Andrew Chen (a16z speedrun) on the Future of AI Startups & Why Coding May Be as Easy as Video

I think we're at a point where, yeah, maybe we're going to go blow all of this up.

Today, I'm speaking with Andrew Chen, general partner at A16Z, about how AI and Agentic Engineering, formerly known as Vibe Coding, is changing everything.

I love the idea that maybe like the future will be individual one or two people. the same dynamics that shape you

people. the same dynamics that shape you know Shopify or that have shaped Roblox or you know YouTube content creation or Substack is coming for the software world and maybe code becomes like almost

like another kind of content this form factor of you know what we think of as software I almost think about it like yeah what if it's just as easy as it is to record a video we dive deep to

discuss how everything from product to go to market retention and even company building is evolving rapidly the entire aspect of Why growth teams ended up being created in the industry

was because you needed a combined unit of like marketers and you know PMs and engineers to actually ship things that would move move growth. What happens

when every marketer actually can output code themselves? Maybe every job will

code themselves? Maybe every job will include software creation as part of the job and then every software experience you have has software creation as part of it.

He's giving us an insider look into Speedrun and a special sauce attracting the top AI founders. So, it's like inverted fundraising experience where um you say, "Hey, I'm going to go raise

money and then you get like 50 investors to inbound you."

Plus, what actually gets founders accepted into Speedrun? We get, you know, tens of thousands of of applications a year into into Speedrun at this point. If you were to really simplify it, you would probably say,

"Welcome back to the Agentic podcast.

I'm George Banderion, your host and the general partner at Untapped Ventures.

Let's jump right into today's episode.

Where I want to start is the big news.

Andre Horowitz, no big news. Big news.

Nothing much.

I don't know anything.

Just just just a little press release about how the firm announced the 15 billion across six new funds.

Thank you. Yeah, we're we're all very excited at the firm.

I think a lot of people don't understand what this really means. Uh why did the firm do that and and what is the plan?

Right. Yeah. Well, I I think um what what you're seeing reflected is uh in in in a in a simple idea which is that you

know this wave of new technology in in in AI is you know potentially bigger than any you know uh innovation and wave

over the last couple years. And so so if you if you can imagine the idea that maybe AI is actually going to be have a bigger impact than like mobile you know

that's like that I think that's where we are now right and then when you speak to founders now you get a sense of that same energy of like okay this is this is the biggest thing maybe that's ever

happened in tech um and so I think a lot of uh you know what we do here at A16Z really just is a reflection of like the amount of founders excitement in pretty

much every industry, every layer of the stack. Um, and so yeah, so we're we're

stack. Um, and so yeah, so we're we're very excited that to to be able to um uh you know, support and invest in entrepreneurship.

No, I agree with you. And I mean, I think by some estimates, it's uh the impact could be the combination of mobile, internet, and cloud put together. AI could be more than more

together. AI could be more than more than all of those. So that's right.

Um you know, this is it.

Yeah. and with the firm whose sole thesis is AI in our case. You know,

we're really excited about uh the wave and continuing to work together. One of

our mutual investments uh is in a company called Nexa. Uh I remember I was uh in SF last year. I was speaking at a VC event and there was this handsome

German gentleman wearing all white. He

followed me off the stage, you know, tracked me to the bar. Uh I was grabbing a drink. He wasn't. he doesn't drink.

a drink. He wasn't. he doesn't drink.

Um, and he told me how excited he was about this agentic AI that he was building uh for the heavy industries and we ended up investing. Uh, his name is

Philip Wen. He's the co-founder and CEO

Philip Wen. He's the co-founder and CEO of Nexa. Uh, shortly after our

of Nexa. Uh, shortly after our investment, they got accepted into your program into Speedrun. You get hundreds if not thousands of applications per speedrun cohort. Uh, what jumped out and

speedrun cohort. Uh, what jumped out and made you invest in Nex?

Yeah. Um and and yeah, the the bar the bar is definitely high. Yeah, I mean we we get, you know, tens of thousands of of applications a year in into Speedrun at this point. Um and uh and and I think

in in the case of Nexa, you know, the the interesting thing with investing super early as you know is it's so much about uh people and and and and there's

there's a funny um you know metric we we we've talked about at the firm that's sort of you know the words versus numbers ratio, right? And because

there's an expectation that as soon as you're you know a startup that's raising a series B or series C okay better have a lot of numbers in it you know at at

that point um and but when it's a series A when it's seed when when it's pre you know a lot of like the assumption that you have to have is that the idea is

going to you know change significantly um uh you know you know from there and and so with with NEXA I think the the most interesting thing with it was this is a this is the company that you know

by by the time that they applied um you know they were already and and they're working on on uh you know AI tooling for um you know sort of industrial

applications and um um and and and the most interesting thing with it is is not only do you have um you know Philip who's just has already had a really significant career um you know exactly

in the industry that he's that he that he's going after but he had already actually signed up a bunch of customers so there there was the the the the uh the good news is it was a it was an

early investment for for us where when you were looking at the words versus numbers ratio there's actually a lot of numbers already involved uh you know um you know in in the business like you could tell that it was already working

so that was one of the reasons why we were so excited like you said you have a founder that has the domain expertise he has a great co-founder and David uh as the CTO so great pairing there um and

the you know we we like the two or three co-founders combo. So, great balance

co-founders combo. So, great balance with the visionary sales charismatic Philip and the proven uh builder David.

