# Read this before you build another AI wrapper > This company announced that they raised $7.5 million just two months ago. Today they are no more. - **Author**: Ferran Sulaiman - **Published**: 2026-11-07 - **URL**: https://ferran.sh/writing/read-this-before-you-build-another-ai-wrapper --- This company announced that they raised $7.5 million just two months ago. Today they are no more. Ollie.ai was an AI assistant for running a household. Families used it to handle everyday admin. That usually means juggling several apps, like keeping track of family schedules, planning meals, making sure your kids did their homework, booking doctor appointments, and paying bills.

People would use it just through iMessage or you could add it to your family group chat. Anyone in the group chat could ask Ollie to plan dinner or book something and it went to everyone's calendars correctly. In August 2025 Ollie had around 50,000 families using it before it shut down on November 6, 2026. Ollie's founder pointed to competition from Muse, Instinct and others, saying it made differentiation, growth and fundraising harder.

This goes on to illustrate a larger point where it's becoming increasingly difficult to compete against heavily funded free consumer AI products. Engraved illustration of an open wallet with one slot for a subscription

Engraved illustration of an open wallet with one slot for a subscription

## That $20-$30 slot Much like how hard it is to compete for usable app real estate on our smartphones, it is now becoming increasingly hard to compete for the $20-$30 slot in your usep's monthly budget. An NBER paper that was published recently came up with a very interesting insight: only 2.9% of US consumers pay for an AI subscription. This sneaky little insight means we can group our users into three categories: 1. Power users who use AI for daily work and they probably work in AI. 2. Non-technical optimists who use AI as a way to get their work done better. 3. Average consumer who use AI as a Q&A system or, if they want to, use it as a Google search replacement. Three concentric rings showing illustrative shares: power users 10%, non-technical optimists 40%, casual Q&A users about 50%

Three concentric rings showing illustrative shares: power users 10%, non-technical optimists 40%, casual Q&A users about 50%

All of this to say that the paying pool is really small. The average consumer only cares about having an AI assistant (not an agent) which can pull things up when they need it and can answer any question that they might have. ## AI is just AI The average consumer only knows about the major players: ChatGPT, Claude, and Gemini too for that matter. Most of them see AI assistants as interchangeable because they don't care about whether Claude is better at tool calling than the GPT models or whether Gemini flash decimate the competition when it comes to cost. All they need is an AI assistant that answers their questions. And not just that, you have the slew of free AI assistants subsidized by big VC, like Instinct. Instinct is interesting because it does not charge its users anything and they do not intend to, according to recent interviews. They're raising more money to subsidize this product further. ## How would they make money, you ask? How would they make money, you ask? They (will) make money through a transaction take rate that the seller pays. Today, according to Shinn (the CEO), over $1 billion (annualized) worth of transactions go through Instinct. This includes booking flights, booking hotels, and even buying things from online e-commerce stores. I say they "will" because they haven't started charging the seller side just yet. ## You need to go more vertical This is not to say that no product could compete with the big labs or VC-funded options.

You need to get creative. You need to go more vertical. Make sure that none of these apps can serve your ICP as well as you can. You'll have to solve a problem so specific and showcase it just the right way so that people get what you're trying to solve and choose you over any of these other apps immediately. Or maybe you become an additional slot that they make peace with paying for. It is tough but it's definitely doable. ## This doesn't mean subscriptions are bad. This doesn't mean subscriptions are bad. Subscriptions can work only when the product solves a recurring problem well enough. Besides there's a bunch of other ways to collect payment for the value provided that aren't through a monthly sub. 1. **Transaction take rate**: Your product is free to use and you keep a small cut of the transactions that go through your app. This is what Instinct intends to do. 2. **Ads**: ChatGPT proved that ads can work in AI tools. ChatGPT ads have already surpassed a $1 billion annual rate. 3. **Platform fees**: You can charge businesses for being on your platform. This is slightly different than a take rate because that focuses more on volume and this just focuses on the businesses being on your platform. 4. **Usage-based pricing**: Pay-per-use instead of a flat monthly/yearly fee. A light user can pay for occasional use without committing to a monthly bill. Diagrams of four payment flows: take rate, ads, platform fees, usage-based pricing

Diagrams of four payment flows: take rate, ads, platform fees, usage-based pricing

Your product needs to solve a problem that's painful enough for you to deserve a slot in your user's monthly budget. So ask yourself, **do you really deserve those $20?** --- This is something I'm thinking about while building https://zeke.so - If you thought that was interesting, check it out! --- - [All articles](https://ferran.sh/writing)