In a fast-paced, insightful dialogue with Kevin Rose, a16z’s General Partner Anish Acharya posits that the true frontier of consumer technology, especially in the age of AI, lies not in technical prowess alone, but in a profound understanding of human emotion and the courage to build “weird and working” products. Acharya spoke with Rose, Partner at True Ventures, about the resurgence of consumer tech, the evolving landscape of venture capital, and the critical role of creativity in an AI-driven world. Their conversation, spanning an hour and a half, delved into the nuanced interplay between technological advancement and human experience, highlighting how AI has injected new life into a once-stagnant consumer sector.
Acharya believes that AI has sparked a "renaissance for consumer investing," a sentiment rooted in the observation that consumers are now organically adopting and paying for novel AI products at unprecedented rates. He points to the subscription models of advanced AI chatbots like ChatGPT ($200/month), Google Ultra ($250/month), and Grok ($300/month), noting that users are "actually paying that amount." This willingness to pay, he argues, signals a significant shift from the previous five years, which he found "relatively boring" for consumer investors. The current landscape is ripe for innovation, as consumers are eager for products that extend beyond mere utility, venturing into the realm of emotional and subjective experiences.
The core insight woven throughout the discussion is that while large tech companies excel at building powerful foundational models, true consumer innovation will come from startups bold enough to address the "parts of the human experience that Big Tech is not going to be comfortable shipping." Acharya emphasizes that Big Tech's inherent need for consensus and broad appeal often strips products of their "soul," leaving niche but deeply human needs unaddressed. These untapped areas include disagreement, sexuality, persuasion, and companionship. Such categories, he argues, represent "defensible" verticals for startups, as they are inherently resistant to the sanitizing influence of large corporations.
Acharya champions the "weird and working" philosophy for spotting great founders, a concept he attributes to Kevin Rose's own investment acumen. Rose's early backing of companies like Blue Bottle Coffee, which seemed unconventional for a venture investment at the time, exemplified a willingness to embrace the "weird." Acharya recalls, "You did deals like Blue Bottle... And I'm like, Kevin, what is this? A coffee shop with a stand in Hayes? How is this going to be a venture investment?" Yet, these seemingly unusual ventures often tap into profound shifts in human behavior and culture.
The interview also touched upon the potential societal implications of AI companionship, with Rose expressing concern about the models being "very agreeable" and the potential for them to "replace real relationships." Acharya, however, maintains an optimistic outlook, viewing these AI companions as a step forward in addressing a "deep loneliness" prevalent in society. He suggests that while AI conversations might only offer "10% of what a real human would provide you," even that small lift contributes to human progress. He believes humanity is wired to discern the authenticity of interactions, even with AI, and that our "intuition will guide us" to find the right balance between human and AI connections.
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The discussion circled back to the historical context of product innovation, drawing parallels between the nascent stages of AI and the early internet. Rose recounted the genesis of the "like button" at Digg, explaining how the technical limitations of "asynchronous JavaScript" initially made real-time social feedback a novel concept. "It was the first time... that you could actually click a button, send out for a server response and get something back into your browser," he explained. This simple innovation, allowing users to "show my vote of interest on something," laid the groundwork for the social signals that now dominate online interaction. Acharya further highlighted the "weirdness" of early social platforms like Twitter, where the concept of "following" strangers seemed odd at first but quickly became mainstream. This historical perspective reinforces the idea that what seems unconventional today often becomes the norm tomorrow, especially when it addresses fundamental human desires.
The ultimate takeaway is a call to action for founders and investors to look beyond conventional wisdom and embrace the unpredictable. The current era of AI, with its unprecedented capabilities, offers a unique opportunity to build products that resonate deeply with human emotions and experiences, even if they initially appear "weird." This is where true value will be created, not by merely replicating existing models, but by fearlessly exploring the uncharted territories of human-AI interaction.
