Perplexity AI's 'Un' perplexed Path!

Four friends come together to challenge the status quo in building the next gen AI search engine in this new age.

Jan 10, 2024

Image Credits: Prompt Engineering in Midjourney

'Innovation distinguishes between a leader and a follower.' - Steve Jobs

Hello Friends,

See the image above? Thats how Perplexity had me think about it. 4 friends- Aravind Srinivas, Denis Yarats, Johnny Ho, and Andy Konwinski who have come together to show us what the next gen AI search can be all about!

It's just another regular day, and there I am, doing my usual thing, researching on Google for my next blog. You know, the drill. But then, out of the blue, I stumble upon Perplexity AI 🧐. This next-gen search tool that's making waves might just be an innovation challenging Google's reign. Now, that got my attention! What's this Perplexity AI all about, and how is it shaking up the world of online search? Let's find out.

The million-dollar news that began my journey into Perplexity: On January 4th, 2024, Perplexity AI, an innovative search startup, successfully concluded its Series B funding round, securing an impressive $73.6 million. This funding round was spearheaded by prominent investors, including Nvidia and the renowned Amazon founder, Jeff Bezos 💰. With this substantial financial infusion, Perplexity AI's valuation has soared to an impressive $520 million.

'Your brand is what other people say about you when you're not in the room.' - Jeff Bezos

Founded in August 2022 by Aravind Srinivas, Denis Yarats, Johnny Ho, and Andy Konwinski, Perplexity AI has swiftly carved its niche in the tech domain, emerging as a notable player. Just to give you an idea of how fast they've grown – in December 2023, their website and mobile web saw a whopping 45 million visits, a massive jump from the 2.2 million they had when they first started in December 2022. Another interesting fact — Amazon CEO Jeff Bezos has put his bet on Perplexity, recognizing its potential to give Google a tough competition.

(From left: Aravind Srinivas, Denis Yarats, and Johnny Ho)

And potential they have! I must say! In just a short span, Perplexity AI has achieved remarkable milestones. By February 2023, the platform was already recording an impressive 10 million monthly visits, with 2 million unique visitors adding to its growing user base. Now, that's no small feat for a platform still in its infancy, wouldn't you agree?

What makes this accomplishment even more astonishing is that it was all made possible by a lean team of just fewer than 20 individuals 😲. This small yet dedicated group has played a crucial role in propelling Perplexity AI into the spotlight. Incredible things WILL happen when there is teamwork isn't it?

Aravind, in an interview with Forbes, when asked how they got started? He stated that they started by creating a database using Twitter information, which later became BirdSQL. They also used an existing search index to gather content from the web. Perplexity then added another layer to better organize and understand this content. As they grew, they even began building their own index.

It operates as a chatbot-style search engine. So, it is not the regular search engine that just gives you a bunch of website links and lets you figure it out from there. Instead, it uses OpenAI's GPT technology to provide direct text responses to your questions, making the whole search experience more conversational and user-friendly.

The founders of Perplexity AI had a clear vision when they started this venture. They believed that searching for information should be easy and efficient, without being bombarded by ads. They saw a need for a platform that could cut through the information overload we often face and give us precise, user-focused answers – something we all crave in a world where time is precious.

So, what powers Perplexity AI? At its core is the GPT-3.5 language model from OpenAI, known for its remarkable ability to understand natural language almost like a human. It's this technology that sets Perplexity apart.

NO PERPLEXITY (uncertainty) on the growth roadmap!

Now, let’s jump into what made Perplexity awesome in just a year. They've got three secret strategies that turned them into a big deal. Ready to find out how they did it? Let's go!

1. Pace-setting innovations and integrations

'Innovation is taking two things that already exist and putting them together in a new way.' - Bill Gates

Perplexity AI's first growth strategy revolves around speed. They regularly introduce new features or updates every week, outpacing competitors' lifetime developments in just a month. This nimble approach ensures they stay ahead in the tech game, emphasizing the importance of swift integration with the latest industry advancements. For businesses, this underlines the need to stay agile, continuously innovate, and remain relevant to enhance brand visibility and credibility.

Swift integration exemplified:

2. Putting users first

'I've learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.' - Maya Angelou

In steering its growth, Perplexity AI adopts a user-centric strategy, keenly attuned to the needs and interactions of its users. Notably, a substantial 78.7% of Perplexity AI's traffic, as of December 2023, originates directly, reflecting users typing in the URL or bookmarking the site. This speaks volumes about the platform's appeal, especially when compared to Quora. With users spending an average of 9 minutes on Perplexity AI—three times longer than on Quora—and a significantly lower bounce rate, the platform's commitment to user experience becomes evident. This focus on direct traffic and user engagement underscores Perplexity AI's unique approach in prioritizing user needs, setting it apart in the competitive landscape. Moreover, their marketing strategy blends virality, exemplified by cases like Bird SQL, with practicality, catering to everyday needs such as academic research, weather forecasts, and trip planning. This dual approach ensures a broad appeal while emphasizing the value the platform brings to users in diverse scenarios, contributing to its continued growth and popularity.

