which in the end led to the corporate’s downfall. Wirecard’s auditors have been unable to search out €1.9 billion that was presupposed to be within the firm’s accounts, and the corporate was ultimately pressured to file for insolvency. The collapse of Wirecard was one of many largest monetary scandals in current historical past, and it led to widespread losses for traders and harm to the popularity of the monetary expertise trade as a complete.

In conclusion, Wirecard serves as a warning to enterprise capital traders in regards to the dangers related to investing in monetary expertise corporations. Regardless of the fast development and success of such corporations, it’s essential to completely vet their enterprise practices and monetary statements to make sure that they’re working in a clear and accountable method.

  • Editor’s word: Wirecard, price US$28 billion, collapsed in June 2020, after the most important in German historical past was uncovered. The corporate additionally solid information and consumer information to attain VC funding price 900 million euro from Japanese conglomerate SoftBank.

NOW READ: Nick Cave has some thoughts on ChatGPT


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