They say that there was a time when ‘you could stick any stick into the internet, and a tree would grow from it.’ But now, the sticks need to be stuck into AI 😉 This startup managed to reach the 7th place in the global top of AI websites without developing AI technologies and without spending money on advertising. And in general, many sites from this top can still be copied—because the potential for AI market growth is still enormous.
The Essence of the Project
Civitai is a website where people can post images created with the help of AI.
The catch is that they don’t just upload images there. They must provide a list of instructions (prompts) they used to generate each image. This allows others to use the same prompts to create their own pictures in a similar style or to inspire further experiments.
To encourage the activity of image creators, the startup regularly holds contests in which participants try to match prompts to replicate the styles of famous artists, photographers, comics, and TV shows. The screenshot above shows attempts to replicate the style of artist Ivan Bilibin and photographer Man Ray (who, it turns out, was actually named Emmanuel Radnitzky).
Recently, the site launched another type of contest – where participants try to pick prompts to create artistic analogs of real people’s images.
However, this type of contest caused controversy because many participants decided to create erotic and pornographic analogs of the figures presented in the contest, opening up unpleasant possibilities for publishing ready-made fake photos of famous personalities, colleagues, and classmates on the internet.
The platform initially appeared as a hobby project. But when it gathered 100,000 registered users by January 2023, the founder thought about turning the hobby project into a startup. Three months after that, the number of registered users on the site grew to 1 million. Now, it has 3 million registered users and about 12 million people visiting it each month.
Civitai has not yet implemented any monetization methods on the platform. Despite this, in June, it raised $5.1 million in investments in a round led by the well-known venture capital firm Andreessen Horowitz (a16z).
What’s Interesting
Erotic fakes of real people are not the only problem Civitai faces. The creators of images uploaded to the site usually use the works and styles of other authors for copying and inspiration, which those authors consider their intellectual property – and this causes their displeasure.
In such cases, the site tries to resolve the issue – by removing dubious works, specially marking them, or removing the original author’s name. However, every problem is a potential opportunity 😉
“Ideally, we want,” says the founder of Civitai, “for original work authors to allow others to create works in their style. But not for free, but for money.” “However, so far, I have not been able to find enough authors who would be interested in this opportunity,” he admits, “Although, perhaps, the time for this has not yet come.”
The possibility of creating derivative works is an interesting trend, the time for which, in my opinion, will come sooner or later.
The second trend is the clear recognition that people can use AI tools for creativity.
At the very least, this gives them the opportunity to significantly speed up the time of creating their creations. This fact was used by the startup that created the Hive3 platform, which I wrote about a couple of weeks ago. The platform regularly announces contests among creatives to create advertising campaigns, pictures, and videos for brand clients. The main condition is that all these works must be created using AI tools. This allows contests to be held in just a few days – but to get a sufficient number of good-quality works. The startup that created the platform raised $10 million in investments.
But even more importantly, the use of AI tools gives people who do not possess basic professional skills the opportunity to create. It is possible that with the help of AI, a person who cannot even draw can become a brilliant artist. This may seem like a paradoxical statement. But why not? If he has great ideas that he simply could not implement before at the necessary technical level.
Civitai turned out to be so interesting to the audience that it reached the 7th place in the list of the most visited sites in the field of generative AI, the first three places of which are occupied by ChatGPT, Character.ai, and Bard from Google.
Surprisingly, the audience for almost all products on this list was gathered from organic traffic.
If you take even the products from the bottom quarter of the list, whose creators are concerned about the problem of traffic growth – only 2% of the traffic comes to them from paid sources. If you take non-generative AI subscription products, then, according to a16z, paid traffic to them accounts for a whole 70% of total traffic.
And people are willing to pay for these products! 90% of the sites on the list have already enabled monetization, typically by a subscription model with an average price ranging from $21 per month to $252 per year.
Organic traffic and enabled monetization have allowed almost half of the companies on the list to do without investments at all, as they earn money and do not need to pay for advertising.
Where to Run
I have already written that the magic letters “AI” are almost the only thing that investors are currently eager to bite on. But as it turns out, the situation is even more fun 😉
In the AI theme, it is still possible to create startups that can earn and attract users without spending money on advertising – and at the same time make it to the global tops. Moreover, it is not even necessary to invest in the development of “space technologies” used by, for example, OpenAI (ChatGPT) or Google (Bard).
A bright example of this is today’s Civitai, which made it to 7th place in the global top without any special technologies and surpassed several other companies engaged in developing technologies and training their AI models. Its focus is that it gave some people the opportunity to “show off” their successes in mastering AI tools, while others could use other people’s developments.
So, if you don’t bother with developing AI technologies, the general direction of movement can be formulated as creating platforms that help people use modern AI tools.
The options for such platforms can be very different. The startup Gushwork, for example, went in a similar direction to Hive3 – but created a marketplace where companies can hire freelancers using AI tools. Gushwork is even ready to pay freelancers for courses on mastering AI tools, deducting the cost of these courses from their future income. It raised $2.1 million in investments.
The early years of the internet are now considered a time when “you could stick any stick into the internet, and a tree would grow from it.” The current stage of AI development can be called a repetition of those times – only you need to stick the stick not into the internet, but into AI 😉
Thus, it is quite realistic now to create an AI-themed product that can take off on its own – without investments and without advertising expenses. The main thing is to find out exactly where and what stick to stick in.
By the way, in those years on the internet, the most lush trees did not necessarily bloom among those who managed to stick the right stick first – but among those who watered it properly. Price.ru, which I created back then and then successfully sold, was the seventh price catalog in the internet – but it was the one that became the leader in this segment at the time.
So right now, it’s still possible to copy other startups that have already gained popularity in the AI theme – and outpace them. After all, the AI market is still in a stage of rapid growth, and the reserve for overall traffic growth in the theme is so large that there is still plenty of time to maneuver around the pioneers.
About the Company
Civitai Website: civitai.com
Last Round: $5.1M, June 28, 2023
Total Investments: $5.1M, Rounds: 1