How to make $50K/mo with an AI Wrapper?

Topic of the Week

AI Wrappers 101

_{What are AI Wrappers?}

The Internet is flooded with AI tools, most of which are criticized for being just “wrappers”

These wrappers provide an interface that leverages LLM APIs to solve a problem for users.

These wrappers take input from the user and pass these inputs through an LLM such as GPT-4 (The AI Model behind ChatGPT) or through a pipeline of LLMs and present the output to the users in a consumable form.

These seemingly simple tools make much more recurring revenue than a lot of established startups

PhotoAI: $77K MRR
Chatbase: ~$70K MRR
InteriorAI: ~$53K MRR
PDFai: ~$30K MRR
SiteGPT: ~$17K MRR

Critics argue that there is no real MOAT in building such tools as anyone can build these out.

But why do customers then use these tools? Why do some of these make so much revenue?

1. Hype Train - Some of these tools such as AI Avatar Generators saw crazy adoption because of the AI hype train in the last quarter of 2022

2. Better Solutions - The biggest reasons why some of these tools are successful is because they actually solve a problem and customers don’t care about the underlying tech. Customers just see a tool which solves a problem for them and they use it. It is as simple as that.

3. Better Distributed - In some cases, these tools have built out distribution via unconventional channels such as Tiktok and have simply have had the reach.

4. Category Creators - Certain tools such as PDF.ai have unlocked new categories

5. Prompt Engineering - Prompt engineering is not everyone’s cup of time or even if it is - people don’t have the time. Tools that come up with great prompts with consistent outputs also do well.

6. Better UI/UX - Certain tools work just because their UI/UX is better than existing tools.

But some people argue that most of these use cases can be achieved using ChatGPT or Claude

They are right but one has to get out of their echo chamber to realise that not everyone is tech-savvy and not everyone is a pro user. In some cases, these tools do provide a highly superior experience.

Danny Postma’s Headshot Pro is one of the best headshot generators in the market, far better than most venture funded. It is built using an open-source image generation model called Stable diffusion but Danny has been able to.

But are these tools sustainable?

In their current state - No. But I like to think of AI Wrappers as the first step to solving the problem. Some of these tools will eventually build out a superior product, acquire distribution and become great companies - Billion dollar or not? Only time can tell.

Archetypes of AI Wrappers

AI Image Generators - PhotoAI, Headshotpro

AI Interior Design Tools - RoomGPT, VisualizeAI

Chat with PDF Tools - PDF.ai,

Chat with a website/knowledge base - Chatbase, SiteGPT

AI Content Generation Tools - Writesonic, Copy.ai

AI Voice Notes Tools - Audionotes.app, Talknotes.io 

AI Landing Page/Website Designers - Butternut

AI Social Media Growth Tools - Supergrow.ai, TweetHunter.io, Taplio

AI Presentation Tools - Slides.ai, Tome

AI Data Assistants - FormulaBot

Better ChatGPT - BoltAI, TypingMind

We have built out a bunch of AI Wrappers - Audionotes, Podnotes, Summarify, ReminderBot, VisualizeAI (Sold), HeadlinesAI (Sold) and AI Pick Up Lines (Sold)

How to Build an AI Wrapper

Building an AI Wrapper can be broken down into 👇🏻

1. Finding a problem to solve

2. Thinking of an AI Model Workflow to solve that problem

3. Designing a great UI/UX

4. Building it out FAST

5. Distributing it

Nuts and Bolts of an AI Wrapper

1. Tech Stack

   Code: Vercel + NextJS seems to be the most popular code stack to build out these AI Wrappers. Vercel also has a template library that can you check out here.
   No-Code: Bubble is the go to tool for building out AI Wrappers on No-Code.
   

2. AI Models
   Text: GPT-4o, GPT-4, GPT-3.5, Claude, Mistral, Llama 3
   Image: Dall-E, Stable Diffusion
   Speech to Text: Whisper, Deepgram, Assembly AI, Cohere
   Text to Speech: Assembly AI, Deepgram Aura, Google TTS
   Text to Video: Stable Video Diffusion
   Multi-Modal:
   

3. Other Important Tools
   RAG Frameworks - Langchain, llama index
   Vector DB - Pinecone, Qdrant

How to build $50K/mo with an AI Wrapper?

(My apologies for the clickbaity title 🥲)

Building an AI Wrapper isn’t hard but it also isn’t as easy as it seems. With so much competition, you cannot build slowly and you cannot build a substandard product.

Even if you are able to build an AI Wrapper, growing it isn’t easy. Most AI Wrappers die within six months of their launch.

So, should you build one?

Yes you should, but only if

1. You can build a good product very fast

2. You can build distribution for your niche

In short, if you can build good products for a niche for which you can distribute - go ahead and build that AI Wrapper, otherwise - don’t.

Mandatory Plug - If you want to build an AI Wrapper, check out our AI SaaS boilerplate. It takes care of everything from landing pages, and authentication to payments. It also comes with highly customisable production-ready demo apps. We are also running a special $100 off for our early users

Community Learnings for the Week

• Gunnar Shares the meta ads strategy he is using to get subscribers at low CPA here and here

• Matt shares the successful habits of great founders

• Pieter Levelsio and Arvid Kahl share their take on how building in public has evolved over the years

• Peter shares a trick to find viral content ideas for YouTube (can be applied to blogs too)

Story of the Week

AI blogging tool makes $60k+ MRR

Vasco, an SEO expert who previously ran Vetted (Acquired), an SEO expert marketplace, before working on JournalistAI. In April 2023, with the new and powerful models from OpenAI, Vasco and Afonso launched JournalistAI (an AI SEO Writer that Auto-Publishes to your Blog). Quite rapidly, within a few months, they grew to $2000+ MRR. At one point, they even attempted to sell JournalistAI (the reason could be due to the AI hype wave, where people were trying out various tools, but the churn was pretty high as all the tools were relatively early in their development).

The potential users of tools like JournalistAI included independent publishers, digital products, and all products that focused on obtaining organic traffic. Afonso and Vasco continued to add core features relevant for publishers, such as an auto blog, integration with other platforms like WordPress and Webflow, and keyword research, which made the platform more valuable and reduced potential friction for users and churn.

Currently, JournalistAI receives 82,000+ users per month, and according to their latest update, they were achieving $60,000+ MRR, with YouTube being their primary acquisition source, where Vasco creates helpful content around SEO while promoting JournalistAI.

Session of the Week

The Builder OS Sessions are here!

We are super pumped to kick off Sessions by The Builder OS - weekly sessions and masterclasses around everything related to building products on the Internet.

Our first session is on Incorporation in US led by Priya Jain.

Priya Jain is a Chartered Accountant and founder at Ledgerline LLC. She helps founders across the globe keep their business compliant in US by helping them with US Entity incorporation, legal drafting, accounting, payroll and taxes.

The Session is free for all to attend, recording available exclusively to the buyers of The Builder OS.

This session is a must-attend for aspiring and early-stage builders/founders.

Join us on Saturday, 01 June, 11:00 AM IST

Parting Notes

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Don't forget to check out The Builder OS - a repository of all our learnings, playbooks, frameworks, and resources around building, growing, scaling, and selling products on the Internet. Backed by our experience in building 10+ products, selling 4, and generating over $150K in 12 months.

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Stay tuned for the next edition, we have something super interesting for you!