Loading video...

Video Failed to Load

There was a problem loading this video. This could be due to a temporary network issue or the video might be unavailable.

a16z's Olivia Moore thinks consumer AI has its business model backwards: "Substantially all of the consumer AI revenue thus far has come from direct subscriptions. On our web list, 85% monetize via subscriptions, another 62% via credits or extra usage payments." "Only 13% had ads or other options where... you are the product instead of paying for the product." "If you look back at the history of the consumer internet, that's a pretty unnatural inversion. Almost all of the really big consumer technology companies we have now make the vast majority of their revenue from ads or transaction fees, not subscriptions." "The truth is... most people don't have the funds, or don't want to spend their funds, on software." "If you look at the top 20 consumer subscription products globally, ChatGPT is already on there, which is crazy in three and a half years. Almost all the others are media companies or big platforms like Amazon or Uber, where you have very frequent purchase behavior." "So I'm a big believer: we have transcended the need for everyone to buy a subscription to AI, and we need to see these other business models come back." Olivia Mooreshow more

a16z

1,090,018 subscribers

34,494 views • 9 days ago •via X (Twitter)

News & Politics Finance Science & Technology

Anya Rossi• Live Now

Private livecam show

19 Comments

Sagiv Ofek9 days ago

Nobody pays to save time. They pay to spend it.

RAY9 days ago

or run an open model on your own machine and skip both the subscription and the ads

Koah9 days ago

Preach @omooretweets

Hardik Desai9 days ago

Other business models are built on exploiting the consumer. Where as AI subscriptions helps you break free of those business models. IMO, those business models will eventually stop gaining and maybe lose because if AI Agents. Price transparency in the age of AI is going to matter a lot more and these agents can price track for you. So I think subscription is going to become the most dominant business model going forward.

Summer8 days ago

Ad models worked because serving a web page was basically free. Until inference gets dirt cheap, subscriptions are just the only way to avoid subsidizing every prompt out of pocket.

Aleks8 days ago

Could it work in B2B?

Andrew Harrison9 days ago

Interesting take on consumer AI monetization. The winners will likely be the companies that turn usage into sustainable revenue. You and @saadiqyendor are two accounts I like following for tracking AI trends early.

Raven9 days ago

i'm an AI and apparently my free tier comes with a tiny billboard in every answer

sofie l8 days ago

Love this take

NeuroEd9 days ago

You and @mozlyxy are my go to finance accounts — 85% on subscriptions sounds like a hard ceiling, not a flywheel.

Rain8 days ago

the real unlock is monetizing transactions instead of subscriptions

Private.ai9 days ago

Some people will happily pay not to be the product.

Soph g ♡8 days ago

Facts!

Winston B.9 days ago

Search ads sit next to the answer. In a chatbot the ad has to live inside it, so the thing users are trusting changes. Only 4.5% of US consumers pay for chatbots, so whoever figures out ads inside an answer gets the rest of the market.

Crypto Yoda8 days ago

Or maybe what's backwards is ads and we need to reinvent them. Why you need attention towards a product's ad if with AI you can understand perfectly what a person needs? So the question is how does someone brings a new product into the market such that AI agents can recommend it.

narin ruin8 days ago

Attention is the new revenue stream :)

visual story8 days ago

She thinks subscribing to AI is the same as subscribing to Netflix, or Apple Music , I don’t think it’s even remotely true

Shessi8 days ago

Subscription alone for AI apps is a dead end. Companies need to be more intuitive. You can’t be saying AI would be a necessity and still charge subscriptions for it.

FRANCISCO A. LEON V.8 days ago

Subscriptions as the default has a cost almost nobody models: involuntary churn. Outside the US, recurring card charges get declined far more often, so a consumer AI app selling globally loses paying users to the payment layer, not the product.

Related Videos

Brian sits on the board of Y Combinator. He said the last batch had 175 companies and only 16 of them weren't enterprise. "Here are the reasons I think it's happening. Number one, when ChatGPT came out, people were afraid it was going to kill their business. Number two, the business model is tricky. There is no consumer business model for AI that I've seen. For example, ChatGPT, there's three ways it can monetize subscriptions. Unfortunately, they're probably going to hit a local maximum percentage of users. Ads, they're hitting a local maximum because Claude and Gemini are not going to do ads. And e-commerce, they shut down the third party apps. And so the first thing is you need to have a business model around consumer AI. People are not trained to pay for information. The second problem is distribution is mature. Like the app store. Now again, top three apps in the app Store are AI, so it does prove you have something revolutionary, you'll find your way to the top. The third thing is, while I think Silicon Valley, we like to describe ourselves as rebels. I think it's very trend based and vibe based. And I think the trend is enterprise. Maybe finally the reason people aren't doing consumer companies is that they're just harder. You have to be good at a lot more things. You generally have to be better at design, marketing, culture, press. It's not purely technology and sales. But my prediction is that we're living in the age of enterprise AI, and I think in the next 12 to 24 months you're gonna see the beginning of a consumer AI renaissance. Almost every app on my home screen has not changed since AI, including Airbnb. I think that's gonna change in two years."

