How I Built a Venture Capitalist A.I. Bot and What I’ve Learned From It.
I’ve been reading Fred Wilson’s blog for almost a decade and his writing inspired my move into venture capital some years back. He’s a seasoned early-stage investor and a co-founder of Union Square Ventures, one of the best venture capital firms of all time. (They invested in the likes of Stripe, Twitter, and Coinbase).
I’m still reading through each and every one of Fred’s blog posts because there’s a ton of early-stage investing knowledge in it, and his writing is such a delight to read. But as a fan of his blog I also wanted to create an interactive way of traversing his knowledge base.
Enter GPT, Langchain, and Chromadb. These tools helped me quickly build a prototype chatbot that I could ask questions about early-stage investing. Below are some gif examples of the answers I can get from the bot. I also tweeted about it here. How did I build it?
How did I build it?
There were broadly three steps. First I used an open source Python library called BeautifulSoup to extract all the text from https://avc.com/. Second, I created an AI-native database of that text using Chroma. This part is really cool because Chroma stores the text in a highly multi-dimensional space where related concepts can be found easily. Finally, I used Langchain to connect to OpenAI’s GPT model for chat and language capabilities. (The user interface is powered by Gradio.)
All this sounds super technical for non-coders, but I’m not a software engineer by the way. I’ve completed online coding classes before and I know a few basic programming principles, but it’s not my area of expertise. I built this VC AI by using open source tools and asking ChatGPT for a lot of help!
Implications for Entrepreneurs
If I can build something like this over a few evenings, and the technology that enables people to do it is getting simpler and more accessible, we’re going to see a massive rise in the number of people who can create software tools and apps. And one of the things I’m excited about here is that entrepreneurs who previously weren’t technical enough to start a tech company can do so without the hurdle of having to find a technical co-founder. That partner could be an AI.
Implications for Investors
I’ve built a prototype investor chatbot for personal use and learning but I don’t believe it can displace any seasoned investors, yet. Coincidentally, just as I was finishing the prototype, Fred Wilson wrote about this same topic yesterday and he makes a number of points that I agree with.
The thing is, there are facts, there’s knowledge, and then there’s wisdom. Everyone has cheap access to facts. Wikipedia does a wonderful job of that. Many people also accumulate knowledge with time and some expense – i.e. the know-how and nuance of applying different facts and ideas in a specialist area. AI is now getting really good at this.
The final element is wisdom, and that’s hard-won. It’s very human. It involves living through an experience and internalising the whys and counterfactuals of what happened and what could have happened. I can’t just read a blog post from Fred Wilson or ask an AI about how to deal with a situation and all of a sudden become a wise person. That takes significant time, reflection, and tangible practical experience.
AI might become wise some day, but from what I’ve built and learnt about large language models so far, it will be exceptionally difficult to replicate that. I remain open to the idea that this could change quickly if some new innovation in AI emerges. For now though, I don’t think investor jobs are going to be displaced by bots. Investing will, however, be augmented by AI.