And from there, um they're going after helping with the Gentic workflows in construction and mining and lighting and uh for the industrial engineers and the

workflows and business processes in those areas. So, I agree and and they

those areas. So, I agree and and they did great. Um I I believe uh they you

did great. Um I I believe uh they you had your last uh demo day. They uh you put them first. It was Philip's birthday. Uh he kicked it off really

birthday. Uh he kicked it off really great. They went on to raise uh seed

great. They went on to raise uh seed round, I think $9 million led by Construct Capital. Yeah.

Construct Capital. Yeah.

Um we followed on, you followed on. Um

and you know, I think it was through that work that you and I got to uh hang out more and get closer and and do more fun stuff together. So, um, and also it was through that demo day that I got a

much better appreciation of the speedrun program and I was blown away. I mean,

you know, we're at all the demo days of the top ones and there's only so many top ones and, you know, one after another, one after another, one after

another. Um, all of the u graduates of

another. Um, all of the u graduates of the speedrun program were impressive.

How did that happen? And what is speedrun? And what do we need to know

speedrun? And what do we need to know about it?

Yeah. Well, yeah. So, so um the the way that this uh journey started was um uh in in in the last uh you know three and change years. Initially my um you know

change years. Initially my um you know fellow general partner um Jonathan Lie and myself um you know we had kicked off this whole effort to look at to look at

this intersection of AI entertainment you know gaming and kind of how how that was all going to going to intersect right so that's where

we started originally and and and and we built a a new fund at the firm um you know focused on that um what we quickly realized was you know wouldn't it be

great if we could take a lot more risk um and work with companies even earlier um particularly if they're doing things

that involve creative risk. So you know one one of the big things that um that that naturally leads to is to look at all of the functions. I mean this is

like part of the core DNA of Andre and Horowitz which is we have this big operating team. Um and when you start

operating team. Um and when you start looking at the functions, you look at marketing, you look at talent, you look at, you know, uh uh fundraising, you

look at um uh you know, immigration, you know, issues for the founders. Um you

know, you look at partnerships, you look at you know growth, you look at you know all these things. um what what are the unique capabilities that you can deliver

for the earliest stage companies maybe at the point when they're when they're pre-product and so for example if you think about launching and marketing a

product um the the focus might actually be okay well if you're a proumer product how do we get you to uh launch on social

media have a weight list have the weight list also as people put in email addresses to be able to enrich those email addresses to figure out what companies and job titles and you know

people that you're interacting with so that then you can then start to collect your first couple you know design partners you know for for your new uh product. And that's the kind of thing

product. And that's the kind of thing that a brand new company is going to like is it's insanely valuable for them to get their first couple design partners versus, you know, um if we were

in in, you know, writing a a check for series A or series B, you know, they better have customers at that point.

They better have they better have um uh you know, uh at least the beginning of a marketing team that can help them with this. But but this is you know part one

this. But but this is you know part one of the core um things that you know unique ways that we tried to approach this problem is to say okay well if we're going to have a cohorted program

to help founders and we're going to intake we're going to work with you know 50 50 companies at a time over 12 weeks.

Well, you know, what are all the programs that we can run that are specifically about helping them inflect between, you know, day one and day 90 um that they're with us to be able to

really tangibly and concretely um help them, you know, launch their product, you know, um try to try to um you know, get help them make their first couple hires. um you know, help them deal with

hires. um you know, help them deal with their immigration issues like all all these like nuts and bolts things that you know, the earliest companies, especially when they're just two or three founders that that they have to

deal with. Um and so so you as

deal with. Um and so so you as and all that culminating in the demo day and and and helping with a hopefully a successful big seed round at the end, right?

That's right. Yeah. I think I think the the the thought is that um you know if you're if you're uh if you're an entrepreneur very very high up on your

list of of uh responsibilities is don't run out of money you know and so for for the folks where they want to fund raise and you know most folks um you take it

as a as as a huge opportunity to do so we want to be able to introduce them to you know dozens upon dozens of investors and so yeah so the the demo day that um you know we're we're very happy to to

that you were able to attend. But, you

know, our goal there is how do we make it easy for um, you know, a founder who maybe doesn't have, you know, might might have a early network. You know,

they may have a network of like 20 investors that they've gotten to know really well. um and they have a

really well. um and they have a spreadsheet and they have a LinkedIn and you know all this but how do we make it so that rather than this the typical thing where you sit down you make a spreadsheet of all the investors that

you're going to talk to um that you have talked to and you're going to email them and then you're going to book these meetings instead you have you you kind of invert the whole experience right so it's like inverted fundraising

experience where um you say hey I'm going to go raise money and then you get like 50 investors to inbound you how do you create that experience right for founders Right. And so on the founder

founders Right. And so on the founder side of things, um if you're able to do that, then you know if if things go well, then hopefully within a week you're done with your fundra and you can

get back to work. Like how great is that? And then for investors I think the

that? And then for investors I think the opportunity is well you know what a timeefficient use of your you know

Tuesday to be able to walk in watch six you know 50 60 presentations. They've

all been curated by us. they've all been um you know been been working for wi-i with us such that you can you can you can see the the the the tangible impact

and so investors it's this thing where you kind of know okay cool if I if I like one of these guys I'm going to be able to you know go backstage after the

presentations and you can talk to them and you can do your work and the most recent cohort it felt to me like it was an AI accelerator uh the majority were