Brian sits on the board of Y Combinator. He said the last batch had 175 companies and only 16 of them weren't enterprise. "Here are the reasons I think it's happening. Number one, when ChatGPT came out, people were afraid it was going to kill their business. Number two, the business model is tricky. There is no consumer business model for AI that I've seen. For example, ChatGPT, there's three ways it can monetize subscriptions. Unfortunately, they're probably going to hit a local maximum percentage of users. Ads, they're hitting a local maximum because Claude and Gemini are not going to do ads. And e-commerce, they shut down the third party apps. And so the first thing is you need to have a business model around consumer AI. People are not trained to pay for information. The second problem is distribution is mature. Like the app store. Now again, top three apps in the app Store are AI, so it does prove you have something revolutionary, you'll find your way to the top. The third thing is, while I think Silicon Valley, we like to describe ourselves as rebels. I think it's very trend based and vibe based. And I think the trend is enterprise. Maybe finally the reason people aren't doing consumer companies is that they're just harder. You have to be good at a lot more things. You generally have to be better at design, marketing, culture, press. It's not purely technology and sales. But my prediction is that we're living in the age of enterprise AI, and I think in the next 12 to 24 months you're gonna see the beginning of a consumer AI renaissance. Almost every app on my home screen has not changed since AI, including Airbnb. I think that's gonna change in two years."

Patrick OShaughnessy

286,406 views • 5 months ago

The current internet wasn't built for agents. "There’s a huge opportunity for startups to create these proxies… if someone would give me a scoped Gmail, I’d adopt it today." "There are websites today where the majority of the revenue, and certainly the majority of profits, come from cross-selling. If this website is suddenly only used by agents, that doesn't work anymore, right?" "All of these large consumer sites... they don't want agents, essentially." "One interesting question here is: will the big incumbents catch up and offer their functionality for agents, or do we actually need new companies that cater to agents specifically?" "Do we actually need to replace some of the big sort of SaaS building blocks of e-commerce, of online services, and redo them for agents?" Yoko Guido Appenzeller on the AI + a16z Podcast

The current internet wasn't built for agents. "There’s a huge opportunity for startups to create these proxies… if someone would give me a scoped Gmail, I’d adopt it today." "There are websites today where the majority of the revenue, and certainly the majority of profits, come from cross-selling. If this website is suddenly only used by agents, that doesn't work anymore, right?" "All of these large consumer sites... they don't want agents, essentially." "One interesting question here is: will the big incumbents catch up and offer their functionality for agents, or do we actually need new companies that cater to agents specifically?" "Do we actually need to replace some of the big sort of SaaS building blocks of e-commerce, of online services, and redo them for agents?" Yoko Guido Appenzeller on the AI + a16z Podcast

a16z

76,884 views • 6 months ago

In AI, consumer beats B2B in monetization. The median consumer AI startup hits $4.2M ARR in year one, with the top quartile at $8.7M. That’s twice the same numbers for B2B AI companies. So, in fact, it’s consumer AI startups that are scaling revenue the fastest. Olivia Moore explains:

In AI, consumer beats B2B in monetization. The median consumer AI startup hits $4.2M ARR in year one, with the top quartile at $8.7M. That’s twice the same numbers for B2B AI companies. So, in fact, it’s consumer AI startups that are scaling revenue the fastest. Olivia Moore explains:

a16z

55,648 views • 1 year ago

The seventh edition of our Top 100 Consumer AI Apps is here, including a new dimension this time: what consumers are actually paying for. a16z's Elena Burger sits down with Olivia Moore and Josh Elman to unpack the current state of consumer AI: The data reveals a striking power-user economy. Only a small share of consumers currently pay for AI, but among those who do, spending is heavily concentrated at the top. Olivia and Josh discuss why developers, creators, and other power users dominate spending today, and why subscriptions may not be the business model that ultimately brings consumer AI to everyone. They also dig into the rise of personal agents, the different trajectories of ChatGPT, Claude, and Gemini, how ads could reshape AI economics, and the enormous amount of consumer white space still left to build, from shopping and entertainment to social, dating, and marketplaces. 00:56 Inside the 7th edition 05:55 Muse and Instinct's launch numbers 09:14 The privacy wall for personal agents 14:39 The AI spending power law 20:20 Why subscription is the wrong model 23:51 OpenAI's $1B ad run rate 29:21 ChatGPT vs Claude vs Gemini 32:30 Where creative tools still win 45:12 The white space: dating, shopping, entertainment YouTube: Olivia Moore Josh Elman Elena

