Artificial Intelligence Podcast: ChatGPT, Claude, Midjourney and all other AI Tools

Is Artificial Intelligence Changing the World of Angel Investing with Pedro Lopez Sela

• Jonathan Green : Artificial Intelligence Expert and Author of ChatGPT Profits • Episode 353

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Welcome to the Artificial Intelligence Podcast with your host, Jonathan Green! In today's episode, we delve into the rapidly evolving landscape of artificial intelligence within the realm of angel investing. Our special guest is Pedro Lopez Sela, an experienced angel investor and venture capitalist, who shares his insights into navigating the fast-paced world of AI developments.

Pedro brings a unique perspective on how investors assess new AI products, emphasizing the importance of focusing on the core functionalities of the technology rather than getting distracted by the constant influx of new tools. He discusses the balance between innovation and security, especially in fields like medicine, where data compliance is critical.

Notable Quotes:

  • "At first we worked based on FOMO, but we came to realize that there are good enough tools right now in the market." - [Pedro Lopez Sela]
  • "There's such a difference between dabbling in a tool and expertise…" - [Jonathan Green]
  • "If something's free, you just don't know how you're paying for it." - [Pedro Lopez Sela]

Jonathan and Pedro explore the parallels between the current AI boom and the dot-com bubble, discussing how AI is integrated into business processes. They highlight the need for businesses to truly innovate rather than merely attaching AI to their brand for market appeal.

Connect with Pedro Lopez Sela:

If you're intrigued by how AI is revolutionizing the investment landscape or want to learn from a seasoned expert in the industry, this episode is a must-listen! Be sure to check out the provided links for more insights and connect with Pedro through his various platforms.

