Since the middle of 2022, the AIGC track has lasted for more than a year. However, despite the lively atmosphere, there are only a handful of companies making money. For instance, Midjourney, with only 11 employees, achieved $100 million in ARR without relying on VC funding, while Jasper, lucky as it is, reached $75 million in annual revenue by taking advantage of information asymmetry before the ChatGPT explosion. Zhang Yueguang, who famously stated that "AIGC's products may not receive payment on the first day, and may not receive payment at all," was responsible for the initial success of the Miao Ya camera.

In addition, there are not many native AI application companies that can make money. Instead, there are more bloggers selling the anxiety of "AI replacing workers," selling courses, or releasing brainwashing videos to teach users how to make money using AI. After all, the most profitable business is teaching others how to make money.

Recently, a foreign AI application called Heygen, which can make people in images "speak," has become popular on social platforms in China, especially with some KOLs creating short videos of Taylor Swift speaking Chinese, further boosting the product's popularity.

(Video source: johnhuu English teaching)

(Video source: @Gorden_Sun)

The individuals in the video can fluently express themselves in both Chinese and English, with their lip movements and subtitles almost perfectly synchronized, and the audio matching seamlessly, without any dubbing feel, which is truly impressive.

The video creator, Gorden Sun, praised the generated effect, considering it the best video translation he has done so far. Although there are some flaws, HeyGen only uses a 40-second video to clone the speaker's tone and intonation, so what more could you ask for?

This overseas product, HeyGen, was founded in Los Angeles by Joshua Xu and Wayne Liang from China. HeyGen was initially named "Movio" and was a platform that used generative artificial intelligence to create videos. It achieved $1 million in ARR in 178 days after its launch in July 2022, and reached a "ramen profitable" state in 217 days. As of April this year, HeyGen had approximately 30 employees distributed across 3 continents, 4 countries, and 6 cities.

(Image source: heygen)

Why did HeyGen succeed?

Innovating with AI. Using artificial intelligence to revolutionize the content creation process and ultimately replace the camera, allowing people to complete content creation at a lower cost, has always been Xu Zhuo's entrepreneurial original intention. This original intention is also reflected in the company's name, as Xu Zhuo's company name in China, "Shiyun," is taken from Liu Cixi's science fiction novel "Shiyun," symbolizing that human creativity cannot be replaced by technology, but the process and efficiency of creation can be greatly optimized by machines.

The subsequent product released by the company, HeyGen, also incorporates the shadow of generative artificial intelligence (Generative Artificial Intelligence) in its name.

Creating value. Xu Zhuo graduated with a master's degree in computer science from Carnegie Mellon University and worked at Snap for 6 years. During this time, he played a core role in commercialization, recommendation algorithms, machine learning platforms, and company products. Despite his impressive technical capabilities, Xu Zhuo believes that market demand comes first. Recognizing the demand for "face replacement" in advertising by cross-border e-commerce companies during his time at Snap, Xu Zhuo founded the company, focusing on the advertising and e-commerce industries as the first landing scene.

Seizing the opportunity. Xu Zhuo initially chose to establish his base in China, which in hindsight seems to have been a detour, but fortunately, he promptly shifted his focus to overseas. In November 2020, after working at Snap for 6 years, Xu Zhuo returned to China to establish Shiyun Technology and launched the product Shiyun Malang, which can achieve AI drawing and face swapping functions. However, this product did not leave much of a mark in the market, and Shiyun Technology's website in China has already been shut down.

The well-known Heygen is a company registered in Los Angeles, with the original founders still at the helm. Xu Zhuo serves as the CEO, and his old partner Liang Wang is the CPO, and they are alumni, having previously served as the North American design director at ByteDance.

In contrast to the lukewarm response to Shiyun Malang in China, Heygen achieved $1 million in ARR in 178 days after its launch in July 2022, and reached a "ramen profitable" state in 217 days. Although the latest data has not been disclosed officially, based on the website traffic, Heygen's visit volume surged by 92% in September, ranking first in the domestic AI product list for overseas expansion. It is believed that the revenue data should also have increased significantly.

(Image source: @FinanceYF5)

Why did the original team achieve such different results in China and overseas?

The reasons are multifaceted. Firstly, the high ground of artificial intelligence is in the United States, where the world's top talents in AI and the most advanced AI chips are located. The era of intelligence in the article "AI Talent War: Crazy at the Beginning of the Year, Hesitant at the End of the Year" makes it clear that there is a shortage of AI talent in China, and it is very difficult to attract talent from the United States even with a salary of millions. Why? It's a very practical problem. After working hard to study in the United States, settling down, starting a family, and obtaining a green card, how can one solve the many problems faced when returning to China for development? In the United States, AI research and chip resources are abundant. In China, a project team can often only apply for four to five hundred GPUs as the upper limit of computing power.

In addition, if the direction is wrong, efforts are in vain. Developing SaaS products in China is a pitfall. In July of this year, an article titled "China Doesn't Need SaaS" went viral. Indeed, when an industry has been operating for 8 years and the vast majority of players in the industry still aren't making money, it may be a misallocation of resources. Furthermore, Chinese users are accustomed to freeloading and enjoy getting freebies, with a weak willingness to pay for SaaS products. Liang Wang also stated in a media interview, "Compared to China, the acceptance, willingness to pay, and market size for SaaS in Europe and the United States are much higher."

User is King. Creating a product is only valuable if people use it. Heygen tested user reactions on the Fiverr market before its launch, and there were indeed people willing to pay for it, proving that the product direction is correct. It takes some tricks to transition a product from a small user base to widespread adoption. For example, inviting new users to earn points, adding watermarks to user-generated videos to increase brand exposure, and maintaining rapid product iteration are also important. Most internet companies typically release updates every two weeks, but Heygen releases updates every week. Bugs are inevitable, but not every bug is worth optimizing, and the team should focus on urgent and important matters.

Founders are the Best Product Marketers. In August of this year, Heygen chose to have the company's CEO release the latest product on X, gaining 3 million views and thousands of likes and comments. This product release was very successful, with almost no one realizing that the people in the video were digital. As a result, website visits for Heygen doubled in September.

(Image source: joshua_xu)

(Image source: heygen)

For startups, achieving $1 million in revenue, although not a significant milestone, proves that AIGC is no longer just a concept or a toy, but can be a good business that creates value for users and also makes money.

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