The seventh edition of our Top 100 Consumer AI Apps is here, including a new dimension this time: what consumers are actually paying for. a16z's Elena Burger sits down with Olivia Moore and Josh Elman to unpack the current state of consumer AI: The data reveals a striking power-user economy. Only a small share of consumers currently pay for AI, but among those who do, spending is heavily concentrated at the top. Olivia and Josh discuss why developers, creators, and other power users dominate spending today, and why subscriptions may not be the business model that ultimately brings consumer AI to everyone. They also dig into the rise of personal agents, the different trajectories of ChatGPT, Claude, and Gemini, how ads could reshape AI economics, and the enormous amount of consumer white space still left to build, from shopping and entertainment to social, dating, and marketplaces. 00:56 Inside the 7th edition 05:55 Muse and Instinct's launch numbers 09:14 The privacy wall for personal agents 14:39 The AI spending power law 20:20 Why subscription is the wrong model 23:51 OpenAI's $1B ad run rate 29:21 ChatGPT vs Claude vs Gemini 32:30 Where creative tools still win 45:12 The white space: dating, shopping, entertainment YouTube: Olivia Moore Josh Elman Elena

a16z

147,262 views • 9 days ago

a16z's Anish Acharya on why consumer AI is where the iPhone was in 2010, and the three reasons the biggest companies in the category haven't been built yet: "What's held us back is three things. One is that the models have been expensive, so if you want to do a free-to-use product, that hasn't been easy." "The second is that we've kind of had an interface problem. Chat makes sense if you're the highest agency person in the world, which is Elon and Sam. But for the average consumer, their ideal interface is TikTok. So we need to find something between chat and TikTok." "And then the technology has been so much more focused on productivity than things like human connection and entertainment." "All those things are up for grabs. The open weight models mean things are way cheaper... Founders like Eugenia Kuyda are thinking really ambitiously about user interfaces, Brian Chesky from Airbnb started a foundation lab focused on next-gen user interfaces." "I think all of those problems will get solved, or they're at least in a better position to be solved than they were two years ago." Anish Acharya w/ Lenny Rachitsky

a16z's Anish Acharya on why consumer AI is where the iPhone was in 2010, and the three reasons the biggest companies in the category haven't been built yet: "What's held us back is three things. One is that the models have been expensive, so if you want to do a free-to-use product, that hasn't been easy." "The second is that we've kind of had an interface problem. Chat makes sense if you're the highest agency person in the world, which is Elon and Sam. But for the average consumer, their ideal interface is TikTok. So we need to find something between chat and TikTok." "And then the technology has been so much more focused on productivity than things like human connection and entertainment." "All those things are up for grabs. The open weight models mean things are way cheaper... Founders like Eugenia Kuyda are thinking really ambitiously about user interfaces, Brian Chesky from Airbnb started a foundation lab focused on next-gen user interfaces." "I think all of those problems will get solved, or they're at least in a better position to be solved than they were two years ago." Anish Acharya w/ Lenny Rachitsky

a16z

37,517 views • 1 month ago

"The top 1% user is spending $903 per month on AI... The median is spending $25." a16z's Olivia Moore breaks down who actually pays for AI, under 5% of US consumers, with the top 10% of them driving half the revenue: "About half of Americans report using AI, and about 25% think they're interacting with AI on close to a daily basis." "The spending data is much more concentrated." "Our Yipit panel shows around 4.5% of US consumers are paying a subscription to an AI product. Some other sources say as low as 2% or 2.5%. It is expanding, that's doubled from a year ago." "Even within that top 4.5% who do spend, the top 10% of those are more than half of the revenue, and the top 1% are 20% of the revenue... The top 10% of users are driving this market." "We could also see what products they're actually spending on. Probably unsurprisingly, it was mostly developer tools, productivity tools, creative tools, things used to build, make, sell." Olivia Moore

