Problem: Earlier this week, Runway released Gen-2: a model that allows anyone to create video from text. Think DALL-E but for images. Some of the results have been astounding, but how could someone build on this platform to create a billion-dollar business? The answer is GIFs (aka funny videos with text on top).
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Solution: This business would focus on adapting an existing text to video model to specialize in text to GIF. The aim of the company would be to be like GIPHY (which allows anyone to search for new GIFs or animated stickers online) but as more than just a database. Instead of just allowing users to search short-form animations that have been uploaded, the technology behind this platform would generate net new GIFs.
It’s the AI age for memes.
What’s even more interesting is that this platform could allow anyone to upload a picture of themselves to potentially adapt existing GIFs. For example, you could put yourself in the Shrek movie or as Leonardo Dicaprio in the “Cheers” gif meme. Better yet, you could adapt the GIF to look like your friends! After that, all the algorithm (or user) would have to do is put text on top.
So could this business really become a unicorn company? Perhaps the best comp is GIPHY. According to The Verge in May 2023,
Shutterstock is buying Giphy for $53 million after Meta’s acquisition of the popular GIF platform was blocked by the UK’s competition regulator, the stock image giant has announced.
That price represents a steep discount compared to what Meta (then Facebook) reportedly agreed to pay for Giphy in 2020. At the time, Axios reported the deal was worth around $400 million, while The Guardian suggests closer to $315 million. Either way, a $53 million price tag is a bargain versus Giphy’s peak valuation of around $600 million in 2016. As part of the deal, Meta will retain access to Giphy’s library across its products.
At one point, GIPHY was valued at almost $600 million. With the added AI features (putting your face in the GIFs) which people may be willing to pay for and which may attract higher usage, there’s a case to be made that this business would in fact be a sustainable unicorn company.
Monetization: Sales of GIFs, advertisements, or affiliates.
Contributed by: Michael Bervell (Billion Dollar Startup Ideas)