While consumer AI video grabs headlines, Synthesia found a massive market by focusing on enterprise knowledge. Their talking-head avatars replace slide decks and text documents for corporate training, where utility trumps novelty and the competition is text, not high-production video.
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Instead of fearing competitors who copy their product, Synthesia's founder sees them as a net positive. The increased competition generates more market iterations and signals, helping them discover the most valuable use cases for the new technology faster than they could alone, while also sharpening their focus.
The 'uncanny valley' is where near-realistic digital humans feel unsettling. The founder believes once AI video avatars become indistinguishable from reality, they will break through this barrier. This shift will transform them from utilitarian tools into engaging content, expanding the total addressable market by orders of magnitude.
Synthesia initially targeted Hollywood with AI dubbing—a "vitamin" for experts. They found a much larger, "house-on-fire" problem by building a platform for the billions of people who couldn't create video at all, democratizing the medium instead of just improving it for existing professionals.
Higgsfield initially saw high adoption for viral, consumer-facing AI features but pivoted. They realized foundation model players like OpenAI will dominate and subsidize these markets. The defensible startup strategy is to ignore consumer virality and solve specific, monetizable B2B workflow problems instead.
While today's focus is on text-based LLMs, the true, defensible AI battleground will be in complex modalities like video. Generating video requires multiple interacting models and unique architectures, creating far greater potential for differentiation and a wider competitive moat than text-based interfaces, which will become commoditized.
For companies with jaw-dropping technology, it's easy to chase 'wow moments' and PR instead of solving real problems. Synthesia instills a core value of 'utility over novelty,' obsessing over delivering value for enterprise customers rather than getting lost in the novelty of their own tech.
By releasing Sora as an API for developers and businesses rather than a standalone consumer app, OpenAI reveals its core strategy. The goal is to empower enterprise use cases like ad generation, not to build a new video destination to compete with platforms like YouTube or TikTok.
The real economic value of generative video lies in advertising, not filmmaking. Unlike movies with finite consumption, there is unlimited demand for personalized, diverse ad content. This makes advertising a perfect fit for the technology's scalable content creation capabilities.
Business owners and experts uncomfortable with content creation can now scale their presence. By cloning their voice (e.g., with 11labs) and pairing it with an AI video avatar (e.g., with HeyGen), they can produce high volumes of expert content without stepping in front of a camera, removing a major adoption barrier.
The founders, not being PhD AI researchers, knew they couldn't rely on being acqui-hired by a tech giant. This perceived weakness became a strength, forcing them to relentlessly focus on finding customers and building a sustainable business from day one, unlike many research-led AI startups of that era.