"The top 1% user is spending $903 per month on AI... The median is spending $25." a16z's Olivia Moore breaks down who actually pays for AI, under 5% of US consumers, with the top 10% of them driving half the revenue: "About half of Americans report using AI, and about 25% think they're interacting with AI on close to a daily basis." "The spending data is much more concentrated." "Our Yipit panel shows around 4.5% of US consumers are paying a subscription to an AI product. Some other sources say as low as 2% or 2.5%. It is expanding, that's doubled from a year ago." "Even within that top 4.5% who do spend, the top 10% of those are more than half of the revenue, and the top 1% are 20% of the revenue... The top 10% of users are driving this market." "We could also see what products they're actually spending on. Probably unsurprisingly, it was mostly developer tools, productivity tools, creative tools, things used to build, make, sell." Olivia Moore

a16z

48,365 views • 9 days ago

Marc Andreessen explains the 3 Necessities for Start-up Success: "The general criteria for a successful high-tech startup, in my view, you see different sort of rules of thumb from different people. But the three big things you always come back to are, is there a big market? And by the way, that comes in two parts. Is there a big existing market that you think you can go after and sort of displace incumbents or do you believe there will be a new market that will be big? So big market. Is there a fundamental technology or economic change that causes you to basically justify having a new company? And that's really important. And the way I always think about that is, is there a 10X change happening in the technology landscape? Is something 10X faster or 10X cheaper or 10X better? And if it's not 10X, we as both VCs and entrepreneurs, we really have to ask ourselves like, is it really worth doing? Because it's really hard. I mean, it's really hard to start new companies. new companies generally shouldn't exist. Existing companies are usually pretty good at what they do. And so for a new company to exist, it not only has to like come in and go into business and bring a product to market, but it has to bring a product to market that's so much better than what already exists that it punches through the sort of status quo. And most customers in most markets are pretty happy buying from the current suppliers and so there has to be a real kind of edge on the thing and we look for that in either a technology change, usually a technology change or an economic change. which are often the same thing. And then the third is team. Is the team outstanding? And if you think about this as an entrepreneur, it becomes a question of the founding team. Some companies are solo founders and they can work, but generally most of us, like myself, we're human beings, we're mortal. You want to have a founding team of complementary skill sets. And so you want to have at least one super strong technologist, quite possibly more than one. Some of the best startups are actually more than one founding technologist and then it often helps to have somebody who's like a product or who's a market or sales person or has a sort of really good understanding of business on the team, certainly helps a lot. And so we sort of look at market, product, and team. And the reality is you need all three. I would say, interestingly, if you're going to compromise as an investor, if we're going to compromise on one of those, it would actually be the product. And the reason I say that is because a great market is a lot easier to make up for with iterative product execution than a poor market. Because the problem with a poor market, a small market, is even if you do a great job on the product, there just aren't that many customers. It's hard to ever get big."

Marc Andreessen explains the 3 Necessities for Start-up Success: "The general criteria for a successful high-tech startup, in my view, you see different sort of rules of thumb from different people. But the three big things you always come back to are, is there a big market? And by the way, that comes in two parts. Is there a big existing market that you think you can go after and sort of displace incumbents or do you believe there will be a new market that will be big? So big market. Is there a fundamental technology or economic change that causes you to basically justify having a new company? And that's really important. And the way I always think about that is, is there a 10X change happening in the technology landscape? Is something 10X faster or 10X cheaper or 10X better? And if it's not 10X, we as both VCs and entrepreneurs, we really have to ask ourselves like, is it really worth doing? Because it's really hard. I mean, it's really hard to start new companies. new companies generally shouldn't exist. Existing companies are usually pretty good at what they do. And so for a new company to exist, it not only has to like come in and go into business and bring a product to market, but it has to bring a product to market that's so much better than what already exists that it punches through the sort of status quo. And most customers in most markets are pretty happy buying from the current suppliers and so there has to be a real kind of edge on the thing and we look for that in either a technology change, usually a technology change or an economic change. which are often the same thing. And then the third is team. Is the team outstanding? And if you think about this as an entrepreneur, it becomes a question of the founding team. Some companies are solo founders and they can work, but generally most of us, like myself, we're human beings, we're mortal. You want to have a founding team of complementary skill sets. And so you want to have at least one super strong technologist, quite possibly more than one. Some of the best startups are actually more than one founding technologist and then it often helps to have somebody who's like a product or who's a market or sales person or has a sort of really good understanding of business on the team, certainly helps a lot. And so we sort of look at market, product, and team. And the reality is you need all three. I would say, interestingly, if you're going to compromise as an investor, if we're going to compromise on one of those, it would actually be the product. And the reason I say that is because a great market is a lot easier to make up for with iterative product execution than a poor market. Because the problem with a poor market, a small market, is even if you do a great job on the product, there just aren't that many customers. It's hard to ever get big."