Connect with Jonathan Green

So is artificial intelligence changing the world of angel investing? Let's find out. Today's amazing special guest, Pedro Lopez Sela. Welcome to the Artificial Intelligence Podcast, where we make AI simple, practical, and accessible for small business owners and leaders. Forget the complicated T talk or expensive consultants. This is where you'll learn how to implement AI strategies that are easy to understand and can make a big impact for your business. The Artificial Intelligence Podcast is brought to you by fraction, a IO, the trusted partner for AI Digital transformation. At fraction a IO, we help small and medium sized businesses boost revenue by eliminating time wasting non-revenue generating tasks that frustrate your team. With our custom AI bots, tools and automations, we make it easy to shift your team's focus to the task. That matter most. Driving growth and results, we guide you through a smooth, seamless transition to ai, ensuring you avoid policy mistakes and invest in the tools that truly deliver value. Don't get left behind. Let fraction aio help you. Stay ahead in today's AI driven world. Learn more. Get started. Fraction aio.com. Now Pedro, I'm really excited to have you here because. Artificial intelligence is moving so fast that many people that are thinking in many artificial intelligence for their company or for their business, or even for their personal use, feel like it. They can't figure out what to do.'cause there's every day a new product, new technology. And even as a full-time artificial intelligence person, I always feel like there's something I, there's always something I haven't heard about. So from the world of an angel investor, like what do you look for when you're thinking of, when you're assessing a new product to see is this something interesting? Is this actually cutting edge or are there 10 other companies that have already started doing this six months earlier? Sure. So in, in our case 'cause I, financially I have two hats. The angel investing, but also venture capital. And in, in both. Teams. What we've come to realize is that, as you were saying, it is moving so fast that all the time you get messages from any channel saying that there's this new, very exciting toy that is even better than the ones you've used previously. And at first we, we worked, I guess based on fomo. And we wanted to try everything, but we came to realize that there are good enough tools right now in the market that we've been tuning ourselves and training ourselves. And with those those are the basis of the processes that we run. Sure. Whenever we hear about this new thing coming out, we try it except we, we do it at arms length and we keep on using what we've trained so far. I. I think that's a really important lesson because I often, someone will say to me, oh, I can't believe you're not using this new tool. Then a week later oh, you're using that. That's trash. That's last week's news. And it's exactly. I, the thing that drives me, the craziest is when people make lists of their 50 favorite AI tools, and I'm like, how do you possibly, how can you possibly use 50 different tools in a single week? That means you're spending. 15 or 30 minutes on each different tool, what could your job possibly be that you're doing? So many different things. And it's the same. I sometimes see like they have these PDFs or whatever on LinkedIn and the font is really small 'cause you have to fit in so much information. Uhhuh, I always think if you have to make the font on readable, you have a problem. And it's just, there's this. Pressure that people feel to try and keep up with the Jones is I have to use what the latest thing is and I'm really glad. You said, and this is my philosophy too, like I'm a chat GPT guy because that's what I figured out first. Sure. I use other tools a little bit, but I'm 80 or 90% of the time chat, GPT, and I still haven't used every single different thing that it can do.'cause they're releasing new features all the time. So the challenge is you. There's such a difference between dabbling in a tool and expertise, and I find that the more exciting something is, the less useful it is. Like the most useful tools in my business are the most boring, right? It's the tools that help me never lose anything or organize my numbers or keep me from missing meetings, like those little things, like one of the most valuable tools in my entire. Like repertoire is a tool that automatically switches to show whoever's talking in these podcasts. That used to be something we did manually a few years ago. I was manually doing it before I could afford to pay someone else to do it and now something like that. Or removing the silences, which sound, it's really boring, but it saves hundreds of hours per year and exactly that. Really something important. Now I'm really fascinated 'cause I know you do a lot of, in the world of medical and one of the big challenges with AI is that people get so excited. They jump in on new technology and they don't check and don't think about some of the security implications. I've known people who have accidentally released. Their entire client base or customer data, or we've seen lawyers who've testified with cases that don't actually exist, and I know for like doctors, we have HIPAA and we have different laws in every country that their data is so important and I've seen companies even say, I. We're HIPAA compliant, and then they winked at me and I said, wait, why did you wink? I'm really nervous right now, so I'm working on a major project right now where HIPAA compliance is absolutely critical. It's a major component of the business whenever we look at different tools, we go through this process and we can always tell when companies are serious because they ask us really. Hard questions or make us feel this complicated forms explaining how to maintain compliance. Are we SOC two compliant? Are we dealing with this and that? And that's what I look for from someone who wants to work with us. And so in the same way, that's how I approach a vendor. I. So when we're looking at, my whole team was like, oh, can we just use any AI we want? I said app. No. We have to have a ba. We have to have, a b, aa, we have to have this, we have to