Here is a slice of Perplexity AI’s traffic for you:

3. Relevance beyond geeks

'Any product that needs a manual to work is broken.' - Elon Musk

Their third growth strategy focuses on turning their product into an essential part of users' daily lives, particularly targeting those less familiar with technology. Founder Aravind highlights their aim to go beyond tech enthusiasts and challenge Google's dominance by increasing user engagement. A key aspect involves optimizing their mobile app for widespread use, recognizing the importance of smartphones in daily routines. Despite being a young startup, Perplexity AI has already expanded its mobile product suite through the acquisition of Spellwise, an AI-driven iOS keyboard application, reinforcing their commitment to enhancing user engagement. The revenue model centers on subscriptions, with potential consideration for future advertising. Aravind envisions a Q&A system that transforms the user experience, moving away from intrusive sponsored ads prevalent in platforms like Google, drawing inspiration from tailored advertising experiences on platforms like Instagram. The key insight is that strategic foresight is crucial for entrepreneurs, shaping user behavior for sustained growth by increasing both the duration and frequency of user engagement.

A Tale of Two Searches or Beyond the Blue Links!

How is Perplexity AI different from Google?

This is a very crucial question here and the very purpose of my blog. Let me spell it out for you. Perplexity AI stands out from Google because it gives users detailed and well-rounded answers by combining information from various sources. For example, when you ask about renewable energy, Perplexity AI doesn't just give you links; it provides a comprehensive response covering different aspects like technology, policies, and market trends. This unique ability makes Perplexity AI a powerful tool for users wanting a deep understanding of complex topics.

It is only a matter of time when Perplexity will scrape Google’s search share pretty rapidly.

1. It is a conversational genius:

Perplexity AI's conversational search is more natural and effective than Google's keyword-based approach, especially for complex queries. Plus, it's transparent about where its information comes from, building trust with users.

While talking about building trust, sharing what Aravind had to say about accuracy:

“Maintaining precision at Perplexity is a testament to our exceptional search and AI team under Denis' leadership. We utilize an updated PageRank to construct a trust map of the web, prioritizing reliability from sources like The New York Times. Our results continuously improve through heuristics and data-driven learning from previous queries, showcasing our strong commitment to accuracy, a distinction from the business-driven priorities of platforms like Google.”

2. It is not less-advertisement, it is advertisement-less:

Unlike Google, which relies on ads, Perplexity AI offers an ad-free experience. This ensures search results are focused on quality information, prioritizing user satisfaction over advertising.

3. It says more with less:

Perplexity AI changes the search game by providing direct, comprehensive answers instead of just links. This is especially helpful for complex topics, making research more efficient by combining key findings, expert opinions, and data. The future of search is heading towards more conversational and personalized experiences, and Perplexity AI is at the forefront of this transformation.

Meet Other Cool Tools!

When you're in the business world, you'll always have others doing similar things. But, if you take some time to look at them closely—figuring out who they are, what they do, and how they're similar or different from you—you'll be better prepared to face whatever comes your way.

Starting off this section with Denis’ tweet

In the chatbot world of 2023, let's check out some competitors to Perplexity AI. These are like Perplexity, but each has its own superpowers. Whether you're seeking refined search results, content creation assistance, or a personalized chatbot experience, these alternatives have something to offer.

Giving you a concise overview of Perplexity with its competitors.

Ending the blog with some interesting thoughts shared by Aravind.

So, he thinks that sooner or later, more people will know about alternatives to big names like Google. But he's realistic. Right now, people are used to Google, and change takes time. Aravind hopes that once their tool matches up with Google and becomes even better (like, ten times better), more folks will switch over.

‘The value of an idea lies in the using of it’ - Thomas Edison

Now, what keeps Aravind awake at night? It's making sure their tool works awesome for you! He used to be all about fixing little issues, but now he's thinking big. How can they solve lots of problems all at once? That's the plan💡.

He's big on listening to users. If you say something's wrong, they want to hear it. No blaming you for not figuring things out – it's their job to make stuff easy for you.

And the last thing? Getting more people to know Perplexity exists. Imagine you have the best gadget, but if people don't know about it, what's the point? So, they're working hard to be not just good but also the one you trust for your online searches.

Simply put, Aravind and the Perplexity team aim to ease and enhance your internet searches. They want to be like your friendly guide in the world of online info!