Why ChatGPT will be the next big growth channel (and how to capitalize on it) | Brian Balfour (Reforge)

Overview

This episode explores the transformative potential of ChatGPT as the next major growth platform, drawing parallels to past platform shifts like Facebook and Google. Brian Balfour, founder of Reforge and former VP of Growth at HubSpot, outlines the four-step cycle of platform evolution, predicts ChatGPT's imminent rise as a third-party platform, and provides actionable advice for startups and companies to capitalize on this opportunity.

Notable Quotes

- Building a great product is necessary, but not sufficient. The separation is between those that build really great distribution. — Brian Balfour, on the importance of distribution in startup success.

- There is no opting out of the game. If you don't do it, your competitors will, and your customer expectations will change. — Brian Balfour, on why companies must embrace new platforms like ChatGPT.

- This is the opportunity to disrupt an incumbent. — Lenny Rachitsky, on the potential for startups to leverage new platforms to challenge established players.

🧠 The Four-Step Platform Cycle

- Platforms evolve through a predictable four-step cycle:

1. Market Conditions: A competitive environment emerges with no clear winner.

2. Moat Development: Platforms identify their defensibility (e.g., Facebook’s friend graph, ChatGPT’s memory and context).

3. Platform Opening: Third-party developers are incentivized to build on the platform, creating an ecosystem.

4. Platform Closing: Platforms restrict access to monetize and maintain control, often disadvantaging early adopters.

- Historical examples include Facebook’s social platform, Google’s search ecosystem, and Apple’s App Store.

🤖 ChatGPT as the Next Growth Platform

- Brian Balfour predicts ChatGPT will launch a third-party platform within six months, offering developers access to its memory, context, and distribution.

- ChatGPT’s competitive advantages:

- Superior retention and engagement compared to competitors like Claude and Gemini.

- A growing ecosystem of preferred partnerships (e.g., HubSpot).

- Companies must act quickly to integrate with ChatGPT or risk falling behind competitors.

🚀 Strategic Advice for Startups and Companies

- For Startups:

- Focus your resources on one platform and go all-in.

- Use the early, open phase of a platform to achieve rapid growth before it becomes saturated.

- For Established Companies:

- Place multiple bets across platforms but avoid waiting too long to commit.

- Develop an exit strategy to maintain independence as platforms close.

- Evaluate platforms based on retention, user quality, scale, and the value exchange they offer.

🏢 Lessons on AI Adoption in Companies

- Companies succeeding with AI adoption are setting hard constraints (e.g., limiting headcount growth unless AI is leveraged).

- The most effective organizations are addressing bottlenecks like IT, legal, and procurement, which often slow AI adoption.

- CEOs must stay connected to the ground-level implementation of AI tools to ensure alignment and progress.

- Cultural transformation is key: companies must align their teams around AI-native principles and exit those resistant to change.

📈 Why You Can’t Opt Out

- Ignoring new platforms like ChatGPT is not an option. Competitors will adopt them, raising customer expectations.

- Historical examples like Zynga on Facebook and Substack’s early adopters show the outsized rewards of being early to a platform.

- The window of opportunity is shrinking as platform cycles accelerate, making early action critical.