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)
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
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.
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
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
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
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
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