AI great AI companies like I said that you know I was like okay I'm interested in that one next pitch I'm interested in that one next pitch I'm interested in that one um and so yeah maybe you can

clarify what's the focus going forward um and and as it relates to the overall ecosystem what founder or startup is

this program the best for yeah well I I think I think you know these days where I'm most focused is let's just figure out how to work with

the best founders when the companies are brand new. Um and and that m matters

brand new. Um and and that m matters more than anything else. And so of course like it's great if it's um adjacent to some of the things we know

we know best. And you know by the way um over 50% of the companies are B2C companies typically um as as an example.

you know, that percentage moves up and down a little bit um here and there, but you know, we'll we'll we always want to keep keep that part of our heritage. And

so, we just want to work with with founders ideally as soon as they're ready to start something. And so, um you know, one one of the funny stats that that we've had is I think we had um uh you know, a dozen a dozen founders in

the last cycle where they uh they had jobs, they applied to Speedrun, we gave them offers, and they quit their jobs, right? And so, it it doesn't get earlier

right? And so, it it doesn't get earlier than that, you know, you know, at at that point. Um and and sometimes they

that point. Um and and sometimes they have ideas, sometimes they have ideas that we think are bad, sometimes they have ideas that we think are good. Um

the ideas always change, you know, that that that's part of how it works.

Yeah, that makes a lot of sense. So,

working with all the founders in the cohorts, what do uh the best founders consistently do?

Yeah. Well, I I love um when uh I I'm able to work with speedrun founders and um they're incredibly especially in a

B2B context, incredibly responsive by, you know, email and text and the whole thing. And I think it's a easy theory to

thing. And I think it's a easy theory to have that um you know people that treat their their uh you know their work as part of like um uh um you know sort of

with a with a service mentality that that that is uh you know one of the big things. I also love you know frankly

things. I also love you know frankly when folks are just like sponges for the um you know for for the for for the category that they're in. you know, how

how can you uh you know, make sure that um uh you know, if you're working in uh an industry like like, you know, social networks that you know every single

product that's been built and all the reasons why something's worked and not worked. And this is, you know, like my

worked. And this is, you know, like my um my friend Bology's, you know, idea maze, like knowing every twist and turn um is is just incredibly important.

someone that that is clearly like aggressively trying to assimilate and create that idea maze in their head so that they're not going to make kind of all the all the all all all the obvious mistakes.

Gotcha. Okay. And so then what is that bar to get in?

Yeah.

What are you looking for?

Yeah. Um I I wish it were formulaic, you know, because and in fact actually uh there there's um we we have an ongoing uh you know project to to figure out um

you know when we have let's say 10,000 companies apply and you know we have uh our investment team literally goes through every single company

you know line by line by line how like what are the what are actually the features you know in in in our kind of you know human review process um that causes us to score an application higher

or lower. If you were to really simplify

or lower. If you were to really simplify it, you would probably say, "Okay, either you have done something really interesting already with your company and that means that you have something

that you can talk to us about, right?

Whether that's metrics, whether that's customer logos, whether that's an an open source project that you've put together that has like crazy traction, you know, whatever it is, you have

something really concrete." Um, if you don't have that and you have an idea, great. Okay. Then, um, we'll probably

great. Okay. Then, um, we'll probably spend a lot more time then thinking about the founders's background, their motivations, you know, what is their unique capability and and and and in

those cases, um, you know, we're we're just very open-minded to sort of elite talent from anywhere, um, and and many different markers to show that, um, you know, they've done some some amazing

things in the past. And so, you know, that doesn't just mean the obvious thing of like, oh, okay, well, you went to this top school and you worked at this, you know, brand name company. And by the way, like sometimes that's a really great indicator. Sometimes that's an

great indicator. Sometimes that's an indicator that um somebody's like a follower, right? Um and and maybe not

follower, right? Um and and maybe not somebody that's going to be the CEO and founder. Um but but but more importantly

founder. Um but but but more importantly is like, well, you know, in the past, have you done something really interesting? you know, if you have um

interesting? you know, if you have um you know, if you're a world-class athlete, if you are uh you know, somebody who's who's uh you know, shipped uh a project on GitHub that has

like a bajillion stars, um if you're somebody that has like a huge social media following, like each of those things is a demonstration that somebody has uh you know, very very elite talent.

And then of course sometimes that's you know you kind of get something where somebody has a little bit of each. Um

and then we have to debate a little bit you know what that means. But like you know I I think I think there's there's there's there's also really you know we have really nuanced conversations about for example whether or not somebody

who's a solo founder is that a disqualifier or not. You know, one argument would be like, well, if you're a solo founder, not only have you not been able to convince, you know, a co-founder, you know, like how good are you going to be able to convince like a

customer, you know, that's sort of like the very first job is can you find one person who's who wants to follow you? On the

other hand, we often find somebody who starts a company and um you know, maybe they don't have a co-founder, but maybe they've already hired a couple great people um and they're a solo founder

with a supporting team already and they're already have some insights and maybe they have some, you know, early customers and maybe that maybe that's great, you know. So I I I think I think we try not to have like too many rules,

you know, in how this works because a lot of the, you know, judgment is is is that and and once we get to a point where it's all rules, then I guess yeah, then it'll be some decision tree algorithm that will spit out a number

and then we'll just decide based on that. But like I'm I I I like to think

that. But like I'm I I I like to think that, you know, venture capital is is uh you know that there's there's enough fuzziness in it.

