Hi there,

Ever wonder who’s really to blame for climate change? Scientists compiled a world-first list of actual fossil fuel companies that caused us (the world) about $5.4 Trillion in damages. The new paper called Time to Pay the Piper suggests they start by giving us a $209 Billion down payment right now.

In this Open Letter:

• Ultimate startup moat: How to pull an Altman.

• Our first legal cyborg, the PMP collapse & IG gunning for Twitter.

• To incubate or not incubate? 4 Questions to ask yourself.

TRENDING NOW

Get In and Regulate

Last week Sam Altman, CEO of OpenAI (the makers of ChatGPT), spent time in a senate hearing talking about the dangers of AI and to start laying some groundwork for regulating AI.

What? It seems like yesterday he scoffed at Elon Musk for wanting to regulate it, now he is campaigning politicians for it? Something’s up…

Amongst other things, the hearing touched on the following major points:

1. Deep fakes – A type of trained synthetic media that mimics a real person. During the hearing, a Senator played a deep fake that sounded just like himself, yet it wasn’t.

2. Altman expressed that his biggest fear is that the field of AI or technology causes significant harm.

3. AI regulation needed – Ideas about forming a new agency to monitor all apps before they go live and/or to ban certain types of AI were floated.

4. Jobs substitution unsolved – Jobs will be lost, jobs will be gained. But Altman might be working on a plan on this already…more on this in Thursday’s newsletter.

5. Misinformation in upcoming elections – Let’s face it, these politicians want to keep their jobs and this might be some of them’s primary agenda for this hearing. AI certainly has the ability to create misinformation at scale and make them lose their jobs. Would something like community notes keep up? It’s set to be one of the first major human-vs-AI battles in our time 🍿

Now these hearings are normally a bit all over the place, the last time we paid attention to one of them was when Sam Bankman-Fried (SBF) appeared first to talk about crypto regulation and a few months later on why his crypto exchange lost billions in customer funds.

Yes, SBF was pushing for crypto regulation amidst being in the middle of one of the largest crypto scams is beyond ironic.

So what’s Altman doing here?

Is Altman pulling an SBF? We doubt it, but there is a business play that’s as old as regulation itself and that’s the relevance: get in before regulation, then play a part in creating the regulation – which makes it hard for any newcomers and competitors to get going. Now this “part” to play can be as innocent as Altman proposing how to regulate based on deep industry knowledge, but nonetheless, it’s bound to limit newcomers in their ability to move fast.

This is likely why Elon rushed to start his own AI company. He knows what Altman’s doing. And if regulation moves fast and kicks in, it could mean anyone that wants to build an AI company, could require a license first and likely expensive oversight and all kinds of red tape – setting them back months.

The thing is, when regulations kick in, OpenAI and other big companies will comply – but at this stage, they’re already making enough money to afford entire 100+ person departments just to focus on compliance. Startups? Not so much.

Not only in the USA

It’s common in South Africa, too. Take our banking regulation, for example. Any FinTech in SA that wants to start a bank has to comply with a host of regulations and obtain a license. It’s expensive, time-consuming and hard to get approved/finalised.

The result? While it does bring forth protection for consumers (as opposed to rampant scamming witnessed in crypto the last 3 years) some SA banks with subpar products and horrible customer service have managed to not only survive but push out profits year after year.

Proof that regulations are a vital moat for large organisations. And they know it, that’s why the big boys have entire departments just for compliance…

And this happened in other industries as well:

• ICASA regulates Mobile network operators.

• Investments and financial services by FCSA.

• Medicine is overseen by National Regulatory Authority (NRA).

• Even TV is regulated (also ICASA).

The question is, are there any sectors left where you can pull such a play? Off course.

Where to get in first to capitalise on this:

• Crypto exchanges and crypto-related services and products – regulation is coming, now’s the time to move. Also, pay attention to how current players are talking about regulation 😉.
  

• Health tech and bio – Microchips and DNA altering. Yeh, no one thinks SA is ready to deal with this yet, which means there’s space for a Golden Unicorn.
  

• Robotic workforce – If you are brave enough to fight the unions in your quest to actually get this mainstream, might as well help regulate it and get the monopoly.
  

• Cannabis – If you are big enough by the time regulation happens, you can play a role in dictating terms that are beneficial to incumbents, locking yourself in.

Is this Altman’s mission? To regulate to slow others down? Or worse even, pulling an SBF to cover up something? Time will tell, but there are signs that show he is genuinely interested in making sure the world ends up being a better place through his work.

We delve a little deeper into what that might look like in Thursday’s Open Letter…

Until then, tell us what you think about the need for AI regulation. Hit reply and let us know…

IN SHORT

💸 Show me the money. Yet another SA crypto scam collapses. The Planet Mining Pool (PMP) has left victims with ‘substantial’ losses.

📡 “I hear skies of blue…” The world’s first legally recognised cyborg was in Jozi last week. Neil Harbisson hears colours with the help of an antenna built into his skull.

🥛 Milking it. A couple of weeks ago we covered the Post Office opportunity. Seems like the government is trying to expand SAPO’s mandate (including hitting the e-commerce route), to help save the SA Post Office.

💬 Does it even Meta? A leaked slide shows Instagram is taking on Twitter with a new ‘text-based app for conversations’. Oh, Goodie. Yet another place Zuck can mine your data.

🤖 Q Day is coming. After Kim Kardashian failed to actually do it, quantum computing might really break the internet.

­THE BUILDER’S CORNER

Should You Incubate or DIY?

OK, you’ve got your killer idea. And it’s the one; huge potential impact and worth doing properly. Now how do you dot all the i’s and cross all the t’s to build it into the Unicorn you know it’s meant to be – taking into consideration how much support South Africans generally give to new businesses…

Inevitably, the question arises: Should you apply at an incubator to build this right?

4 Questions to ask yourself re prospective Incubator programmes

1. What resources are you actually gaining? Can you get an actual list, like who the mentors are, and what businesses they built? Who is in the network, what industry are they in?
   
   Is there seed capital involved, how much? Are they giving you office space? Are they supplying you with equipment? Does the incubator have access to a massive community/user market that you can tap into and get your first 1’000 clients? Etc.
   
   Getting really rands-and-cents about the actual value of what you’re buying into should facilitate your decision. (And, yes, it’s your business, so you absolutely can “be like that” – in fact, it's probably a good sign.)
   

2. How many successful startups have they created? You know, a list of alumni. You want to see a good few of the last few years’ top startups on there. Guys that clearly came out of the woodwork and are now killing it – if that’s what the Incubator delivers, then that’s where you want to be. And not deliver as in raising money or winning pitch events, building successful businesses.
   

3. Is it a fixed-schedule programme? Because if it’s a fixed schedule of classes to attend, then how on earth can you be sure that day’s topic is what you and your business need right then, at that exact time? These programs tend to waste a lot of time on the right stuff at the wrong time. Find an incubator that has a pragmatic program.
   

4. Is this what your business needs right now? Again, incubators supply network, mentorship, guidance, structure and accountability. And, though every business needs those things, the question is what does your startup need right now? If yes, then it’s time to grow.
   

Psst… we’re doing a podcast with Savant Accelerator founder Nick Allen in a week’s time over at How Would You Build It. If you have any questions for him, hit reply and we’ll make sure to ask him…

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