I've been spending a lot of time recently thinking about what kinds of startups make sense to build right now. Recently I've been thinking a bit about a subset which you might call "AI market makers". A lot of great businesses could be thought of as market makers, meaning, they reduce friction in some market and facilitate exchanges at scale.

I prefer the "market maker" framing to the "two-sided marketplace" framing, specifically because the scaled business requires creating a market where there previously was none by lowering the friction required for some exchange to take place - in other words, increased liquidity for whatever is being brokered. This seems like a natural framing for AI agents, and the resulting business model is easy to quantify (just take some percentage from each exchange).

There are already category-defining companies in most of the above markets, and I'm sure most of those companies are thinking about adding some version of an AI agent to their existing platforms, but I think AI agents will open up a number of new markets that were previously not possible, and these new markets will result in generational companies being built. Put differently, if the market already exists and has some dominant brokerage today, there's probably already a bunch of other people thinking about how to make it more efficient by sprinkling some AI on top, but I think there are markets still waiting to be created.

• Selling used items: I've recently been selling a bunch of stuff on Facebook Marketplace, and wish that I could have an AI agent helping me do it. A lot of money changes hands every year for used goods, and it's currently done pretty inefficiently. There are a few points of friction, mostly on the buyer's side, which AI agents could probably solve:
  • Taking photos of my item
  • Curating a listing
  • Identifying a fair market price
  • Fielding customer requests
  • Brokering the final sale
• Interacting with the government: This is not as clear to me, but the rough shape of the idea is some agent that can interact with government services at scale, then broker access to those services with customers who are willing to pay a bit more for a faster or lower-friction version of that service. It would be cool to train an RL agent to more successfully get permitting approval, for example.
• Job applications: For applicants and employers, there are a number of points of friction which can add significant friction to the process of pairing an employee with a position. In principle, a platform like LinkedIn could be capable of doing this, but it's a meaningfully different experience to create from their core product, so it seems like it is still open to be built, although there are a number of startups which are starting to think about ways to reduce some of these points of friction. I believe companies which have grown large enough will often employ some in-house team to field applications, so it seems like most of the potential wedge for a market maker would be on the employee side. Things that an AI agent might be useful for:
  • Certifying applicants as capable of doing the job (potentially superceding doing a lot of interviews)
  • Negotiating a fair salary
• Dating and social engagement: CupidBot-style apps for automatically getting you dates. I'm kind of skeptical of this genre, personally, but in principle finding friends or dates is a high-friction activity, and having an AI agent learn your preferences and find you social connections automatically might increase liquidity in this market. There are several proof points for this and there are various monetization strategies that are worth exploring, like charging restaurants for traffic.

I'll add some more examples as I think about them. If you have ideas that seem to fit this theme and that don't already define the business model of some large, successful company, please send me a note!