Yeah, I agree with you. And and like as an example, the uh the solo founder thing is an interesting point because it's evolved, right? We see some of our best founders using agents and incorporating agents. And so you're, you

incorporating agents. And so you're, you know, like you were saying, typically start with two or three founders, make your initial hires, your founding engineer, your salesperson, but now there's agents for all those. And so

there there's ability not necessarily not to make any hires. And I don't know about the oneperson uh unicorn and and and things of that nature, but I I definitely think that with smaller teams, there's a lot that they could do.

Well, I think I think may you know, to your point, I think it's unclear what the form factor for the future of a company might even look like. you know

like we it it uh uh people forget but um uh you know there there there was a period where um you know the big automotive companies you know they were the first to really create you know get

big enough that you had to had business units and like functional departments and you know the whole thing and I think it was GM and and um you know Alfred Sloan that like created all this and

then you know McKenzie and many of the management consulting firms then went and taught that to a ton of the corporations um you know over the that was one one of their core before before digital transformation there was like

you know this is sort of like corporate transformation you know how this is how you corporate structure corporate structure and all that exactly yeah that that was that was a major part of their business and and so you know somebody had to like invent the

structure of these companies and there's all these heruristics of like all the things that we've come up with and I think we're at a point where yeah maybe we're going to go blow all this up um and I think the extreme is maybe to

think about um you know this this idea that uh you know we've had content creators for a long time and content creators are are are um uh you know often like very young people. are often

individuals. Um and uh and and maybe code becomes like almost like another kind of content. Um and so in a world where social media is primarily dominated by youth culture and young

people and people creating content um you know doesn't that imply that in because they're so time rich doesn't that imply that most of the code on the internet most of the software that's

being written on the on you know in the world will mostly be kids writing software potentially for other kids and then maybe they are solo and and and and the and the current instantiation of

that is looking at blocks. You know,

there are, you know, I'm on the board of a company called Voldeex, and, you know, they've been going and, you know, buying and building kind of a a long series of of uh, you know, Roblox games. And one

of the recent ones that they acquired is is called Brook Haven, which is like it's, you know, the the largest, you know, it's like over 100 million, you know, active players kind of thing. And

this whole thing was was written by, I think, like two two guys. um and and and uh you know is h had more act has more active users than you know 99% of what's

in the world you know for example and so um you know and and and and similarly like you know we had this we've had this whole wave of people that build like drop shipping businesses and people that you know so I I love the

idea that maybe like the future will be individual one or two people the same dynamics that ship that that shape you know Shopify or that have shaped Roblox or you know YouTube content creation or

Substack is coming for the software world, right? You know, which which which which

right? You know, which which which which will be wild, but like I think I think that's where it's all going.

So, it's an exciting time and I do want to see uh and touch on some more interesting things about speedrun. So,

um community is a big part of speedrun, right? Uh maybe you could talk about

right? Uh maybe you could talk about that from the cohort to alumni to the investor network around it. What role

does community play? I had the you know very uh lucky experience of moving to San Francisco in 2007 and that was kind of the beginning of web 2.0 know that

was you know when the iPhone was released that was um you know when when we also went from this period where uh you had very early stage VCs you know

literally first round capital and uh uh you know Josh there and and uh you know Mike over at at Floodgate originally you know Maples Investments um you know Ron Conway you know all those guys like

that whole era was one where the community was very small in San Francisco but very clearly a superpower power um of of of that dynamic was that

somebody knew you know I was living in Seattle at the time when I was 25 years old could move to um you know the the Bay Area and all of a sudden you just

meet a ton of other people that are all kind of interested in the same things and you had these investors that could support you um and you were quickly integrated into the system the system

which I think ultimately like this is kind of like the secret secret sauce of you know what it is that makes uh Silicon Valley really San Francisco these days like special is its ability

to do that. And so I think from from a speedrun standpoint I think you know what we really seek is the ability to sort of like replicate some some of those dynamics um and just do it in a

structured way. And so if you have

structured way. And so if you have somebody that is you know we have we have founders that are um uh you know coming from from you know we have a half dozen companies that are that are coming

from Israel and from you know uh we have a whole bunch that are coming from London coming from um uh you know Asia coming from many other places. Um we

want to have put them into a structured environment where you know they're they're in a kickoff they um you know are in smaller groups that are aligned.

you know, if you're a proumer company, you probably want to talk to other proumer companies.

Um, and how do you just sort of like create that shared experience? And so we we we house them all at um uh the A16Z offices in San Francisco. So they're

co-working every day together. Um and

then uh you know, they're doing office hours every week. And so you just kind of, you know, create the all of these environments where whether it's um, you know, sort of productive, you know, like the these things where they're trying to

learn things or it's like purely social um that you just have like your like your crew, you know, you just you just want to get them connected and that because we often find, you know, as as the speedrun team, we we want to be able

to help and support founders on on everything, but sometimes they, you know, before they want to ask us something, they want to ask each other, you know, know uh like for for and and

and frankly like like sometimes um you know we we we don't know the answer and like sometimes it's better to to just get get a survey of everybody. So so we try to create that environment and obviously it's such an intense um

experience that um you know at the end of it um uh you know hopefully people are like feel like they've made friends for life. Um and one of the roles that

for life. Um and one of the roles that actually uh I'm um you know we're hiring for right now is an alumni experience um head. And so this person will actually

head. And so this person will actually design and create like, okay, you you you go through the speedrun program, you're you're done a demo day, you graduate, congratulations. Okay. Well,

graduate, congratulations. Okay. Well,

what what is the speedrun experience after that? Right.

after that? Right.

