Transitioning from edtech to AI

In 2021, Matveev co-founded an education startup that grew into Eastern Europe’s largest online school, achieving over $120 million in annual recurring revenue by 2022. However, his experience in edtech highlighted the challenges of scaling education, which in turn inspired his shift to AI.

“As an entrepreneur, I love the idea that any business boosts economics, but to double in size we either need twice as many people, or to make them doubly more educated. Both processes are very slow and badly scalable.”

Recognising the transformative potential of AI, Matveev relocated to London to start a new AI project, as he saw AI as a catalyst for change – akin to the Internet’s impact in the early 2000s – predicting that AI’s ability to process and generate intelligence at a low cost will drive significant structural shifts.

Educating AI development: lessons learned from edtech

Matveev’s experience in edtech has been a huge influence in his approach to AI, and he notes that the success of educational technology often relies on making learning engaging and interactive, drawing parallels to entertainment.

“The best edtech companies today are very similar in terms of content creation to entertainment publishers. Like Duolingo – is it an education app or a game?”

Applying this logic to AI, Matveev aims to develop human interfaces that are lively, personal, emotional, and entertaining. While the company’s current efforts focus on underlying technology, the next step involves creating user-friendly interfaces for AI products.

AI’s impact on traditional industries

Matveev predicts that industries involving text processing will be the first to undergo transformation due to AI. Legal services, for example, could see significant changes as AI’s ability to process vast amounts of data and solve complex logic tasks offers unprecedented capabilities.

“AI has two superpowers. First, it can process huge amounts of data: if you want AI to play the role of the greatest lawyer, it can read all the details of all laws, acts, even very small notices, all court practices, and create extremely detailed 'domain knowledge' on your specific topic. Secondly, it has a very strong and fast-developing reasoning skill (like solving very complex logic tasks). It means that as a lawyer, it can find all contradictions, make the best conclusions, and highlight logical mismatches in 100-page-document, etc.”

According to Matveev, other sectors, such as logistics, healthcare, and automotive, will also experience AI-driven transformations as the technology promises lower operational costs and increase predictability in output quality, enhancing efficiency across various fields.

Democratising data-driven decisions

Matveev believes that AI can bridge the gap between the average person and those with access to expert advice.

“We believe that in a new era of AI, the gap of access to the best knowledge and human expertise between the average person and the most powerful people, will narrow.”

By providing affordable, high-quality advice, Matveev believes that AI has the potential to democratise decision-making, making expertise accessible to a broader audience.

Enhancing team dynamics and productivity

AI holds promise for optimising human labour productivity, and Matveev envisions a future where AI can manage entire business processes, from market research to customer support, allowing companies to operate with minimal human intervention.

“AI for market research, AI to conduct user interviews and systematise user needs, AI to help you write code … The role of humans would be more the facilitation of core business logic.”

This radical shift is something he believes could lead to unprecedented productivity gains and new business models, transforming traditional industries.

Preparing for an AI-driven future

The advent of AI will necessitate a shift from hard skills to soft skills, with human workers focusing more on understanding needs and interactions.

“You can consider AI as a smart calculator. You don’t need to know the formula to calculate petrol spending on a trip … you can just ask ChatGPT to make calculations based on relevant data.”

Mastering soft skills will become increasingly important as AI handles more technical tasks. Understanding user needs, designing intuitive applications, and ensuring positive experiences will be critical competencies in an AI-dominated landscape.

Broader social impacts of AI

AI’s potential to consolidate power presents significant societal challenges, and Matveev expresses concerns about the misuse of AI and the societal changes it may bring.

“AI companies would consolidate so much power, which was never possible before … AI is like a ‘sharp knife’: it can be very useful in the hands of talented chefs and dangerous in the hands of a local gangster.”

Because of this, Matveev advocates for gradual, incremental AI updates to allow society to adapt and mitigate potential risks.

Operating in stealth mode

Matveev’s AI startup has been developing its core technology in stealth mode, balancing the need for rapid development with user feedback and market readiness. He outlines the trade-offs.

“If you release too early, your product is poor and nobody is interested in it. Innovations you could have may be copied very fast. But releasing too late can lead to a lack of user feedback and fewer partnership opportunities.”

The startup has engaged a small group of users to refine its technology, preparing for a broader release aimed at disrupting multiple niches.

Scaling and sustainability

With over $1 million in self-funding, Matveev’s strategy focuses on creating a “magic” AI technology that surprises users. He believes that securing further funding will be straightforward if the product demonstrates strong market fit and user engagement.

“The biggest problem for most startups is that the product is bad, or they cannot find a proper customer for it. If you solve these problems … fundraising is not the issue.”

The future of AI in traditional professions

Matveev anticipates rapid advancements in AI capabilities, leading to widespread integration across all sectors. AI will evolve from chatbots to self-sustained entities capable of performing complex tasks autonomously. Robotics will further enhance AI’s impact by automating physical tasks, reshaping the labour market.

Advice for aspiring tech entrepreneurs

For young entrepreneurs, Matveev sees AI as a game-changer, providing tools and resources to innovate without substantial capital. He advises leveraging AI for research, product development, and marketing, emphasising the importance of continuous learning and exploration.

“I recommend for people starting their journey that they ask AI research tools a lot on everything unknown, ask questions, consult in every area within context to your very specific situation. Also use a lot of no-coding AI services for marketing, develop products, use co-pilots like Cursor to build a product.”

Matveev concludes with an optimistic outlook, encouraging entrepreneurs to embrace the opportunities presented by AI: “We live in the most interesting and overwhelming time!”