What you need to know:

• Andi positioning itself to exploit the dislocation and disruption caused by generative AI.
• It's backed by Y Combinator as well as a clutch of former PBL executives, including former Seven West COO Nick Chan and former Pac Mags boss and current News Corp exec Peter Zavecz.
• Andisearch is described as a mashup of Google and ChatGPT.
• LookSmart co-founder Evan Thornley says ChatGPT is the third great internet disruption he witnessed (Google was the second).

Evan Thornley, founder of internet search engine LookSmart, and one of Australia's most successful entrepreneurs during the first dotcom boom says he has witnessed three profound internet disruptions in his life. The first was Mosaic (later, Netscape) the original browser that freed users from the tyranny of the unix alchemists and made the web available to anyone smart enough to point and click.

The second was Google search. "It was very clear, very quickly when Google came along because it just went viral. Everybody said 'Try this new thing.' "

Now, according to Thornley, ChatGPT is the third. "I think this is an earthquake of similar magnitude."

From ancient grudge...

Google wasn't first to market, it wasn't even particularly a fast follower, says Thornley. Indeed most of the first generation of search engines IPO'd in 1995, three years before Google was founded.

It won because it used new technology and a new approach to revolutionise search, he said. "Up until that point, all the search engines had built algorithms based on documents having frequency and proximity of keywords."

Google's founders took a really powerful analogy from the world of academia from where they hailed and applied it to search algorithms, he says.

"When you publish an academic paper, if it's a really good paper, then other people will cite your paper in their paper." 

That was Google's magic trick – applying citation analysis to search.

... break to new mutiny

Amidst the distraction caused by the stoush between Google with its recently announced Bard AI, and OpenAI’s ChatGPT (which is very heavily backed by Microsoft), the newly contestable search advertising market is again attracting entrepreneurs and the people who fund them.

One such company is Andi, a conversational AI assistant with a strong Australian pedigree. It has an Australian co-founder, Jed White, and early investors including three of White's former Publishing and Broadcasting Ltd alumni, Nick Chan, Tim Trumper and Peter Zavecv.

Fast Company described Andi as a mashup of Google's search and ChatGPT — currently the poster child for generative AI.

Investor interest in Generative AI (which includes much more than just search tools —  a relatively small sub-category in terms of bucks bet) has soared over the last five years, from a parsimonious $71M spread across 23 deals in 2017 to $2.65bn across 110 deals last year, according to CB Insights.

However, it is ChatGPT that has caught the public’s imagination and brought the potential for disruption to the search industry into sharp relief. A million people registered for the site in its first five days – Facebook by comparison took a year to achieve that benchmark.

It also demonstrated how comically disloyal internet users can be when something shiny and new emerges, even after they have been baked onto a 20 year old search model that is so ubiquitous it’s become a verb. 

It's happening again

The potential for disruption is not news to Google’s owner, Alphabet.

Speaking at Brainstorm Tech 2022 in mid last year, Prabhakar Raghavan, Senior Vice President, Google cheerfully conceded that the kids are doing their own thing. “Something like almost 40 per cent of young people, when they’re looking for a place for lunch, they don’t go to Google Maps or Search. They go to TikTok or Instagram.”

It is likely then, that the next generation of search tools will be much more tailored to the kinds of users who enjoy their search results served up in short snackable Megan-Trainor-dance-meme sized bites.

It’s a point not lost on Angela Hoover, the other co-founder of Andi. The user experience she and White have created will likely be much more familiar to someone born after Google was founded, rather than before.

“It’s hard to find what you need online," Hoover told Mi3. "Current search engines are designed for how the web worked 20 years ago. Now, the cognitive overload of ads, SEO spam and links overwhelm the user and can lead to much distraction and time wasted.”

She says the future of search is conversational AI that provides quick, accurate and summarised results. 

“Andi is building this, we pioneered conversational search and built the first smart search assistant using gen AI to find the right answers and give you clear summaries of the best content, like chatting with a smart friend.”

According to Hoover, the company’s early users say the search engine, which is still in alpha, is “like magic” and can save them time by getting them straight to the right information, and giving them the answers they need immediately.

Creation myth

The company was founded by Hoover and White after their paths crossed in an airport in Denver where, in the best tradition of tech-sector creation myths, they bonded about how search was broken, and what it would take to fix it. As you do.

At the time Hoover was a Gen Z college student who had just finished a backpacking trip and White, an Australian and long-term US resident, was an AI hacker.

The company has been through two capital raisings, the first for $US600k and the second for $1.9m. Trumper, Zavecv and Chan were all involved in both raisings. Chan also worked directly with White previously, during their time at PBL's Australian Consolidated Press in the 1990s where White was a technology journalist. 

Venture capitalists including Gaingels, Goodwater Capital, and K20 Fund have also invested in Andi, in addition to Y Combinator, the start up accelerator which helped to spawn companies such as Reddit, Stripe, Deel, Instacart, Doordash, Airbnb and Twitch.

Chan, former boss of Pac Mags and Bauer and one-time Seven West COO, is placing his chips on Andi. But he's also realistic about its market maturity. “Y Combinator has a concept called product market fit. And you need to kind of get yourself to a stage where you're at product market fit. We don't think we're there yet.”

Chan, however, says Andi is further ahead of others who have tried to copy its approach – and he believes the search market is ready for a change.

“Google makes something like 65 to 70 per cent not just of its revenue but also its profit from search. It's very hard not to be biased in what you end up serving up when somebody searches for something.”

That has created an opportunity for businesses like Andi to carve out lucrative niches.

Chan believes Andi is well placed to serve a contemporary online community that brings a different set of values to its digital engagements. That's as opposed to the Gen X's, those strangers in a strange land who first stumbled into the birth of the internet, whether they wanted to or not. 

“Andi not only talks about search for a new generation, but that their purpose, their mission is to actually unbreak the internet and return it back to more of a service."

Hard row to hoe

While it has dealt itself into the biggest game in town, from a market and innovation perspective Andi finds itself between two hungry dogs and a bucket of blood, as announcements yesterday by Alphabet and today by Microsoft attest.

Startups are imbued with agility, speed and boundless possibility, but incumbency has its own brutal advantages; cash, distribution, brand, and the one everyone forgets, patience.

Time will tell. But the smart money is doing its talking.