The Exchanges

Q there was a, there was a breakout starting from Facebook, Twitter, Instagram, Snap, WhatsApp, Tinder, TikTok. Every few years there was this sort of new paradigm, this new breakout, and it feels like at some point that just a few years ago that just stopped. Why did it stop or did it stop? Would you reframe how we should think about that? And, um, where do we go from here?

A I would argue probably ChatGPT was a, was a huge consumer, like, outcome and winner in the past few years. And we've also seen a bunch of other ones in, in various other, like, modalities of AI, um, in, like, image and video and, and audio companies like Midjourney and, and 11 Labs and Blackforce Labs, um, now things like Kling and Veo. Um, mo, like, weirdly though, a lot of them don't have the same, like, social or traditional consumer dynamics that you mentioned. I think because AI is still relatively early, and so much of the new products and innovation has been driven by research teams who are, like, so good at training models, but historically have not been amazing at creating the consumer product layer around them. So I think the optimistic view is that the models are now mature enough, and many are available either open source or via API, um, for people to build great, more traditional consumer products on top of them.

AI assessment note: “I would argue probably ChatGPT was a, was a huge consumer, like, outcome and winner”

Q One thing I heard you guys say is that one surprise that you guys, uh, sort of realized was that enterprises are sometimes adopting these, these products first before consumers, which feels different from, from previous era, or maybe not what we expected. What can we say there?

A Yeah, that has been fascinating, and BK and I saw that a lot with 11 Labs, which, um, we, uh, were relatively early. I think we invested, we did the Series A like a month or so after the initial launch, and I think what we saw was first the, um, early adopter consumers got on board, and they were making memes, they were making fun video and audio, they were cloning their own voices, they were doing game mods, um, but then I would argue it hasn't even gone in many cases to the truth True mainstream consumer. Like, it's not yet like every single person in America or most have 11 Labs on their phone or have a subscription, but the company has these massive enterprise contracts and a ton of huge customers across, like, conversational AI, entertainment, tons of different use cases are using 11. And I think we've seen this across a bunch of AI products, which is like, there's an initial consumer virality moment, and then that actually leads to lead generation in, Enterprise sales in a way that we did not see with the last generation of products. Like, enterprise buyers, there's so much of a mandate to have AI now, an AI strategy, and use AI tools, that they're watching places like Twitter and Reddit and all of the AI newsletters, and they're saying, like, hey, this is some random, looks like a random consumer meme product, but I can actually think of a really cool application of that…

AI assessment note: “an initial consumer virality moment, and then that actually leads to lead generation in, Enterprise sales”

Q One thing I heard you guys say is that one surprise that you guys, uh, sort of realized was that enterprises are sometimes adopting these, these products first before consumers, which feels different from, from previous era, or maybe not what we expected. What can we say there?

A Yeah, that has been fascinating, and BK and I saw that a lot with 11 Labs, which, um, we, uh, were relatively early. I think we invested, we did the Series A like a month or so after the initial launch, and I think what we saw was first the, um, early adopter consumers got on board, and they were making memes, they were making fun video and audio, they were cloning their own voices, they were doing game mods, um, but then I would argue it hasn't even gone in many cases to the truth True mainstream consumer. Like, it's not yet like every single person in America or most have 11 Labs on their phone or have a subscription, but the company has these massive enterprise contracts and a ton of huge customers across, like, conversational AI, entertainment, tons of different use cases are using 11. And I think we've seen this across a bunch of AI products, which is like, there's an initial consumer virality moment, and then that actually leads to lead generation in, Enterprise sales in a way that we did not see with the last generation of products. Like, enterprise buyers, there's so much of a mandate to have AI now, an AI strategy, and use AI tools, that they're watching places like Twitter and Reddit and all of the AI newsletters, and they're saying, like, hey, this is some random, looks like a random consumer meme product, but I can actually think of a really cool application of that…

AI assessment note: “consumer virality moment, and then that actually leads to lead generation in, Enterprise sales”

Q Justine, you rattled off a list of products and companies in the beginning of this, this conversation. What I'm curious is, do you think just as examples, are they sort of the MySpace or Friendster? Are we in sort of that era or are they, you know, the list of companies I rattled off that are still relevant, you know, 20 years later, like, where are we right now?

