AI: Consumer wave of AI applications and services ahead. RTZ #627

For over 625 daily posts now I’ve been discussing this AI Tech Wave, as the AI infrastructure and Scaling foundations are built to support countless AI driven mainstream consumer and enterprise focused applications/services coming over this decade. Most in the highly prized Box 6 of the AI tech stack below. And this time a few in the all critical Data box no. 4 below.

There’s a school of thought that mainstream Consumer applications and services have a cycle of its own through the internet tech waves over the last few decades.

My VC friend James Currier has a timely post titled “Consumer is Back, and why it’s been so hard since 2014”:

“Evaluating companies has felt very different in the last twelve months from the prior 11 years because consumer is back. We’re seeing some really interesting consumer companies for the first time in forever. The creativity, the opportunity, the energy. It feels good!”

“No one talks about it, but consumer software startups had been “over” in the West for 11 years. At least if you’re trying to start and build a big company.”

“The reason it’s been so hard is simply that the technology window closed 90%, like it does for all technologies. We detailed technology windows in this essay, which is required reading to understand this essay.”

“If we look at the years when the unicorn consumer software companies were founded, you can see the classic curve of the technology window at work.”

He goes onto to describe the waves of consumer internet companies in this framework:

“At first we got the “database reading” startups of Amazon and Google. The dip you see in the curve in 2000 was due to the macroeconomic business cycle. Then we got the “database writing” startups of LinkedIn, Facebook and Twitter. Then the mobile companies like Uber and Poshmark. Lastly, some laggards like Doordash and Robinhood which could have been started 5+ years earlier but the right teams didn’t get there until late in the consumer technology window, 2013.”

The chart above is interesting of course. I had the opportunity to help many of the companies in that chart from its beginnings in 1993.

One could also make the case to include other consumer internet companies like Roblox, Twitch, and others.

And of course if one widens the filter from just the US, and include China, the picture changes again. With mega consumer application/services companies like Temu and Shein from China that transformed ecommerce business in the US and elsewhere. But those like TikTok which James mentions, are companies from China, and that requires a US/China global framework, which is tough in today’s geopolitical environment. But it still allows the DeepSeeks to be unleashed upon the world, which has both consumer and enterprise open source applications.

I particularly agree with another point that James goes on to make:

“You need to leverage AI. It’s a fantastic wedge that – still today – few startups other than OpenAI have used to discover new consumer behaviors, delights, needs, wants, and loves. It’s still sitting there for you to grab. The technology window for consumer AI is still early with all its openness and creativity.”

I do believe that nascent AI driven technologies of this AI Tech Wave have barely begun to be consumerized.

Most of the AI products to date are around chatbots. And they’re still more focused towards developers than mainstream consumers. And that’s logical because we need the software and hardware building blocks in Boxes 3 to 5 in the AI tech stack above, before we can get to the countless consumer opportunities in Box 6.

That’s what has happened in prior tech waves. And this time, the particular evolution of AI through its developmental levels from chatbots to reasoning to agents on the way to AGI however defined, has to be invented and refined enough to build the mainstream consumer applications and services.

But that’s going to be long in coming. We’re likely to see notable consumer focused companies sooner than later. And this time not just from the US. Stay tuned.

(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)