Is Their Company Name a Core Value Or Marketing Spin
You learn a lot when buying a first home. I learned that there are principal agent issues with your realtor exacerbated by the transactional incentive model. I learned that disclosure statements can be worded in a very specific manner that doesn’t truly describe what happens to your basement during rainy season. And I learned that the origin of a neighborhood’s name will reveal whether or not it’s descriptively accurate. What do I mean by this last point? Well, right next to where I live is called ‘Sunnyside.’ If it was given this label by the land’s indigenous peoples then it almost certainly is sunny. But if it was coined ‘Sunnyside’ by the real estate industry you can assume it’s foggy AF. [spoiler, in my case it’s foggy]
Hearing a company’s brand name always brings me back to this point. Was it coined because the promise provides a true north to its identity? A goal for every employee to live up to every day when they think themselves as representing the organization? Or was it a feint? Something that reassures each time it’s spoken but with no actual deep roots. A plastic flower instead of a living blossom.
I think of this every time “OpenAI” is mentioned. And these days OpenAI is mentioned a lot! The technology betas released by this group have been some of the most compelling, exciting, and energizing experiences our industry has shared in years. And I applaud them for moving quickly towards ‘general availability’ (although one can assume that the usage data becomes its own moat). Their work has entered my Top 10 of personal “isn’t software amazing” moments. But I then pause and wonder about the name.
What does ‘Open’ aspire to in this case? In their 2015 introductory blog post, the group said
We’re hoping to grow OpenAI into such an institution. As a non-profit, our aim is to build value for everyone rather than shareholders. Researchers will be strongly encouraged to publish their work, whether as papers, blog posts, or code, and our patents (if any) will be shared with the world. We’ll freely collaborate with others across many institutions and expect to work with companies to research and deploy new technologies.
My assumption is that Open was juxtaposed against a potential future ‘owned’ (and siloed) by Google, Apple, etc and the promise was you needed a fundamentally different structure to support this noble goal. But three years later, the organization changed into a for-profit, albeit one with capped upside for investors (100x cap. gulp.). The rationale was that the costs of development — talent and especially processing capability — was going to be substantial and OpenAI would need millions and millions of dollars to achieve their technology goals.
Institutions like Sequoia and Khosla, among other VCs, piled in. This was my first moment of HMMMMM. Now I certainly believe it’s possible to do well and do good, but I’ve rarely seen a multibillion dollar VC who was willing to sacrifice ‘well’ for good. Especially when hundreds of millions of dollars (billions?!?) might be up for grabs. Voting structures aside (which I know is close kept to the non-profit Board), how do you prevent a handful of venture capitalists from influencing and benefitting from this organization. The company you keep does impact behaviors, no? Can any transition to a venture-financed for profit be truly Open? Is this a new model or just a new FAANG?
Then you have potential king-making decisions about their technology and their capital. OpenAI led a $23m+ round in an AI powered note taking app via a startup fund also powered by Microsoft (and other?) dollars. Of course they want to see startups experimenting with their technology, pushing it forward the use cases, getting input from the developer community. But is throwing money (and frankly the importance of their brand, which right now is red hot) into startups a lead investor really Open? How Open does that feel to other note taking apps? (I’m not an investor in anything related to OpenAI or Mem, nor have I attempted to invest in either, although I did meet Mem very early on and thought they were nice people).
I’ve only met Sam Altman once or twice but he is clearly intensely curious and interested in future forms of equitable distribution (UBI for example). Maybe that’s why I’ve got really high expectations for this project and am picking on them a bit here. OpenAI seems to really be kicking ass on the AI part of the name. They have a chance to be as special and unique with the Open half — setting new standards as well for how an organization like theirs can create amazing technology AND broadly inclusive outcomes.