have a HIPAA compliant relationship with them. So they're not training the AI in anything we do. When you're looking at the world of medical, how can medical keep up with what's happening with ai while they also have to make sure like security is so important with the data? It's definitely one of the biggest topics, and especially I guess when you're using AI as a source of managing data from patients. There are, for example, some startups that we're working with that they use AI for non-critical nonmedical processes. So in that case, there's no biggie. They're using it for, I don't know, social media for straight lining some processes that do not imply data privacy stuff. So with them, I, we don't see any problem. Even some of the early startups are using it for product development, for, brainstorming and stuff. So there is no risk there, but whenever you're talking about somebody that is using it for some sort of diagnosis, so in case to do the diagnosis, obviously you need a. Data from the patient or people that are gonna do treatment. So also you need data from the patient in those cases it's it's basically a deal breaker for us because even though we would not. At the initial phase of the process, invest in the US or the European Union at some point, the idea is that startup actually goes to that market. From start we, we make the decision not to support them unless they're compliant with all the regulations and they're protected in terms of cyber security. Yeah, sometimes there's the mindset of beg for forgiveness rather than ask for permission. And I, I, in certain areas that's fine, like when you're brainstorming, whatever, but that's how I started working on some projects. Like it's so different to when you're working with your own data and you accidentally reveal your own personal stuff, but exactly that, it's like there are so many rules about patient identifiable information and. You have to go through a great deal of training to even know what kind of data it is. And I'm reminded of, like when I first learned about social media, everyone was worried about kids on social media many years ago. In the nineties, they were like, you would take a picture of you not realize you're standing in front of your school or you're standing in front of your house, and that one picture's filled with personal identifiable information. Now we're a little more aware of that, but I've seen those people that are professional geotags, you take a picture of a tree and they tell you what house it's in front of, so there's. The ability to understand data is something that's like really revolutionizing. And I think what counts as per side of integration is actually expanded because AI are so smart. And I think that there's this, challenge that people feel when they're thinking about implementing an AI tool, which is the balance between caution or conservatism and excitement. And it's I don't wanna be so far at the front that I throw caution to the wind, but I don't wanna be so late that I miss the wave. How do you find that balance? I think that's a really challenging place for a lot of people. It's like, when should I jump in? One of the, we've come to understand as a blessing that we have as a team is that we're Gen X. So that basically means that, we discovered color television, but right now we are using ai. So when you're talking about artificial intelligence and data privacy, for example some of us were part of the conversations about how to draft the first regulations of AI 30 years ago. So for us in that sense, we're very conservative. On the other hand, as typical Gen X we always wanna, be cool and everything in new tech appeals to us. So we're also very geeky and very gadgety. But that, I guess that's the balance. And to tell you the truth is just, something that ended up being part of our culture. Again, probably because of being Gen X. But we do take data previously very seriously. And on the other hand, we're also always curious and exploring new tools and new tools. Yeah, I think that's a really interesting perspective because when I talked to my kids about my childhood and how I was so excited, why parents got me a pager. They're like, what's a pager? And I explain that. And they like, someone sends you a message that's their phone number. Then you go to a payphone to call them what's a payphone? Uhhuh? So it's like a lot of meeting someone, you just set a time and you're both there at the same time and you hope the other person shows up. They can't even imagine that. They still can't believe my a touch screen. And if I told them when I grew up, yeah. My first tv, you had to push the buttons down for the different channels that would click. Exactly. We didn't have the wheel. I can't even imagine that. And they say, how'd you choose what to watch? I'm like, oh, the TV tells me what I get to choose. Whatever's on is what I watch. We had three channel and that choose so technology is moving very fast when you're looking at, a company that HA is looking for investment, either early stage or, and they're trying to raise money. What are the kind of things you look for? Especially with ai, we've seen a lot of companies change their stock, take or have AI in it, or claim they have an AI feature and do an IPO or some type of launch and then it turns out. Not, they don't have any AI technology. They oversold or maybe even, they're just like a chat GBT rapper. Like they're just Exactly. Really, they're pretty cool. Prompt in the middle. Uhhuh, what's your assessment process like? Like how do you sniff test? I. We've been doing it stuff for many years now. And one of the things that we understand today or the vision that we have about the market today has to do with AI becoming like the new internet when the, dot com bubble. Happened. One of the things that we've seen in the last five years is that especially when Sam started doing his stuff and he became like super famous and Chachi p teachers became something critical for processes today. We started seeing specialists of ai everywhere, right? And we even saw in some regions VCs transforming into AI only. And that was pretty funny to us.'cause again, we understand AI as part of the IT world, meaning that it is a tool for stuff. You can do a lot of