Right. And there should be hopefully an experience that lasts for years and years and years. Even if you've left your, you know, the company that you originally started or you exited the company you originally started, there

are different ways to work with us um as as a 16Z and as a 16Z speedrun. Then

that gets into growth. Uh and and that's an area that you know I know both of us are really passionate about. I know

you've had a very hands-on vantage point both as an operator and an investor and and obviously you know you are the expert when it comes to this cold start uh problem having written the best-selling book. Um so let's talk

best-selling book. Um so let's talk about that. I mean obviously the

about that. I mean obviously the environment for those ideas uh was very different back then. um what aspect of it do you think still applies and and has stood the test of time and what

aspect of it uh should we modify for the current AI era?

Yeah, one of the first things I'll point to is that um when we got the internet and the web browser and all that um it

came with uh you know SEO, right? It

came with people being able to share links and also then further you know email invites and you know all this great stuff. Um when mobile came out, we

great stuff. Um when mobile came out, we got the app store and then as part of that we had text messaging, we had Yeah, exactly. We had, you know, mobile ads,

exactly. We had, you know, mobile ads, we had, you know, a bunch of that. the

the re one of the the really interesting difficult um questions right now uh I think for anybody that's building kind of consumerf facing or proumer um you

know applications with AI is you have this incredible engine and technology underneath it but what is the new distribution that you're getting up above and beyond what what existed in

the past and I think what you're seeing is it's it's it's not like the browser and um you know mobile where new kind

of, you know, consumer surface area is getting created that then that surface area then requires you to number one like rewrite your whole experience. Like

if you built a a a travel website, you know, um then when mobile comes out, you're going to have to redo the whole thing, right? Um uh that that doesn't

thing, right? Um uh that that doesn't quite exist, right? So, I think the the AI era has been interesting in that it feels like it's easier for incumbents to

add AI by adding like the Chrome, you know, Gemini button or, you know, adding um Lava into WhatsApp, you know, into all their text fields and that kind of thing. That's one thing that's

thing. That's one thing that's happening. And they're able to use all

happening. And they're able to use all of their pre-existing um you know, and I and I love clicking that little gro icon on, you know, in on on on X. they're

able to use all their existing surface area. Um, and then and then, you know, I

area. Um, and then and then, you know, I think for for all these new companies, the the question is, okay, well, you know, if you make your product AI native, you know, if you're going to

build a new um a brand new experience that's that's mostly chat oriented, let's say, rather than um that's powered by an LLM rather than having it be like a little sidebar. Is that enough of a

consumer upgrade, you know, and like an end user upgrade that that they're going to be that they're going to, you know, you're going to have vastly different retention curves or monetization curves or otherwise? Um, so I think I think

or otherwise? Um, so I think I think that is is like really one of the core conflicts right now.

Um, you know, so I'll let me let me call that out and put that aside. Second one

that I think is interesting is this like B2B versus B TOC thing. in B2B you're seeing so much top-down interest uh where executives and leaders and

investors and everybody are like have you thought about putting AI you know what's your AI strategy you know etc such that if you're selling a product to other businesses there's just this

magical pull from the market you know that's happening and and and if you put AI if if your company was you know product.com and then you

AI all of a sudden people want to try it more. Okay, that's in B2B. The

more. Okay, that's in B2B. The

interesting thing in consumer now that I've dug through so many so many companies has been um consumers still actually have the have the view I think that um or you know we're we're at this

point in the cycle where if it's something is likeAI that means it's worse right it means like you've taken my um you know travel company where I could

interact with a human and you've now made it so that I can you know I have to interact with this AI thing or hey instead of Got it. So, so you feel that that

Got it. So, so you feel that that there's early adopters that might consider it better, but the mass market considers it worse cuz you've dehumanized the experience for me.

Yeah. Well, well, and and uh you know, not not only dehumanized, but also just just the idea that uh the the actual level of quality of of the output is is

is worse. Got it.

is worse. Got it.

Right. Um and and so and so on the consumer side I think what's happened is and and you can look look at this across many you know verticals certainly within social media you know like that's why

people kind of talk about AI swap right certainly in in in game gaming you know if literally if a company says that they have are doing AI art in their game like

consumers are like up in arms about it you know um and then yeah and then and then you know if you have if you have a product where um it's a it's meant to be a concierge experience and then all of a

sudden you're actually dealing with an LLM, you know, that that that's that's very negatively perceived. So I so I think there is a there is unfortunately like um you know a a broad-based like

negativity on the consumer side for this right now right now and of course I of course I'm an optimist of course I'm you know like all these all these things but but I think because of that this is

again I'm just adding kind of like this is like one of the things that are in the conflict and then maybe the last thing you know I think I'll I'll um you

know add on all this is that um you is that uh AI just the inference costs are actually expensive right now right we're going to get to a point and I think it's

you know within sight where you can have a AI consumer experience it will every screen that you tap on

every thing that every feature you use will trigger you know an LM in the background and so there there's going to be a shitload of inference costs and also you're going to be able to just put

ads on it and then the economic will all work out. We're not there yet. We're not

work out. We're not there yet. We're not

there yet. And so what so naturally as a result, what we all see is people build these mostly proumer experiences.

They're they're productivity oriented.

They're asking people to put in credit cards at the very very beginning. Um and

then they're charging you for per token or per se or you know per whatever. And

it's much more of a productivity kind of businessy use case because we're not at the point where you can do the Spotify ad supported premium subscription thing and the math all pencils out. Right.

Right.

That makes sense. And when you wrote the cold start problem um have obviously evolved. You written that marketing

evolved. You written that marketing channels suck right now. A lot a lot of them.