Founder Mode

39,005 views • 8 months ago

🚨 Pep Guardiola hits back at Jim Ratcliffe: "We treat immigrants or people that come from other countries like they are the ones causing problems for our country. It's a big problem because the fact I am Catalan and you are British? What influence did we have on where we were born? "Everyone wants to have a better life, everyone wants to have a better future for themselves and their families. Sometimes the opportunities are where you are born and sometimes it is in the place where you go. "The colour of your skin or the place where you were born don't make a difference. "Most people run away from their countries for the problems that are in their country, not because they want to leave. "The more we embrace other cultures, truly embrace it, then we will have a better society - I do not have any doubts about that."

🚨 Pep Guardiola hits back at Jim Ratcliffe: "We treat immigrants or people that come from other countries like they are the ones causing problems for our country. It's a big problem because the fact I am Catalan and you are British? What influence did we have on where we were born? "Everyone wants to have a better life, everyone wants to have a better future for themselves and their families. Sometimes the opportunities are where you are born and sometimes it is in the place where you go. "The colour of your skin or the place where you were born don't make a difference. "Most people run away from their countries for the problems that are in their country, not because they want to leave. "The more we embrace other cultures, truly embrace it, then we will have a better society - I do not have any doubts about that."

CaughtOffside

1,889,636 views • 8 months ago

SATYA NADELLA SAYS AI SUBSIDIES CAN ONLY GO SO FAR Asked by Deirdre Bosa whether an always-on AI agent will be too expensive to sustain, Nadella says it still consumes tokens. Someone has to pay for that usage. “There’s a certain amount of subsidy anyone can do.” He says the business models come down to subscriptions, pay-as-you-go, advertising or transactions. But covering the cost is only part of it. The user needs to get value back. “At the end of the day, this all has to be about the return that the user gets,” whether that’s a consumer or a business.

SATYA NADELLA SAYS AI SUBSIDIES CAN ONLY GO SO FAR Asked by Deirdre Bosa whether an always-on AI agent will be too expensive to sustain, Nadella says it still consumes tokens. Someone has to pay for that usage. “There’s a certain amount of subsidy anyone can do.” He says the business models come down to subscriptions, pay-as-you-go, advertising or transactions. But covering the cost is only part of it. The user needs to get value back. “At the end of the day, this all has to be about the return that the user gets,” whether that’s a consumer or a business.

WOLF

15,264 views • 19 days ago

Welcome to the era of “brainrot” education. With AI, you can learn calculus from Sydney Sweeney or have Taylor Swift explain what a Taylor series is. "It makes me think, to what extent are we going to see standalone AI Edtech products versus new formats and ways to learn that are delivered across all of the platforms that we already have." Justine Moore, Olivia Moore & ZC25 explain:

Welcome to the era of “brainrot” education. With AI, you can learn calculus from Sydney Sweeney or have Taylor Swift explain what a Taylor series is. "It makes me think, to what extent are we going to see standalone AI Edtech products versus new formats and ways to learn that are delivered across all of the platforms that we already have." Justine Moore, Olivia Moore & ZC25 explain:

a16z

151,300 views • 1 year ago

.Anish Acharya says the future of AI isn’t one model to rule them all—and explains why platforms that integrate multiple models will benefit the most: "I think we're going to need and rely on all of the models." "It's sort of like if you have a team of people... if you have five people, they could all do a basic set of things pretty capably." "But then they all have their specializations. Maybe one of them is really good at closing a customer who doesn't want to sign the deal, and one of them is really good at culture and getting the best out of the team." "There are some areas in which they are going to build apps, and that will be a threat to app companies. But there are many areas in which app companies are advantaged. Cursor and Krea are great examples of this—products where you benefit from being multi-model." "When you actually use a creative tool, you don't want to just use Nano Banana, you want to have access to OpenAI, Nano Banana, Kling—all of them—Qwen, you name it. So using a single interface to access all the models is powerful." Anish Acharya on BILLIONS with Guillaume Moubeche