A I mean, I think our hope always is that every big consumer AI company now that we see and love and use all of the products, which, which we all do, sticks around. I think, unfortunately, that's not always going to be the case. Um, I think maybe the interesting differentiation in AI versus the last era of consumer products, or even two eras before, is like, the model layer and the capabilities are still improving. Like, we have really not even, I think in many cases, scratched the surface of what these models can do. I think we've seen that in things like the, the VO three launch, where it's like, you can suddenly have multiple characters talking, you can have native audio, you can do all of these things. Like, all of these modalities, um, I don't know, maybe we could argue about this with the tech's people. The LLMs are more mature, but have the opportunity to just keep improving capabilities as they scale. And I think what we've seen is like, as long as a company stays at what we say is sort of like the technology or the quality frontier, so as, As long as they sort of have a state-of-the-art model, or are integrating one, or something like that, um, they won't become, like, the MySpace, or Friendster, or whatever. Like, they just keep, you fall a little bit behind, you ship the new update, suddenly you're number one again, and you keep moving. The interesting thing now, thoug…

AI assessment note: “they won't become, like, the MySpace, or Friendster, or whatever.”

Q Yeah. Um. A little bit about it. And similarly on Twitter, the, the, the social characters that we, that we follow, the next Kim Kardashian, is that, you know, a real person, or is that AI-generated? Do you, do you have a hypothesis on that?

A I have been thinking about this a lot for a couple years, because I think we all followed Lil Micaela closely. Then we followed some of the, like, K-pop bands that I think were the first to start introducing, like, AI hologram-based type characters. This is sort of tied really closely into photorealistic image and video, because we're now seeing people create these, like, influencers who get a ton of attention and followers, largely because they now look realistic enough that you don't know if they're AI or not, and there's a lot of debate around that. I, I, my take is probably there will be fragmentation into, like, two types of creators or celebrities. One type is like a, a Taylor Swift type where, like, the human experience of it, I think, matters in some ways. Like, a lot of people not only love her song, but, like, resonate with the things that have happened to her in her life, and her, her stories, and her live performances, and, like, all of those things that AI cannot yet replicate. There's another type of celebrity or creator who is more, Like, interest-based, sort of like what we were talking about with ChatGPT talking about, like, Thomas the Tank Engine. It sort of doesn't matter if that person has, like, lived the real human experience or not. It just matters if, like, they can be interesting talking about or sharing content around a certain topic. Um, and so if I h…

AI assessment note: “if I had to guess, we'll still have both.”

Q that's a thing. But one of the things they were saying is that on our list, 11 of the top 50 apps were, were companion apps. So let's reflect on Like, are we just at the beginning of, of, of, of that trend? Is there gonna be all these different vertical companion apps? Like, what is sort of the, the future of, of this? How do we think about that?

A Yeah, we've spent an enormous amount of time in, in, like, every facet of companionship, from the, like, therapy, coaching, friends, all the way to the, like, not-safe-for-work, AI girlfriends. Like, we've, we've looked at basically everything. And interestingly, I think, like, it was probably the first mainstream use case of LLMs. Um, we, we like to joke that, like, literally any chatbot, whether it's, like, your car dealer's customer support or, or whatever, people will, Try to turn into their therapist or their girlfriend. Like, you talk to these companies, and you look at the logs of the chats, and it's like a ton of people just want someone or something to talk to. And the fact that you can now have a computer be talking back in a way that's like immediate, always available, and feels human is just like a massive unlock for so many people who could never get that before or felt like they were just yelling or talking into the, into the void. Um, I would argue we're just at the beginning, especially because the products today Or the products that have existed were largely very horizontal and came from or were exclusively from the base model providers. Like, people were using ChatGPT for all of these things it wasn't designed for. We've already seen a bunch of cases where, like, you know, an individual company can create a personality for a character and embody it in some, li…

AI assessment note: “I would argue we're just at the beginning, especially because the products today”

Q What's going to be sort of the first use case where people are going to be talking to synthetic versions of, of ourselves, like in a, in a sort of consistent, relevant way? Like, why are they going to be talking to sort of AI Justine or AI and these are AI me?

A I mean, we've seen a little bit of that. There's companies like Delphi that sort of create AI clones of people who have, like, a big knowledge base that they can go and reference, and you can, like, get advice or get feedback or things like that. Um, I think, and Brian sort of alluded to this earlier, there's this really interesting question of, like, what if you allow not just, like, thought leaders or experts to have this AI clone that you can talk to via text, voice, maybe even video one day, but what if you unlock that for everybody? Um, I think, like, One of the things we think a lot about in consumerism, there's a lot of people who basically have had some sort of skill or insight or knowledge, whether it's, you know, your friend from high school that's like insanely funny, and you always thought they should have like a comedy cooking show, but like they just never were able to break through or get it. Or, you know, someone, your guidance counselor who had incredible advice. Like, how can we enable those people to essentially scale themselves in a way that they never could before having an An AI clone or an AI persona. Um, I think, like, what we've seen thus far is a lot of that has been either thought leaders or experts, or on the other, like, total other end of the spectrum, like, characters that people already know and like. We saw early versions of that with Character …

AI assessment note: “companies like Delphi that sort of create AI clones of people who have, like, a big knowledge base”

Q Yeah. Um. A little bit about it. And similarly on Twitter, the, the, the social characters that we, that we follow, the next Kim Kardashian, is that, you know, a real person, or is that AI-generated? Do you, do you have a hypothesis on that?