Uh some of the new strategies, tactics, playbooks, right, that we have. We've

moved to you know first we had productled growth and then now we have founderled sales. We have FTE for

founderled sales. We have FTE for deployed engineers. We have AEO, GEO,

deployed engineers. We have AEO, GEO, right? AI search engine optimization.

right? AI search engine optimization.

You still have other channels like Tik Tok um that people talk about as relatively green pastures. So from your vantage point, what do you see? What's

working? What's not? How how would you advise early stage founders trying to get initial traction?

Yeah. Well, you know, I'm I'm gonna I'm going to take a little segue here and um you just just talk about like uh just one one of the presentations I put

together when I first joined A16Z um was a presentation uh that where the title was, you know, technology changes but people stay the same, right? And and I think it's just the recognition that

especially when you're thinking about um you know marketing and growth that the same ideas actually appear over and over and over and over again, right?

Um uh but they appear you know they manifest in different underlying technologies, right?

And so you know maybe I'll start with the head the headline on this. headline

is like every single thing that you can think of that's like um you know coupons, you know, uh referrals, um you know, advertising, you know,

whatever. I imagine every single one of

whatever. I imagine every single one of those just given how big and important the the the AI wave is will remanifest itself in a new in a new form, right? Um, and

and and my argument for this is actually, you know, if I go back to like coupons as as a great example, um, people often don't know this, but you know, the reason why Coca-Cola is what Coca-Cola is today is because it was the

first company to actually use coupons.

Hm. And so, um, I I I wrote about this in in in in, uh, uh, you know, my book many years ago, but, um, Ozaka Kendler was the first to actually,

you know, create a little thing that said, "Hey, if you take this piece of paper, you can get a free Coca-Cola if you take it to your lo local soda fountain." Now, the interesting thing

fountain." Now, the interesting thing with this, you know, soda fountain, think of it as like it's like a bar where you where where they were serving many different kinds of fizzy drinks.

Um, and so naturally all these customers show up, you know, at at at the local uh, you know, soda fountain and if you and if they keep asking for Coca-Cola and you don't have it, you as a business

owner, well, you're going to be like, well, I better get this thing otherwise you're going to go across the street and, you know, so on.

U, and that was the actual problem that that the coupon was meant to solve, which is actually how do you get B2B distribution for for Coke products in the first place. Um, which is which is super

place. Um, which is which is super interesting. Um, but if you kind of zoom

interesting. Um, but if you kind of zoom out and you're like, "Well, why is that super interesting?" Well, the reason why

super interesting?" Well, the reason why that's interesting is because coupons could only exist because newspapers existed, right? And newspapers could

existed, right? And newspapers could only exist because like the steam powered printing press existed. So, if

you have the steam powered printing press, this is all kind of like early, you know, 18 early to mid 1800s. If you

have that and then you can actually print you know newspapers then naturally what will happen is you you have a new surface area for consumer engagement and when you have new surface area for

consumer engagement that's when the marketers can come in and figure out new innovations to kind of attach you know to to to all of that new attention. And

so so no wonder overundred and you know 50 years later or whatever you know if we have search engine results if we have you know websites if we have mobile apps you know

or or or any new you know consumer surface area then people are going to reinvent continue to reinvent the concept of a coupon just in different form. So I I certainly think that um uh

form. So I I certainly think that um uh you know there will be like given the amount of time at least you know for myself personally that I'm interacting with LLMs on everything now that that is

such a incredible surface area surface area for consumer engagement that you know that the natural push will be that all of that will eventually point to other other things and and

sometimes that will be commercial and monetizable and sometimes it will just be you know helpful to you and maybe it'll be Mark sponsored maybe it won't be Mark sponsored Maybe it'll maybe it'll tell you about stuff that you might want to buy, not just answer.

That that would be the hope, right? It's

all coming, I think, because this is the perfect time to actually give me an ad of something that's 100% relevant to what I was searching for and likely to

buy, right? It would be advertising at

buy, right? It would be advertising at its best. And and if it's done that way,

its best. And and if it's done that way, uh versus the highest bidder, right? Um,

so if it's relevant, if I'm searching for Hawaii deals and Hawaii flights and Hawaii hotels and it's from their Hawaiian advertisers, right, and it's the best flight deal relevant to what I

searched on, um, then that makes a lot of sense and and it's going to be high conversion for the advertiser, it's going to make the consumer happier. Um,

so I I think there could be some interesting models where it provides a delightful experience if done right.

Yes. And actually, you know, like I encourage everyone listening to to, you know, just plug into their LM like, you know, tell me everything that you know about me, you know, and and what you quickly

realize is that the the kind of advertising and kind of media profile that is being built about you is far far above and beyond, you know, anything

that's available on just like, you know, online ads kind of more generally, you know, cuz cuz what, you know, what's happening um you know, for the rest of the the online ads business is you are being cookied. You're going to different

being cookied. You're going to different things. You're being retargeted and you

things. You're being retargeted and you know sometimes you end up you know there's these various services that let you do this where you can go and inspect all of the you know user segments that you've been placed into. And so it'll

say oh well you're like a you know car interested high intent interested you know car car you know automotive shopper right for instance. Um, but it but it

doesn't have the point of view of like tell me about an SUV that is going to be the best one for the new kids that I'm having next year.

Right.