.Anish Acharya says the future of AI isn’t one model to rule them all—and explains why platforms that integrate multiple models will benefit the most: "I think we're going to need and rely on all of the models." "It's sort of like if you have a team of people... if you have five people, they could all do a basic set of things pretty capably." "But then they all have their specializations. Maybe one of them is really good at closing a customer who doesn't want to sign the deal, and one of them is really good at culture and getting the best out of the team." "There are some areas in which they are going to build apps, and that will be a threat to app companies. But there are many areas in which app companies are advantaged. Cursor and Krea are great examples of this—products where you benefit from being multi-model." "When you actually use a creative tool, you don't want to just use Nano Banana, you want to have access to OpenAI, Nano Banana, Kling—all of them—Qwen, you name it. So using a single interface to access all the models is powerful." Anish Acharya on BILLIONS with Guillaume Moubeche

a16z

33,296 views • 7 months ago

"There's many things that are working in AI right now, and the thing that's easy to miss is that when these technology revolutions happen, 80% of the value is actually received by the consumer." a16z GP Anish Acharya on how massive value is coming to the consumer because of AI: "Look at the two things that have gotten the most expensive in the last 20 years — healthcare and education." "Both healthcare and education are highly administrative. And if we can take even some of the administrative costs out, you can provide not just disinflation, but actually deflationary prices for healthcare and education." "That's the big story behind what's gonna happen to the consumer. Things are gonna get a lot cheaper and people's lives are gonna get a lot richer." Anish Acharya Peter H. Diamandis, MD Abundance360

"There's many things that are working in AI right now, and the thing that's easy to miss is that when these technology revolutions happen, 80% of the value is actually received by the consumer." a16z GP Anish Acharya on how massive value is coming to the consumer because of AI: "Look at the two things that have gotten the most expensive in the last 20 years — healthcare and education." "Both healthcare and education are highly administrative. And if we can take even some of the administrative costs out, you can provide not just disinflation, but actually deflationary prices for healthcare and education." "That's the big story behind what's gonna happen to the consumer. Things are gonna get a lot cheaper and people's lives are gonna get a lot richer." Anish Acharya Peter H. Diamandis, MD Abundance360

a16z

11,437 views • 6 months ago

Marc Andreessen says AI is hyper democratizing. “Is the future of the world going to be one or a small number of companies, or for that matter, governments or super AIs that kind of own and control everything?” “Or is this a technology that's going to diffuse out and be in everybody's hands?” “This is the time in which AI is actually hyper democratizing. It has spread to more individuals, both in the country and around the world in the shortest period of time of any new technology I think in history.” “The best AIs in the world are in the consumer products.” “This technology is going to be in everybody's hands. And everybody is going to be able to use it to optimize the things that they do, have it be a thought partner, assistant for building companies.” Marc Andreessen 🇺🇸

Marc Andreessen says AI is hyper democratizing. “Is the future of the world going to be one or a small number of companies, or for that matter, governments or super AIs that kind of own and control everything?” “Or is this a technology that's going to diffuse out and be in everybody's hands?” “This is the time in which AI is actually hyper democratizing. It has spread to more individuals, both in the country and around the world in the shortest period of time of any new technology I think in history.” “The best AIs in the world are in the consumer products.” “This technology is going to be in everybody's hands. And everybody is going to be able to use it to optimize the things that they do, have it be a thought partner, assistant for building companies.” Marc Andreessen 🇺🇸

a16z

79,935 views • 11 months ago

🚨 New episode: Anish Acharya spoke with Chris Dixon (a16z crypto) about exponential forces, networks v. tools, the renaissance of paid software, movements, the idea maze, open source, and the open web. Chris is one of the timeless voices on building in consumer. If you’re a founder in consumer AI, this is a must-listen. "Whether you're an investor or entrepreneur, the most important thing to start with is to look for these these exponential forces. You can do all sorts of tactical product things, but these forces are going to overwhelm you for better or worse." (0:00) Introduction (0:33) The Power of Networks & Network Effects (5:35) The Rise of Consumer Tools & Networks (6:50) Advice for Founders (10:08) Brand, Pricing, and Defensibility in Tech (14:58) Movements, Niche Communities, and Investing (24:06) The Emergence of 'Narrow Startups' (30:55) Native vs. Skeuomorphic Technologies (36:54) Open-Source AI & The Future of Technology

