Summary of A16z Podcast Episode: 2023 Tech Trends: Insights from a16z Podcast with Steph Smith
Podcast: A16z
8 min. read
— Description —
Discover how social platforms are transforming product discovery and purchase experiences, while Chinas mobile-only approach accelerates mobile feature innovation Explore the changing landscape of local favorites, the evolution of gaming bots, the importance of self-expression in the digital world, and the advancements in generative AI Gain insights into the significance of AI strategy, the challenges faced by fintech companies, and the timeless importance of distribution.
2023 Tech Trends: Insights from a16z Podcast with Steph Smith
Table of contents
Key Takeaways
Intro
Breakthroughs in Buying – Connie Chan
Unlocking the “Third Place” – Anne Lee Skates
Games As A Never-Ending Turing Test – Jack Soslow
The Metaverse Goes Fashion Forward – Doug McCracken
Generative AI Advances Beyond “Text to Image” to Complex Workflows – Sarah Wang
Embracing Large Language Models While Maintaining Trust – Sumeet Singh
Key Takeaways
- Social platforms will become a natural place for product discovery as platforms will ease the friction between inspiration, purchase intent, and completed purchases
- China is mobile-only, compared to the U.S. which is mobile-first, so China tends to iterate on mobile features much faster than the U.S.
- In 2019, two-thirds of Americans said they had a favorite local place they went to regularly. Four years later, that two-thirds has decreased to one-half.
- Gaming bots have historically been scripted procedures but are increasingly becoming network-based AIs that are more convincing to humans
- Multiplayer games of the future may consist of perfectly catered AIs specifically designed for each gamer
- Brands will lean into the platforms that enable interoperability across platforms
- Of the group of digital natives, Gen Z, and Gen Alpha, 2 in 5 already believe that self-expression via fashion is more important in the digital world than the physical
- Generative AI will advance beyond “text to image” to more complex workflows, such as “text to SQL queries” or, eventually, “text to excel modeling” and more
- Much of the truly useful data is actually proprietary enterprise data and is not widely available on the internet for AIs to train on
- “If your company does not have an AI strategy, it should really be thinking about one yesterday.” – Sarah Wang
- Fintech companies will need to strike a delicate balance between building with new technology rails while maintaining customer trust
- Regardless of the platform shift, distribution is always key
Intro
- In this episode, various partners at a16z (@a16z) spotlight one big idea that startups in their field could tackle in 2023
- Check out these Podcast Notes on Marc Andreessen
- Host: Steph Smith (@stephsmithio)
Breakthroughs in Buying – Connie Chan
- Connie Chan (@conniechan) is a General Partner at a16z that works in consumer
- Connie’s big idea is around social commerce, discovery commerce, and video commerce
- She sees these trends as inevitable and believes 2023 will be the year that it all becomes obvious
- Connie Chan believes that social platforms will become a natural place for product discovery as platforms will ease the friction between inspiration, purchase intent, and completed purchases
- Whether short-form, long-form, or Livestream, she sees video as a fantastic way to sell things and teach consumers about a product’s value proposition
- Connie predicts that an entirely new ecosystem will emerge where anyone can become a seller, and new companies can help everyday creators curate and sell products and services
- Shopping in the West is still search-based while shopping in the East is more discovery-based
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There is typically a time lag of one year before popular social platform trends in Asia make it over to the United States
- Sometimes the lag can be as high as three to five years
- China is mobile-only, compared to the U.S. which is mobile-first, so China tends to iterate on mobile features much faster than the U.S.
Unlocking the “Third Place” – Anne Lee Skates
- Anne Lee Skates (@anneleeskates) is a consumer partner at a16z
- The “third space” are places that host regular, voluntary, informal, and happily anticipated gatherings outside of home or work
- This space used to be in-real-life gathering spots, but things like remote work and this generation’s natively digital habits, have given way to an online-first era
- Anne is interested in the next generation of tools and platforms that are built to serve consumers, community builders, and creators in the post-Covid, hybrid world
- Perhaps generative AI can create user experiences that facilitate deeper discussions and relationships online between humans
- In 2019, two-thirds of Americans said they had a favorite local place they went to regularly. Four years later, that two-thirds has decreased to one-half.
