AI-driven Product Discovery: A New Era for Shopping
In the ever-evolving landscape of digital commerce, the role of artificial intelligence (AI) is becoming increasingly significant. With more shoppers turning to AI for product suggestions, retailers are set to witness a dramatic surge in traffic from AI prompts and chatbots, according to a recent report. A notable shift this holiday season is the growing trend of Americans opting for AI-driven product discovery over traditional search methods. source
Brands Adapting to AI-generated Recommendations
For businesses, the challenge lies in figuring out strategies to appear in AI-generated recommendations. The report predicts a staggering 520% increase in AI-generated traffic for retailers by 2025 compared to 2024. This trend has led to the emergence of startups like The Prompting Company, backed by Y Combinator, which aims to help brands get mentioned in AI applications through generative engine optimization (GEO).
The Prompting Company: Pioneering AI-Optimized Marketing
Founded by Kevin Chandra, Michelle Marcelline, and Albert Punama, The Prompting Company has raised $6.5 million in seed funding within just four months of its inception. This startup believes that as AI becomes the primary touchpoint for product discovery, brands must learn to market to AI agents in addition to human users.
Chandra, the co-founder, and CEO of The Prompting Company, emphasizes the need for AI-facing websites. These sites are devoid of navigation bars, pop-ups, and marketing fluff, catering specifically to AI agents which are swiftly becoming the fastest-growing user segment on the internet.
The Prompting Company’s Innovative Platform
At its core, The Prompting Company’s platform operates by identifying and analyzing the questions AI agents are asking. It then creates structured content that answers these questions and guides AI agents to AI-optimized pages. This innovative approach helps companies publish thousands of AI-friendly pages, allowing large language models (LLMs) to cite their answers irrespective of traditional SEO rankings.
From SEO to GEO: A Paradigm Shift
While SEO still holds relevance, Chandra asserts that GEO is rapidly becoming a priority for brands. In GEO, product results surface organically based on relevance to the conversation, as opposed to paid keywords or search rankings. This shift could potentially alter the way people shop, with protocols like Google’s Agent-to-Agent framework and OpenAI’s partnership with Stripe facilitating AI agents to browse and complete purchases on behalf of users.
The Road Ahead for The Prompting Company
Currently, The Prompting Company serves primarily fintech, developer tools, and enterprise SaaS customers. One of the Fortune 10 companies is also a user of its product. The company charges customers based on the number of prompts tracked and pages hosted.
With seed money from Peak XV Partners, Base10, Y Combinator, Firedrop, and various angel investors including Logan Kilpatrick, The Prompting Company aims to scale its platform and partnerships. The startup’s vision aligns with the increasing trend of AI-powered discovery becoming the new distribution channel. The founders, who previously built YC-backed Typedream and Cotter, plan to revolutionize how people discover and purchase products in the AI era.
Arnav Sahu, partner at Peak XV Partners, expresses his excitement about backing The Prompting Company, underscoring the founders’ repeat successes with Y Combinator and their potential to revolutionize product discovery in the AI era.