A I have been thinking about this a lot for a couple years, because I think we all followed Lil Micaela closely. Then we followed some of the, like, K-pop bands that I think were the first to start introducing, like, AI hologram-based type characters. This is sort of tied really closely into photorealistic image and video, because we're now seeing people create these, like, influencers who get a ton of attention and followers, largely because they now look realistic enough that you don't know if they're AI or not, and there's a lot of debate around that. I, I, my take is probably there will be fragmentation into, like, two types of creators or celebrities. One type is like a, a Taylor Swift type where, like, the human experience of it, I think, matters in some ways. Like, a lot of people not only love her song, but, like, resonate with the things that have happened to her in her life, and her, her stories, and her live performances, and, like, all of those things that AI cannot yet replicate. There's another type of celebrity or creator who is more, Like, interest-based, sort of like what we were talking about with ChatGPT talking about, like, Thomas the Tank Engine. It sort of doesn't matter if that person has, like, lived the real human experience or not. It just matters if, like, they can be interesting talking about or sharing content around a certain topic. Um, and so if I h…

AI assessment note: “my take is probably there will be fragmentation into, like, two types of creators”

Q What's going to be sort of the first use case where people are going to be talking to synthetic versions of, of ourselves, like in a, in a sort of consistent, relevant way? Like, why are they going to be talking to sort of AI Justine or AI and these are AI me?

A I mean, we've seen a little bit of that. There's companies like Delphi that sort of create AI clones of people who have, like, a big knowledge base that they can go and reference, and you can, like, get advice or get feedback or things like that. Um, I think, and Brian sort of alluded to this earlier, there's this really interesting question of, like, what if you allow not just, like, thought leaders or experts to have this AI clone that you can talk to via text, voice, maybe even video one day, but what if you unlock that for everybody? Um, I think, like, One of the things we think a lot about in consumerism, there's a lot of people who basically have had some sort of skill or insight or knowledge, whether it's, you know, your friend from high school that's like insanely funny, and you always thought they should have like a comedy cooking show, but like they just never were able to break through or get it. Or, you know, someone, your guidance counselor who had incredible advice. Like, how can we enable those people to essentially scale themselves in a way that they never could before having an An AI clone or an AI persona. Um, I think, like, what we've seen thus far is a lot of that has been either thought leaders or experts, or on the other, like, total other end of the spectrum, like, characters that people already know and like. We saw early versions of that with Character …

AI assessment note: “create AI clones of people who have, like, a big knowledge base”

Q Justine, you rattled off a list of products and companies in the beginning of this, this conversation. What I'm curious is, do you think just as examples, are they sort of the MySpace or Friendster? Are we in sort of that era or are they, you know, the list of companies I rattled off that are still relevant, you know, 20 years later, like, where are we right now?

A I mean, I think our hope always is that every big consumer AI company now that we see and love and use all of the products, which, which we all do, sticks around. I think, unfortunately, that's not always going to be the case. Um, I think maybe the interesting differentiation in AI versus the last era of consumer products, or even two eras before, is like, the model layer and the capabilities are still improving. Like, we have really not even, I think in many cases, scratched the surface of what these models can do. I think we've seen that in things like the, the VO three launch, where it's like, you can suddenly have multiple characters talking, you can have native audio, you can do all of these things. Like, all of these modalities, um, I don't know, maybe we could argue about this with the tech's people. The LLMs are more mature, but have the opportunity to just keep improving capabilities as they scale. And I think what we've seen is like, as long as a company stays at what we say is sort of like the technology or the quality frontier, so as, As long as they sort of have a state-of-the-art model, or are integrating one, or something like that, um, they won't become, like, the MySpace, or Friendster, or whatever. Like, they just keep, you fall a little bit behind, you ship the new update, suddenly you're number one again, and you keep moving. The interesting thing now, thoug…

AI assessment note: “as long as they sort of have a state-of-the-art model... they won't become, like, the MySpace”