stuff with ai, but in that sense when we look at startups that say that they have ai. We, we first of all try to understand what are the critical processes that they have as a company, and if that process is being supported by ai, then we take them seriously. We've come to conversations with people that are using ai, but it turns out that they're using it to social media of the company. It's, we're happy for them, but that doesn't mean that they're actually building ai. They're just, doing a 150 character messages for X or that sort of thing, right? The other thing also is that we differentiate today the two types of people that approach the AI space. The guys that are wrapping stuff on top of or around. Chat, GPT and tools that are out there off shelf in the market and the guys that are actually training algorithms to do something different. And especially with the startups that we work that are at in the space of developing vaccines, developing molecules. That sort of thing. You cannot use chatt PT for that. You need to develop your own algorithm in your own language, in your own application, and it's very different. Yeah, I think that it was one of the biggest changes I saw was the number of people's LinkedIn profile change to AI expert, an AI consultant. And what I find is that a lot of people oversell. So whenever I work with a Klein or project, I have to really make it clear what I can and cannot do. Like where my expertise begins and ends and there I don't come from the computer programming world, I just happen to have this Chachi PT thinks the way I do, like whenever I would answer. Chachi B thinks the same way. We have this simpatico, so I'm able to really prompt well because of this expectation of it always says what I think it's going to. That's not the same as being a programmer. Like I was reaching pro for a major job and they start talking about robot process. I said, let me explain what I can and cannot do. Because what I don't want is to be in a meeting where some suddenly someone suddenly realizes I don't know how to do that thing. So it's more important for me, I say I don't work with clients above a certain size. I don't work on a certain type of project. I'm able to do this and that. And I just got brought in on a really big project recently.'cause I said, listen, I'm not a programmer, but I know how to talk to programmers and how to run a team.'cause I have some really good AI engineers work for me, and I think that's really critical is that it sounds really cool to oversell yourself until you get a job you don't know how to do. And. That's not where you want to be, even though it seems exciting, we're actually seeing that a huge problem with that. Now, with job seekers, it's a similar thing where a lot of people oversell what they can do. They have an AI write the resume, then an AI do the resume, and it just, it doesn't make everything better.'cause then you're on the interview, and I've even been on interviews where someone's clearly using Chachi BT to the side. I can see the reflection in their glasses. So it's yes, it's a cool tool, but it's important to know your limitations and to know what you can and cannot do and certainly now, especially with a lot of things happening in Ag Agentic, a lot of the more things where it's turning now back from using AI into doing a lot of programming with ai. Again, I'm starting to go, oh, that's a little bit beyond what I can do. So I'm hiring more and more teams to fill in that gap and I. That's really where we're seeing the same thing happened like 25 years ago or early two thousands where suddenly everyone was a web designer and we got some really rough websites. Like sometimes you go back and look at websites, looked in 2000. You go, oh my gosh, this is wild. So I think that this is an important lesson for people that are thinking about finding a comp, founding a company. It's. Are you doing something unique? And do you have, how much control do you have over it? So whenever you build on top of another platform, do you own your business? What happens if chat GB changes their API? And I've seen this happen to me in real time where a prompt stopped working without an official update. So whenever I would create GPTs in September, October, I would say. What do you look like? Create an image. And I would use that image as the image in the little circle. And suddenly in the middle of the day, he goes, I can't make images of real people. And I said, wait, did you just go sentient? Did you just think you're a real person? Uhhuh? But what happened is they changed a rule in the backend. They changed something that made, it couldn't, because I'd done like 10 in a row, I'd been doing it all the time. It suddenly wouldn't let me do it anymore. And it was like one of their many unannounced changes and. What happens if your entire infrastructure's built on top of that? So that's a danger. It's like people who build a Facebook business yeah, it's a business, but if Facebook makes a change, change their terms of service, deletes your page, you're outta business. And that's a very dangerous place to be. And now we're seeing so many different ais, A lot of ais are coming outta China that are really competing on price. But one of the things I always say is, if something's free, you just don't know how you're paying for it. And, the other thing that coming back to your example about the webpages again, I think AI is behaving like a typical IT development as a market, which to me means that right now there is obviously the people in the business doing what they've been doing for the last 50 years or so, and there's also the IT people. That now are specialized in ai, but again, as it happened 20 years ago, there are very few people that actually are able to work ambidextrously in, in both worlds. And those are the guys, that I've been hearing a lot about in conferences the chief artificial intelligence officer the person that understands the business and knows how to use the tools and I think that position is actually underrated.'cause I think that if you have somebody in your entity that actually understands the technology, but also understands the business, that would be a massive differentiation and opportunity, yeah, I, the first thing I do