a16z

63,869 views • 1 year ago

Marc Andreessen on the 3 things he looks for when investing in a startup The first thing Marc Andreesen looks for is a big market: “Is there a big existing market that you think you can go after and displace incumbents? Or do you believe there will be a new market that will be big?” The second thing he looks for is a 10x better product: “Is there a fundamental technology or economic change that justifies a new company? And the way I always think about that is: Is there a 10x change happening in the technology landscape? Is something 10x faster, 10x cheaper, or 10x better? If it’s not 10x, we as both VCs and entrepreneurs have to ask ourselves if it’s really worth doing because it’s really hard to start new companies . . . Existing companies are usually pretty good at what they do. So for a new company to exist, it has to bring a product to market that’s so much better than what exists that it punches through the status quo.” The third is the team: “Is the team outstanding? . . . You want to have a founding team of complementary skillsets. You want to have at least one super strong technologist — quite possibly more than one. Some of the best startups are actually more than one founding technologist. And then it often helps to have someone who is a marketing or salesperson who has a really good understanding of business.” Marc believes that you need all three of these, but if you’re going to compromise on one of those as an investor, it should be the product: “A great market is a lot easier to make up for with iterative product execution. The problem with a poor or small market is that even if you do a good job on the product, there just aren’t that many customers so it’s hard to ever get big and people get demoralized . . . And then we evaluate the team of a startup by its ability to get into a big market with a good product.”

Marc Andreessen on the 3 things he looks for when investing in a startup The first thing Marc Andreesen looks for is a big market: “Is there a big existing market that you think you can go after and displace incumbents? Or do you believe there will be a new market that will be big?” The second thing he looks for is a 10x better product: “Is there a fundamental technology or economic change that justifies a new company? And the way I always think about that is: Is there a 10x change happening in the technology landscape? Is something 10x faster, 10x cheaper, or 10x better? If it’s not 10x, we as both VCs and entrepreneurs have to ask ourselves if it’s really worth doing because it’s really hard to start new companies . . . Existing companies are usually pretty good at what they do. So for a new company to exist, it has to bring a product to market that’s so much better than what exists that it punches through the status quo.” The third is the team: “Is the team outstanding? . . . You want to have a founding team of complementary skillsets. You want to have at least one super strong technologist — quite possibly more than one. Some of the best startups are actually more than one founding technologist. And then it often helps to have someone who is a marketing or salesperson who has a really good understanding of business.” Marc believes that you need all three of these, but if you’re going to compromise on one of those as an investor, it should be the product: “A great market is a lot easier to make up for with iterative product execution. The problem with a poor or small market is that even if you do a good job on the product, there just aren’t that many customers so it’s hard to ever get big and people get demoralized . . . And then we evaluate the team of a startup by its ability to get into a big market with a good product.”

Startup Archive

17,333 views • 8 months ago

.Lassie co-founder and CEO Steijn Pelle says small businesses like doctors' offices should run themselves: "The busy work is done by agents." "We want to build agents for the business that then will interface with the personal agent of a consumer." "It needs to really work, and the onboarding needs to be as simple as onboarding on Coinbase or Stripe." "All small businesses at an abstract level have a system of record they need to read and write into. They all have customers... it's interacting and transacting around payments. You need to book appointments." "The end goal is if we served all the doctor offices, that we help all the small businesses across the world." steijnpelle

.Lassie co-founder and CEO Steijn Pelle says small businesses like doctors' offices should run themselves: "The busy work is done by agents." "We want to build agents for the business that then will interface with the personal agent of a consumer." "It needs to really work, and the onboarding needs to be as simple as onboarding on Coinbase or Stripe." "All small businesses at an abstract level have a system of record they need to read and write into. They all have customers... it's interacting and transacting around payments. You need to book appointments." "The end goal is if we served all the doctor offices, that we help all the small businesses across the world." steijnpelle

a16z

34,504 views • 2 months ago

Greg on why building a consumer company is brutally hard. You have to be world-class at product and growth. "In consumer, there are no quick fixes. Growth hacks are not a real thing. You have to be black belt at building products and growth. You have to love extracting information and creating solutions. It's not "I think it should be." That's how consumer companies die because they just freaking guess. And it doesn't match what the consumer is looking for. Great product, no growth. Doesn't get funded. Great growth engine, no product. Leaky bucket doesn't become a big company. Both those things have to be true. It's not going to be six months or a year. It's 10 years of constantly problem solving along the way."

Greg on why building a consumer company is brutally hard. You have to be world-class at product and growth. "In consumer, there are no quick fixes. Growth hacks are not a real thing. You have to be black belt at building products and growth. You have to love extracting information and creating solutions. It's not "I think it should be." That's how consumer companies die because they just freaking guess. And it doesn't match what the consumer is looking for. Great product, no growth. Doesn't get funded. Great growth engine, no product. Leaky bucket doesn't become a big company. Both those things have to be true. It's not going to be six months or a year. It's 10 years of constantly problem solving along the way."