Right. You know, like that is like a whole new kind of level of like marketing information. And one day, you

marketing information. And one day, you know, we started this conversation talking about Coca-Cola. There will be some kind of coupons format. I assure

you, you know, that sits inside of in inside of every LLM, right? So, so moving from growth to

right? So, so moving from growth to retention, um, you've also written that retention is hard. Um, and you know, you were you were talking a little bit on the B2B side. You know, on the plus

side, there's a lot of interest.

There's, you know, board level all the way down to executive leadership mandates to experiment with it. That's

great. But I think what a lot of us acknowledge is that there's also going to be a lot of churn, right? Because

it's an experimentation budget and not everything's going to stick. You know

many cases they say okay we've identified a use case the use case is this process okay go try five different applications not all five of those use

you know uh apps that they tested are going to win it might be one or it might be zero in the end um and so there's concern about what the churn numbers

we'll see after that one year but give us your update on state of retention well I I think I think the the very two very inter topics both, you know, I I wrote very grouchy

um uh you know, complaining uh you know, blog posts about, you know, first that all the distribution channels suck right now and then also that retention, you know, sucks, right? And and then and then I'll talk about, you know, and then

and and yet of course we're seeing companies that are obviously adding insane amounts of ARR very quickly. So

like let's let's talk about that, too.

Like why why are they succeeding kind of in spite of that? So the the the first thought on on you know marketing distribution sucking is you know we're sort of in this world where as as as we were talking about like we haven't had

all these new distribution channels created and so we're still existing on kind of like the old stuff right this is SEO this is paid ads this is um you know email verality this is all you know the

the these are all all the things and what you realize is well SEO is like way too slow you know so that sucks um you know paid marketing okay well you know do you want to compete compete with as a

startup. Do you want to pay money and

startup. Do you want to pay money and compete with all these other companies?

They're going after the same customer and they are like hyper optimized as to what they can do. Probably not. Super

expensive. It's annoying. Um social

media landscape crazy, right? Like very

very busy, you know, etc. And so I think one of the things that you are seeing over and over again and and that relates

to retention is that a lot of the um uh most effective early early stage startup tactics right now have to do with awesome launches on social media, you

know, and so if you're on um you know, AI Twitter or you know, I don't even know what to call it now. uh you know it's like a X the X community for the AI enthusiasts all hanging out together and you're able to do a really cool launch

video and then everybody tries your stuff that's awesome but you're also getting this really kind of potentially like flighty kind of early adopter um uh

you know group of users that come in and no wonder you know I see a lot of data data rooms of of kind of you know many many AI companies uh many AI products you see that the retention curves are

absolutely awful you know, you see um uh you know, when when you get a big spike of users, those users extremely experimental, 30 days

out, you'll have lost 95% of the users, right? I mean, just like huge drop, huge

right? I mean, just like huge drop, huge drop off.

And and so you're kind of like, well, what do you do with that? And and and this is repeating over and over again.

And so then you're like, okay, well, these spikes are are happening all the time. Whenever there's maybe like a new

time. Whenever there's maybe like a new product release or whenever there's a new underlying kind of upgrade in all the models that then like increases all the capabilities, then you kind of get another spike. But I think this is you

another spike. But I think this is you know this also comes back to why is it that um AI I think is you know products are working even better on B2B and

proumer over consumer is that if you have a retention curve that sucks there's only a couple ways for you to turn that around right one version of it is okay well you kind of remove all the

enthusiasts it turns out you're really creating value for a smaller percentage of people maybe that maybe it is only 5% of your users but with those 5% of user users, you can then go figure out, oh,

they work at these companies and then you go sell to those companies, right?

And then all of a sudden it's like, yeah, even if your per user retention curve isn't great, at a account or logo level, all of a sudden you're starting to grow, right? So, so that that's like one, you know, amazing way that that

that that can happen. The other is of course of individual kind of like just enthusiast programmers that are just using like hundreds of millions of tokens like per day, you know, just like

working on random projects, right? You

know, and like how awesome is that?

Well, from a retention curve standpoint, what that means is yeah, maybe you lose 95% of your users, but maybe the 5% that stick are actually, you know, so engaged that from a purely revenue standpoint,

they actually cancel out all the churn.

And so what ends up happening is is that is how you end up um uh seeing this paradox of both really I think um you

know flighty user bases and then in combination with that that like when it does stick and especially when it's in a B2B environment they seem to grow incredibly fast you know as well. All

right. So now let's shift into how AI is changing how we build and ship product.

Right. So a year ago you you wrote a another great seminal blog post on this idea, this new nent idea of vibe coding and how uh LLMs are getting good enough that people could sit there and just

kind of vibe code a product. Um and wow, it feels like that was another one of these AI light years ago because that field has progressed so much. Um, what

has surprised you the most about how massively the coding agents and vibe coding has taken off?

Yeah, I mean, if if you had told me just how how good LLM would be at coding, I mean, it's just unbelievable what it's

able to to to to do. Um I I like many of my co-workers and many many folks out there over the last you know couple weeks have been um you know simultaneously trying um you know cursor

and all their new models and anti-gravity and cloud code and building Ralph loops and you doing all all sorts of stuff. Um, you know, I the the

of stuff. Um, you know, I the the project I was doing over over break was actually just um uh taking how how do you take a single line prompt for a

product and then turning it into a really detailed PRD and then feeding it into cloud code to go code for, you know, an hour plus on your super detailed PRD. And and and specifically

detailed PRD. And and and specifically what I wanted to do was to be able to um, you know, give it something like Windows Notepad but with a twist, right?

