Companies You Should Care About #6: Outdone – AI that takes the stress out of gift giving.
Welcome to issue #6 of Companies You Should Care About, where we explore interesting companies and founders worth following.
It’s December, which means it ‘tis the season for holiday gifts. That means looking for gifts, comparing gifts, and picking gifts. Then worrying you picked the wrong ones, asking friends for recommendations, searching through gift guides, and in general just not enjoying the whole thing. Ah, holiday gifting stress. A gift that keeps on giving.
As an infamously bad gift giver myself, this is a time of year I’ve come to dread. Don’t get me wrong, I love the holidays and the people I spend them with. I’m just really bad at finding good gifts. Fortunately for me and anyone else with this same problem, there’s new technology here to help.
This week, we’re looking at Outdone—a company using AI to improve how we discover the perfect gift. They’ve recently launched V2 of their product, and it couldn’t have come at a better time. Let’s dive in!
But first, why should you care? TL;DR: Artificial intelligence and machine learning are poised to become two of the most disruptive innovations in human history. While generative imagery and writing are popular usecases, they’re either made for businesses or are more fun than useful. Outdone is using AI to solve a practical consumer problem that impacts all of us: how to pick the perfect gift. And, in doing so, they’ve created an entirely new sales channel for consumer brands.
Quick Stats 🚅
Year founded: 2020
Number of founders: 2
Industry: AI/ML
HQ: New York City
Total funding: Not Available
Annual Revenue: Not Available
Background stuff 📚
Let’s take a brief detour to talk about how much time and money we spend on gifts. During the 2021 winter holidays, Americans spent an average of $879 each for a total of $942 billion in holiday gift purchases. To select those gifts, the average American spent 15 hours shopping. All of which is pretty heartbreaking when you consider more than half the recipients didn’t even like the gifts they received.
And that’s just during 2 months!
When you add up all the time and money spent buying presents for birthdays, anniversaries, and all the other gift-giving occasions throughout the year we collectively spend billions of hours and well over $500 billion on gifts that people don’t even want.
To top it all off, the whole gift-giving experience has gotten so stressful that there are entire articles from therapists just on managing gift-giving stress.
There has to be a better way than all this holly, jolly, folly (sorry! bad puns are the gift no one wants that I keep giving anyway). After all, a great gift is a wonderful thing. It shows someone important to you that you care about them and understand what would make them happy. That’s so nice! Surely we can do better than ties or scarves…or gift cards.
This is where Outdone can make a huge difference.
Founded in 2020 by roommates Jon Nass and Hugh Lagrotteria, Outdone uses artificial intelligence to recommend gifts and brands to their users. And the response so far has been very encouraging.
Here’s co-founder Jon Nass:
“What excites us the most about this business is the fact that our early users are responding as if they’ve been waiting for a product like this to come along. We don’t really need to convince them that this is a product they’d find useful because the problem we’re trying to solve is so ubiquitous.”
How Outdone Works 📊
At the center of Outdone is their AI-powered gift recommendation engine. After entering some basic information about the person you’re shopping for—like their relationship to you, activity preferences, and location—Outdone creates a personalized list of recommended brands and products.
You can also specify a budget range and any preferences to support cause-driven brands that are female-led, sustainable, charitable, or made in the United States.
Powering all of this is a rich pool of consumer data collected by the Outdone team, drawn from co-founder Hugh Lagrotteria's experience in market research for companies like Airtable.
Gift guides have existed for a long, long time, but they were mostly created based on the personal preferences of their authors. By building their platform with actual, proprietary data, Outdone has established a unique competitive advantage.
In the words of Outdone co-founder Jon Nass,
“Our users can shop confidently knowing that each brand and product featured on the site was hand-picked for its quality and reliability. Every recommendation is completely data-driven; we never let ad dollars or brand partnerships influence our gifting guidance.”
And Outdone isn’t just recommending better gifts, it’s doing it in a way that will get better over time. As they gather more data on their customers, Outdone’s recommendation engine will continue to provide better recommendations.
But that’s just the start. Outdone’s founders envision a world where their technology improves every stage of the gifting process.
For example, they recently introduced giftgetter profiles for the people their users frequently shop for and plan on introducing reminders for upcoming birthdays and other special occasions so no one is ever left giftless.
Outdone currently generates revenue from affiliate links in their recommended results, but its founders see that changing as well as the business grows
“We envision Outdone becoming an end-to-end marketplace where users can receive recommendations and order their gifts all within the walls of our site, as opposed to linking out to our partners’ sites like it does now.” – Jon Nass, Co-founder @ Outdone.
Why I’m excited 🤩
Lately, it seems like AI and machine learning are absolutely everywhere. These long-hyped innovations have finally started to see practical adoption—leading to some impressive products and an equal number of impressively hilarious memes. While use cases like Dalle-E 2 and Stable Diffusion have gotten viral attention from consumers, a lot of these products are still in the “looks like a toy” phase of their development.
Meanwhile, Outdone has created a highly practical use case that’s great for their customers—but also great for the brands they recommend.
As a marketer, it isn’t very often that we find an entirely new acquisition channel. But that’s essentially what Outdone is creating. Decision fatigue is a very real thing. As Bo Burnham so beautifully wrote, the internet has given us access to everything all of the time. And picking a purchase in a world of infinite options is exhausting.
With trustworthy AI recommendations to narrow down our choices, it seems likely that more and more consumers will use platforms like Outdone as data-driven personal shoppers.
Jon likens this to the way millions of people currently use NerdWallet or Tripadvisor to narrow down options for credit cards and vacations. In a world driven by AI, Outdone has the potential to become a key sales channel for tens of thousands of consumer brands.
On the other hand 🖖
The artificial intelligence and machine learning space is moving at a blistering pace. Products that would have been groundbreaking just a year or two ago pop up every day. With so many people focusing on AI it’s inevitable that copycats will launch alternative offerings to compete with Outdone.
Will their products be better? Who knows. But if you’re building a product that relies on AI you should expect an arms race with your competition. Outdone has built up a moat with the proprietary research that underpins their tech, but time will tell if that moat can hold.
Go one deeper 🐟
Outdone founders Jon Nass and Hugh Lagrotteria shared more about Outdone in an interview here along with a series of informative updates on IndieHackers. They’ve also been featured in Built In Boston’s Future 5 of Boston Tech and Tech Acute.
🚨Version 2.0 of Outdone is live on Product Hunt. You can view their launch here. If you’re as excited about it as I am, give them an upvote!
Thanks for the great write up, James!