[jacky2wong]

I think Stability is in an interesting situation. A few suggestions on its direction and current state: 1. Stability AI's loss of talent at the foundational research layer is worrying. They've lost an incredibly expensive moat and there's enough unsolved problems in the foundation layer (faster models, more energy efficient models, etc.) to ensure Stability provides differentiated offerings. Step 1 should be rectifying the core issues of employment and refocusing this more into the AI lab space. I have no doubt this will require a re-steering of the ship and re-focusing of the "mission". 2. Stability AI's "mission" of building models for every modality everywhere has caused the company to lose focus. Resources are spread thin. With $100M in funding, there should be a pointed focus in certain areas - such as imaging or video. Midjourney has shown there is sufficient value capture already in just 1 modality. E.g. StableLM seems like early revenue rush and a bad bet with poor differentiation. 3. There is sufficient competition on the API layer. Stability's commitment to being open-source will continue to entice researchers and developers but there should be a re-focus on improvements in the applied layer. Deep UX wrappers for image editing and video editing while owning the end to end stack for image generation or video generation would be a great focal point for Stability that separates itself from the competition. People don't pay for images, they pay for images that solves their problems.

[achow]

> Deep UX wrappers for image editing and video editing while owning the end to end stack for image generation or video generation would be a great focal point for Stability that separates itself from the competition. People don't pay for images, they pay for images that solves their problems.

Recently, during an interview [1], when questioned about OpenAI's Sora, Shantanu Narayen (Adobe CEO) gave an interesting perspective on where value is created. His view (paraphrased generously)..

GenAI entails 3 'layers': Data, Foundational Models and the Interface Layer.

Why Sora may not be a big threat is because Adobe operates not only at first two layers (Data and Foundational model) but also at the interface layer. Not only Adobe perhaps knows better than anyone else what is need and workflow of a moviemaker, but I guess most importantly they already have moviemakers as their customers.

So product companies like Adobe (& Microsoft, Google etc.) are in better position to monetize GenAI. Pure-play AI companies like OpenAI are perhaps in B2B business. Actually, they maybe really in api business, they would have great data, would be building great foundational models and giving results of those as APIs; which other companies who are closer to their unique set of customers with their unique needs would be able to monetize and some part of those $$ flows back to pure-play AI companies

[1] At 5 mins mark.. https://www.cnbc.com/video/2024/02/20/adobe-ceo-shantanu-nar...

[jacky2wong]

Thanks for linking. I agree and strongly believe product companies are in the best position to monetize Gen AI. Existing distribution channels + companies being extremely fast to add AI features.

Where start-ups like Stability need to be rising to compete will have to be AI-native e.g. products re-thought of from the ground up like an AI image editor or as foundation-level AI research companies, agents or AI infrastructure companies.

There's no reason Stability can't play in both B2B and API if planned and strategized well and OpenAI can definitely pull it off with their tech and talent. But Stability has a few important differentiators from OpenAI where I believe if they launch an AI-native product in the multimodal space, they stand to differentiate significantly: - People join because they believed in Emad's vision of open source so it is their job to figure out a commercial model for open source. They can retain AI talent by ensuring a commitment to open source here. If they need to ensure their moat is retained and can commercialize, they should delay releasing model weights until a product surrounding the weights has been released first. Still open source and open weights but give them time to figure out a commercial strategy to capitalize their research. However because of this promise, they will not be able to license their technology to other companies. - Stability's strong research DNA (unsure about their engineering) is so badly fumbled by a lack of a cohesive product strategy that it leads to sub-par product releases. In agreement to the 3 'layers' argument, that's exactly Stability's greatest strength and weakness. Their focus on foundational models is incredibly strong and has come at the cost of the interface layer (and ultimately the data layer as it has a flywheel effect).

The company currently screams a need for effective leadership that can add on interface and data layers to their product strategy so they can build a strong moat outside of a strong research team which has shown it can disappear at any moment...

[Hendrikto]

> Not only Adobe perhaps knows better than anyone else what is need and workflow of a moviemaker

I only ever heard creatives complain about Adobe and their UI/UX and how they don’t understand their customers.

Never really used any of their products myself though. Maybe they still are best-in-class. I can’t tell.

[Zetobal]

People don't want to buy a third of an inch drill, they want a third of an inch hole.

[huytersd]

They tried to ponder to the open source CEO’s but as much as open source is an ideal, it’s a pretty sure way to failure for the most part. The only way open source works is if a rich company open sources parts of their non revenue forming items.

[jacky2wong]

Yes - open source is a good go to market strategy. They should not open source if there's no good, strong business strategy around how they plan to commercialize. But there are many ways to commercialize an open source model. For many it's lead generation into a paid offering or a managed offering of the open source model.