Kapwing's founder shares a candid postmortem on Tess.Design, an AI image marketplace that paid artists 50% royalties when their fine-tuned style models were used. Launched May 2024 and shut down January 2026, Tess generated only $12,172 in gross revenue against $18,000 in artist advances. Key lessons: artist supply is extremely hard to build one-by-one due to ideological opposition and brand dilution fears; unresolved AI copyright litigation blocked enterprise deals; the 2024 cultural climate was maximally hostile to AI among creatives; and running a side project split focus from the core Kapwing product. The author argues the underlying royalty-based AI licensing model isn't dead, just early, and advises future founders on creator adoption challenges, brand controls, and timing.
Table of contents
The Problem We Were SolvingHow the Business Model WorkedWhat 325 Cold Emails to Artists Taught UsThe NumbersWhy we shut it downWhat This Means for Entrepreneurs Building AI Licensing ModelsClosing ThoughtsSort: