In October 2022, Notion cofounders Ivan Zhao and Simon Last were in Cancun for a company offsite when they received a ping from friends who worked at OpenAI. The ask — did they want to preview GPT-4? — was enough to get them to skip all the team-building activities and hole up in their hotel room to play with the new AI model.
Zhao, the CEO, has since taken his productivity app into the buzzy AI future. The generative AI boom, which really took off just a few weeks after they returned from Mexico, proved to be perfect timing for Notion. It had spent several years building a note-taking app that, with the help of several viral TikTok moments, has come to accumulate more than 20 million users. Notion, last valued at $10 billion, had the core tech and an eager user base in place to implement a mature version of the duo’s hotel room GPT-4 hacks.
“It feels kind of lucky. We spent a bunch of years building a text editor and building a relational database. AI was like dropping in a brand new car engine,” Zhao told Forbes from his headquarters in San Francisco’s Mission District, one block away from OpenAI’s main office. “We’re essentially becoming an AI-first company.”
On Tuesday, Notion announced a key step in that evolution: a new chatbot called Q&A that can query information from all the documents and databases stored in a user’s Notion workspace. Ask the bot a question, and it returns an answer with links to the relevant pages where it extracted that information. Cofounder Akshay Kothari told Forbes that Q&A has changed the way he works by surfacing things that otherwise might not have occurred to him. Instead of searching for a specific piece of quarterly planning paperwork, for example, he asks “What are we working on in Q4?” and the chatbot returns a list of 10 documents with summaries about their contents.
If the technology reminds you of ChatGPT or Claude, that may be because it was built on top of OpenAI and Anthropic’s latest models. “We obviously would prefer more companies working on models than less,” Kothari said. “But when we did our tests across these different providers, we found [Claude 2 and GPT-4] to be vastly better.”
Q&A represents the “second phase” of Notion’s grand plan for AI, Zhao said. The first, a writing assistant for generating new text or summarizing existing text in a document, was released in February. Within two weeks of its announcement, 3 million people signed up for the waitlist. By April, 4 million people had used it. Cofounder Akshay Kothari told Forbes that the vast majority of all its users have now “tried” the AI offering, but declined to provide a specific number or disclose how many people are paying for it.
Kothari did share that the proportion of paying customers has shifted from 90% individual users and 10% companies, to about a 50-50 split. That suggests Notion has cleared a hurdle that has troubled some newer startups, most notably Jasper, which soared to a $1.5 billion valuation last summer, but switched up CEOs in September after it struggled to attract enterprise customers. “Companies have realized the power of this,” Kothari said. “I have a feeling Q&A will take us even more into B2B land because it’s a product that’s remarkably useful in a team setting.”
“I was skeptical about whether people were willing to pay, and then actually want to stay, on the paid plan. I’ve been surprised that people are pretty sticky,” Kothari said, referring to sustained usage of the product over time, though again he declined to share specific numbers. He credits this in part to Notion’s existing user base which has been habituated to using its core app: “Having AI integrated where you already work is super critical.”
“Imagine a world where the AI assistant is not only just giving you answers to your questions, but it could even do lightweight tasks for you.”
Notion offers a freemium model for its software, but for now its AI tools are paid-only, owing to the expensive cost of using state-of-the-art AI models like GPT-4 instead of open-source alternatives. “This is the kind of thing we want to just offer to every person out of the box, but just based on where the costs are today, we have to make it paid so that we can pay our bills,” Kothari said. Notion typically charges $10 per month for the AI functionality; he says the company is not losing money on AI.
Notion’s cofounders are relatively tight-lipped about what comes next, but said that they’re working on expanding Q&A to search not just Notion files, but information stored in other work apps like Slack or Zoom as well. A “third phase” is also underway. “Imagine a world where the AI assistant is not only just giving you answers to your questions, but it could even do lightweight tasks for you,” Kothari says, a goal which sounds similar to the AI “agents” that startups like Adept and Imbue are attempting to create. In a broader sense, this puts Notion on a collision course with the likes of Coda, Dropbox or Zoom, which are all vying to pick off some of Google Workspace and Microsoft 365’s market share as the central hub for work.
“Our theory is to give the user incentive to put more and more things in Notion and to plug Notion into the rest of their tool stacks,” Zhao says. “Then, it becomes like a magnet tool.”
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