- Trends in gaming tend to be a few years ahead of trends in consumer
- New modalities of social connection are emerging, beyond just meeting up for dinner or drinks
- There is an opportunity for digital platforms to create products or features that prompt in-person interactions
Games As A Never-Ending Turing Test – Jack Soslow
- Jack Soslow (@jacksoslow) is a games partner at a16z
- Bots have historically been scripted procedures, but are increasingly becoming network-based AIs that are more convincing to humans
- Jack predicts that the next generation of bots will take “human-like” to a whole new level
- The new “don’t believe everything you read on the internet” is “don’t believe everything you read from AI”
- The Turing test is too low of a bar because the test is binary, and it also tests for deception, not a real understanding
- A game is a structured form of play; there are rules involved in playing a game
- Using an aimbot in Call of Duty, for example, tears down the structure of the game because now players in the same game are following different sets of rules
- If it is a structured form of play, then maybe the structure should be built around bots if it is so hard to defend against them
- Adding believable villagers to Minecraft would make the solo experience of playing Minecraft less lonely
- Multiplayer games of the future may consist of perfectly catered AIs specifically designed for each gamer
- Bots should be used to improve the game experience, not make it worse
- In 2023, Jack Soslow is most excited about 3D foundation models for audio and video, and then how they will come together under one roof
The Metaverse Goes Fashion Forward – Doug McCracken
- Doug McCracken (@dougmccracken) is a games partner at a16z
- Consumers will demand interoperability across experiences in the metaverse, so over time brands will favor platforms that enable them to wear their Nike shoes in different games and virtual worlds
- Brands will lean into the platforms that enable interoperability across platforms
- Of the group of digital natives, Gen Z, and Gen Alpha, 2 in 5 already believe that self-expression via fashion is more important in the digital world than the physical
- Of the same group, 3 in 4 say they will spend money on digital fashion
- Brands are slowly realizing the unique marketing opportunities present in these virtual worlds
- Luxury brands have embraced these trends ahead of other brands
- More than half of Fortnite’s revenue comes from cosmetic purchases
- Ready Player Me is a company creating avatars than can exist across many different virtual worlds
- Doug is excited to see new companies emerge that are solely focused on digital fashion
- He is also interested to see how digital content and trends will translate more and more into the physical world
Generative AI Advances Beyond “Text to Image” to Complex Workflows – Sarah Wang
- Sarah Wang (@sarahdingwang) is a general growth partner at a16z
- AI is eating software
- Generative AI will advance beyond “text to image” to more complex workflows, such as “text to SQL queries” or, eventually, “text to excel modeling” and more
- As AI becomes increasingly democratized and underlying models potentially commoditized, applications will need to differentiate on the basis of winning mission-critical workloads, as they did in the last great platform shift in moving from on-prem to cloud
- AI assists human productivity and helps improve it
- AI will help replace mundane and routine parts of workflows
- Much of the truly useful data is actually proprietary enterprise data and is not widely available on the internet for AIs to train on
- Given the capital demands of developing large language models, it is possible for an oligopolistic structure that looks similar to the structure of the big cloud computing platforms
- Companies using OpenAI models can differentiate by owning more of the workflows
- Simply “adding AI to XYZ” is not sticky and not something that captures the attention
- “If your company does not have an AI strategy, it should really be thinking about one yesterday.” – Sarah Wang
Embracing Large Language Models While Maintaining Trust – Sumeet Singh
- Sumet Singh (@sumeet724) is a fintech partner at a16z
- In 2023, fintech companies will need to strike a delicate balance between building with new technology rails while maintaining customer trust
- New technology rails include Large Language Models like GPT-3 and the upcoming GPT-4
- Consumers do not have to directly interface with the AI for it to benefit them; it can be happening in the back-end
- Perhaps future regulation will require disclosures to be made if a given fintech app uses Large Language Models for automation
- Regardless of the platform shift, distribution is always key
- AI is most likely to replace back-office workflows in financial institutions
- It is better to automate 100% of 5% of a workflow than to try to automate 100% of a workflow