Things Olivia Says on Podcasts

We talked about this a little bit in this report in terms of areas where we have not yet seen AI-native startups pop up or categories where we haven't. Eugenia, who's one of our portfolio CEOs, runs a company called Wabi, which is fantastic. She has this great quote. I'm probably going to botch it, but it's something like people, most people aren't looking to save time. They're looking for ways to spend their time. Like, this is why social media, entertainment, Netflix, TikTok, all of these, YouTube are so the most used consumer products that we have. And I think that much of what we've seen in AI thus far, to your point, is like, how do I do this thing a little bit faster, a little bit easier, a little bit more impressively? And that's not an incredibly compelling daily or hourly active value proposition for most people.

No, I think, I think this, you know, saving time is still very hyper-productivity, people who are focused on work or being creative. But I'm also seeing this next wave of people who are maybe used to be coders. They're no longer maybe people who want to make videos, but never quite mastered the Pro Tools and Adobe Premiere or something else, where they're all of a sudden able to sign up for these things and take the ideas in their head and make them happen. So I do think we're starting to see these rise up. And again, as I look at all these numbers, as we're still so early, and the fact that we're even here. And that we're talking about how big some of these companies are and that 1% of people are spending $900 a month. I see these as harbingers of what's to come as more people feel empowered, as more people feel like they can create where it doesn't, it's not necessarily about saving time. It's about spending the joy of actually wheeling this thing into reality. There were all these jokes of, oh, when people were in this, like the peak phase of everybody was using their open cloth for the first time, their agents, they'd walked around with their computers and their laptops. They had to keep them open. And they were like, I'm not sleeping. I'm coding and I'm making things more than I ever have. And I think that's starting to, again, shows up at the top of the data, but I do think it's starting to show up sort of everywhere. Yes.

We're still at the early days of inference costs coming down. We're still at the early days of people finding ways to run lower cost models to build great products. And as they do that, a lot of the other business models that have always been on the internet from transaction fees and ads will finally start working. But we need that to happen. And that's, I think, where we're still, there's so much learning and so much that like, well, if it's going to cost me a lot to serve, at least let me just charge money so that people pay for it became sort of an early default.

Yes. I mean, you can probably speak to this from seeing many prior eras of the consumer internet, but like it used to be, at least for me as a consumer investor, if a company was making money in the first five years, it was like, whoa, what's happening? The rule was like, let's build density of users. And because they cost near zero to serve, we can then wait and make money via ads or start charging for transactions once we have liquidity and density. And that just isn't the case given how high cogs are.

No, I think this cost thing is a really interesting challenge. And companies get afraid of growing too fast. Yeah. Like they actually, if they grow too fast and they don't have meters on how they're charging for it, you can actually have out of control spend that can be very, very hard to manage. So, you know, it's created this very different shape of what we see in the top apps and the top 100, you know, traffic and everything right now. But again, this is again, wow, still so early. Yeah. There's so much to build and learn and bring costs down and bring value up and introduce advertising and introduce other ways to spend money. And by the way, if it is, we subscribe to these services we love and that's actually what we get continual value from, that's amazing too.

when we talk to some agent or assistant products that are aimed towards the more mainstream consumer, they're seeing costs in the tens of dollars, not the thousands of dollars a month. So I think that is maybe a representation of the fact that we have a very long way to go in terms of consumers getting comfortable with these products.

And I think, you know, I think people who've been coding and have been working with AI, I mean, it's been such an incredible enhancer. And that shows up in a lot of the data on the top 100 here. Like it's incredible. And then we've, people who've been able to do that have had these great ideas for all the other things in their life. But when you just hand this to somebody new, it feels like a blank box. And it feels like, what should I do with this? And maybe there's examples of getting a reservation or booking a flight. But if you're not actively seeking a reservation or booking a flight, it's hard to figure out how to personalize it. And so much of what we do as people is we learn from others and we get these great ideas and we try the other things people tell us. So much of how social media has worked is people put things on social media and other people see that and they try the same thing. And then it kind of spawns these effects. Oh, I try, they make a little riff on it. And then those riffs become, you know, cascading snowballs. And that's how great ideas flourish. And with AI, because so much of it's so personal, we haven't even seen any of that flourishing yet, you know, outside of areas like coding and productivity, you know, all of the creative work. You know, I created this incredible video and how'd you do that? I use AI. You know, there's so many tools that do that that are, you know, been growing and are here. But it's so interesting that, you know, now we have to figure out how to mainstream this for not the millions and millions of people who are using these and paying and everything, but for the You know, tens, hundreds, and you know, hundreds and hundreds of millions.

all of this is within the only 4.5% that are spending at all.

Yibit also was helpful for us because we could see what products are they actually spending on, like, on a personal basis. And probably unsurprisingly, it was mostly developer tools, productivity tools, creative tools, things used to like build, make, sell things like N8N, Granola, Higgsfield, Manus, those all were way overrepresented amongst the top spenders. I

mean, in a way, this is actually really cool. I mean, even though these numbers aren't everybody yet, like we're enabling this whole new generation of makers of people who are, you know, not just using this for work, but actually using their personal credit cards to code things they never coded before, to make art, make videos, make content, and really have this power of making. And so it's actually in some ways, you know, while it's all still so early, it's actually really cool how much making is going on that people are actually so excited they're willing to spend. I mean, if you're spending $900 a month on a set of AI tools, you're really using that to like hopefully make things faster, better, have more ideas in your head coming to life than ever before. Yeah. So that's kind of like when I, when I was looking at these categories between creativity and coding, like, you know, that's actually hopefully really, really powerful. Yeah.