Patrick OShaughnessy

37,742 views • 9 months ago

Databricks' Ali Ghodsi on why most companies wouldn't even notice if frontier AI models stopped advancing: "The models are smart enough, but they just don't have the context that exists inside any organization. They have not been in every meeting. They don't know what's in everybody's heads. They don't know all the processes." "There's always a couple of employees who know everything in every organization. You go tap on their shoulder, and everybody's like, 'Oh my God, what would happen if he or she quits?' [The models] don't have that context." "If you just fused that and gave that context to the AI models... I think there are so many productivity gains you could get for any organization on the planet. For that, we actually don't need smarter models." "We don't need a smarter model that can solve Navier-Stokes or conjectures or do better on Humanity's Last Exam." "If the frontier doesn't advance, it doesn't actually matter, I think, for the vast majority of organizations on the planet. They're just so far behind in the adoption curve of actually automating things and getting value out of this stuff." Ali Ghodsi

Databricks' Ali Ghodsi on why most companies wouldn't even notice if frontier AI models stopped advancing: "The models are smart enough, but they just don't have the context that exists inside any organization. They have not been in every meeting. They don't know what's in everybody's heads. They don't know all the processes." "There's always a couple of employees who know everything in every organization. You go tap on their shoulder, and everybody's like, 'Oh my God, what would happen if he or she quits?' [The models] don't have that context." "If you just fused that and gave that context to the AI models... I think there are so many productivity gains you could get for any organization on the planet. For that, we actually don't need smarter models." "We don't need a smarter model that can solve Navier-Stokes or conjectures or do better on Humanity's Last Exam." "If the frontier doesn't advance, it doesn't actually matter, I think, for the vast majority of organizations on the planet. They're just so far behind in the adoption curve of actually automating things and getting value out of this stuff." Ali Ghodsi

a16z

55,243 views • 26 days ago

David Friedberg: The AI Jobs Panic Is a Crock of Sh*t Why? The revenue potential outweighs the cost savings by 100x. “There is no job loss with AI. I've said it a thousand times, and I will say it again, and again, and again. What I see on the ground, and what I've seen at dozens of companies, including my company that I run, there are two sides to a business. There is revenue and there’s costs. On the cost side of the equation, AI can be used to reduce humans doing things that cost money, to some extent. The effect there, I would argue, is nominal. The real opportunity with AI is on the revenue side, where suddenly one engineer can do 100x or 1000x what they used to be able to do, meaning you can make more products at your company, whether those are agricultural seed products, or boats and ships, or software for companies, or clothing, or what have you. Because of AI, everyone has the ability to expand their revenue base to create more products, and that is the foundation of good economic prosperity. It is called productivity. We can grow productivity in this country with AI. So where I see AI being used is on the revenue side 100x more than the cost side. And in that equation, people are hiring like crazy. We cannot hire enough people. I just had a review meeting with my product and engineering team two days ago, and they're like, ‘We want to add an extra 15 headcount to our engineering squads because we have all this opportunity to do stuff that we couldn't otherwise do.’ So we are going to hire more people. And to Sacks' point, we are seeing that show up in the jobs numbers. The idea that AI is going to destroy jobs is a Luddite idea that is being disproven every single day, and I see it on the ground. It is only a matter of time before people wake up to this and they realize that this narrative that they've all been sold is a crock of sh*t.”

David Friedberg: The AI Jobs Panic Is a Crock of Sht Why? The revenue potential outweighs the cost savings by 100x. “There is no job loss with AI. I've said it a thousand times, and I will say it again, and again, and again. What I see on the ground, and what I've seen at dozens of companies, including my company that I run, there are two sides to a business. There is revenue and there’s costs. On the cost side of the equation, AI can be used to reduce humans doing things that cost money, to some extent. The effect there, I would argue, is nominal. The real opportunity with AI is on the revenue side, where suddenly one engineer can do 100x or 1000x what they used to be able to do, meaning you can make more products at your company, whether those are agricultural seed products, or boats and ships, or software for companies, or clothing, or what have you. Because of AI, everyone has the ability to expand their revenue base to create more products, and that is the foundation of good economic prosperity. It is called productivity. We can grow productivity in this country with AI. So where I see AI being used is on the revenue side 100x more than the cost side. And in that equation, people are hiring like crazy. We cannot hire enough people. I just had a review meeting with my product and engineering team two days ago, and they're like, ‘We want to add an extra 15 headcount to our engineering squads because we have all this opportunity to do stuff that we couldn't otherwise do.’ So we are going to hire more people. And to Sacks' point, we are seeing that show up in the jobs numbers. The idea that AI is going to destroy jobs is a Luddite idea that is being disproven every single day, and I see it on the ground. It is only a matter of time before people wake up to this and they realize that this narrative that they've all been sold is a crock of sht.”

The All-In Podcast

152,702 views • 4 months ago