DG David George David George On a16z Podcast

“You can produce 10x, 100x more revenue potentially if you nail the next product. … Whereas on the cost side, you can only get so much more efficient and that opportunity will kind of always be there. It's latent. So it's like shorting your own future if you are just focused on the cost side.”

a16z Podcast · Startups & Venture · October 2026

“You can produce 10x, 100x more revenue potentially if you nail the next product. … Whereas on the cost side, you can only get so much more efficient and that opportunity will kind of always be there. It's latent. So it's like shorting your own future if you are just focused on the cost side.” — David George, a16z Podcast

George was describing a question his firm is thinking about: whether companies will put their AI effort into building new products or into making the existing business cheaper to run. He says the best companies right now are focused entirely on the first.

Transcript

a16z Podcast Around 09:45 into the episode
David George

before the big four, five breakthrough routes.

Jack Altman

My guess is if you reran that study, you would not see that anymore. Yeah.

David George

And like the best coders in the world have like fully flipped over on this. And, you know, if you talk to like the CEOs at the cutting edge companies, I think they would tell you that they feel much more productive. Like I, you know, spending time with Stripe, like they feel like there's very high returns to them being able to be a lot more efficient in writing code. You know, like is like Procter and Gamble getting big efficiency gains from what they're spending on AI today? Like probably not yet, but I think they will. They probably need a lot of hand holding. That's probably the answer is, you know, I think the labs and Databricks and Palantir, companies like that are probably thinking about it the right way where you have to do a lot of handholding to produce value, but you will produce a lot of value for the Those companies. And then there's companies like Stripe. I don't know. One of the things that we're thinking a lot about right now is where is that effort actually going to? Is it going to like front end building more products or is it going to like back end trying to make your business more efficient? And like the best companies in the world right now are singularly focused on front end. Like you can produce 10x, 100x more revenue potentially if you nail the next product. Yes. Right. Whereas like on the cost side, like you can only get so much more efficient and that opportunity will kind of always be there. It's like latent. So it's like shorting your own future if you are just focused on the cost side. Whereas like you're taking an expansive view of what you can become if you're focused on the front end. By the way, the open router

Jack Altman

idea is very good there too, just to be like, we're going to own this at the ALAR as well. Yeah. It's very smart. Yeah.

David George

Yeah. Look. And like, I think they're right that the economy is going to like oscillate between using dollars and tokens and like it's going to be a new form of currency. Totally. You know, so yeah, we're obviously, you know, we're big fans of those guys. Also to the point

Jack Altman

of like, it's all going to work. You know, it's, you know, we talk about open source a lot in relation to the frontier labs. And I guess the point there is if the, if the total token, you know, usage just goes up by 100x, it's just like these things are all going to get so big. They're

Speaker names from our own diarization · position estimated from where the line sits in the episode

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