whenever I work with someone on a project is say don't assume what's easy and what's hard or what's possible and not possible. Just make a wishlist. If AI could solve every problem for you in your business, or if. It could make the thing you hate go away. What would those things be? And without fail, the things they think are the hardest are always the easiest. Always the things that they think, oh, this will be super easy. And I'm like, that's a really hard process. Or it's almost, it's currently impossible. Like we'd have to build a custom bridge because that doesn't exist yet. So I try to help people to realize that. Even things that are impossible today might be possible tomorrow with a new update or with a new tool. And it's that ability to see the usefulness. And that's what I've seen as I've started to lead larger and larger teams is that it's not getting your head down and typing the code. That's not as important as much. Anymore, now that I'm leading 15 developers, it's really figuring out how to keep them from fighting with each other, how to keep them all going in the direction, right? Uhhuh, how to keep them from not accidentally coding over topic like the things that I solve. And what I found is really interesting is actually that. Coders and like dreamers, right? The CEO often thinks so differently and they'll be having a conversation, neither will understand what the other person is saying. And I've realized, and it's taken me a while to realize the thing that I'm really the best at is that translation.'cause I understand both of them and I take. What someone wants, whether it's a client or someone I'm working on a larger project with, and I can draw the pictures out and say, this is what the process will be. This happens, then this and this with squares or a flow diagram. And then the engineers go, oh, now I get it. Why didn't they just say that? And it's you don't realize how important that is until you see two people not speak the same language and they just get louder and louder to solve the problem. And engineers really don't like surprises, don't like creativity. They don't wanna be distracted. And I've found that people's this is the thing is that once I understand what time of day, I can ask each engineer questions. I know to leave them alone.'cause when you're in the zone, you don't wanna lose the flow and lose what you're working on. And I get that. So dealing with those personalities, I've found, oh my gosh, I've always thought I was farther at the dream end, but now I'm like, maybe I'm not that creative. Maybe I really am engineering because I'm the same way. Once I can only do one thing at a time. There's no way I could have something else going on another model while I'm talking to you. No way I can. I can think about one thing at a time, and that's really linear thinking for me. So I think this is really interesting for people to start to understand that there's a lot that's possible with AI and that it's more about. Starting to think what if it could do anything, what could it do? And then looking for the tool as opposed to looking for the tool and saying, how do we use this? Because that's what happens when I go to the hardware store. If I buy a tool, I come home, I'm using that hammer on everything where I'm measuring the kids, whatever I bought, I have to use to show, to justify the expense. And I know some companies are doing that because there's this pressure to be an AI company or forward thinking company. And I really encourage people, and I love. See it in the same way, which is, look for the problem first. What do you wanna solve? And then figure out which is the right tool, because that's really where the magic happens. So for people who are thinking about or really interested in medical AI or angel investing, or seeing how AI is changing the world of investing, changing how we can assess a company and all those things, where can people find out more about what you're doing, connect with you online and just see some of the amazing stuff you've been posting about recently. So we're, you can find us as my, my myself Pedro ela and also the venture capital firm called Frozen Capital. And you can find us in social media. We have a podcast called The Outliers in YouTube, in Apple podcasts and where we talk with portfolio companies and people that co-invest with us. And we're also writing a lot of stuff articles in blocks in the US and some business magazines as well. Under my name LinkedIn, X and Facebook are the usual social media that we post information and, happy to talk to people. We've been in the it space for a while now, that you were talking about the. Of and the different, work ethic of developers. We had a non-for-profit that we created back in the nineties called Mento Geek for Latin Americans. And one of the crazy things that we tested there was what would happen if we taught business skills to developers. These were kids that were just, finishing a computer engineering school. It was fantastic 'cause we were able to, again, thinking about languages, it was just like, teaching an American to speak Spanish or a Latino to speak English and it was just, the developer learning this new business language that was gonna be useful for them. Those guys ended up becoming amazing entrepreneurs just because of that.'cause they were able to understand how their clients worked and on top of that, they were able to develop the code. So if you're able to do that I think that you can do amazing things. That's amazing that you're helping coders to see the business.'cause sometimes that gap is hard to bridge. But that's an amazing place to be because there's so many opportunities. And we'll make sure to put the links for everything in the show notes and below the video on YouTube and link to your stuff. And I'm a big fan of what you've been doing. I'm really excited we had you on the show today. I know people are gonna love this. Thank you. Thank you for having me. Thank you so much for being here for another amazing episode of the Artificial Intelligence Podcast. Thank you for listening to this week's episode of the Artificial Intelligence Podcast. Make sure to subscribe so you never miss another episode. 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