like a product that's a well-known product with a twist and then that way you'd have a really detailed PRD of like everything that all the features and all the things that you'd expect from the known thing but then be able to give it

like a little bit of a like kicker and then just see like what what that experience would be. And so I think I probably built like you know 50% of a doz a dozen different projects like over

over the break um you know between between uh you know evenings and weekends on on on you know while we were on uh you know vacation um you know to do that. And so I I just think I just

do that. And so I I just think I just think it's been like incredible to see the progression. And then today I was

the progression. And then today I was just reading about how um uh you know the cursor team um had a bunch of agents

uh coding non-stop for a week to build uh like a browser like it was a oneshot on a browser. Um and and and just like

like this amazing thought that that uh you know you can have this like week-long you know sort of lack of intervention and it and it can just like code something. you know, obviously it

code something. you know, obviously it works better when it's a well understood thing like like a browser. So

I think all this is to say is um you know, I just kind of think about this idea and it's hard it's hard to extrapolate of like what happens when

writing software is like so low cost that it's almost disposable, you know, it's a disposable piece of content, right? the way that we think about like

right? the way that we think about like a photo being, you know, it used to be that we um, you know, we had film cameras and you had to like ration like how many photos you would take and now we're like in the digital world so it's like how many photos you want to take? I

don't know, take as many as you want.

Like there's no there's no sense of like cost, you know, of that. I think

building software products kind of like has the potential to sort of be that way. And so I think that the thing that

way. And so I think that the thing that I imagine is is yeah, what what happens in a world of of that? Well, you know, so let me speculate on a couple things like so first what you might think is um

uh you know typically people undertake software projects and they're big they're they're big things you know and so of course you either want to build products that are for millions of people right apps that are for millions of people or if you're going to build it

for a small number then um you know they're going to be businesses you know but you but you don't really think about building products for you know like your five family members you know you don't

think about building you know, like disposable products like for yourself.

But like, yeah, we'll we'll certainly get there. You you also think about

get there. You you also think about building products almost like like we don't have the idea of like like a meme on the internet is a photo or an image

like that has that somebody will create in reaction to some world news. Oh,

there's a thing happening in Oran or oh, there's a thing happening in, you know, in the stock market. Okay, cool. I'm

going to make a little image about it.

But you never think of somebody being like, I'm gonna build a software meme app, a meme app, you know, for that. But it

could be a cool idea.

But yeah, but but we could get there, which is to say like, oh, you know, well, Maduro gets, you know, like taken out and so, you know, he's he's been he's been captured and so that day an

app gets created that is like a simulation of that experience and you can play through it and you know the whole thing and then the next day zero people use it, right? you know, but for the one moment where it's super relevant, it is like a super interesting

product and it may maybe make some money because people throw some ads on it or, you know, whatever, right?

Um, uh, you know, and and so, so, so I think although this form factor of, you know, what we think of as software, I almost think about it like, yeah, what if it's just as easy it is as it is to record a video and like what happens?

Um, and you know, as I mentioned earlier, I think it also means that a lot more kids actually end up making software. or they end up making software

software. or they end up making software for each other. It means that you get a lot more randomness in the kinds of software that people create. But also um you know just because Mr. Beast can make

a a Mr. Beast style video and you can also like look at that and you can make the exactly the same video that doesn't mean that that you're going to be as successful as Mr. Beast. Well, why is that? It's because of brand. It's

that? It's because of brand. It's

because of IP. It's because of like these moes that are actually not typically things that like a software company would think of as like that being a moat. But but that might be just actually be the case

um you know over time and and um and then you know rather than having a company think of itself as like you know because today what we do is we build

like you know Microsoft Word and then we we we operate it for decades and people just like buy into the franchise. You

know, there's another model that that that that is that's quite popular right now and you see it with like various like Turkish game studios and you know that kind of thing where they will go

and make copies of like many many genres of things and their entire portfolio may be like hundreds of different games.

Well, it's like maybe what and and in the same way it's like well, you know, as a blogger, rather than being an an author that writes like three books in my lifetime, instead I've written like a

thousand essays.

Maybe that's what happens. Maybe if when you're the future of being an app developer is you actually write thousands and thousands and thousands of pieces of software and many of them are ephemeral and you build a following of a

certain type of software that people like and uh and and and and that's the future. You like who who knows, right? I

future. You like who who knows, right? I

think I think that's that's kind of the part of the hypothetical that I'm you know super super interested in. Um and

then you know and then we talked about this a little bit earlier but like part of the reason why in in you know we we've had these kinds of delineations

between jobs you know a marketer versus you know a product manager versus a software engineer. A lot of that has to

software engineer. A lot of that has to do with just the fact that the rules are um coding is hard right? Programming is

actually super super hard. you know, you have to go and like study it and learn it and it takes years and then you know, one day you can you can you can finally do it and and so you know, the entire

aspect of why growth teams ended up being created in the industry was because you needed a combined unit of like marketers and you know PMs and engineers to actually ship things that

would move move. So you know I but but I mentioned that because like what happens when every marketer actually can output code themselves?

Exactly. like how does that actually change the dynamic? Well, I think we end up changing all the job titles because none of them aren't relevant anymore and it may mean that like um you know if you're a marketer and um rather than

having you know the mo the mobile phone was like the supercomputer in your pocket, this is having like super intelligence and like an infinite you know like access to labor and you have like Nike's digital agency like in your

pocket like what can you do with that, right? Um and and and I I think it it's

right? Um and and and I I think it it's going to just create a um you know very different structure to to to to like the

idea that that you know maybe every job will include software creation as part of the job and then every software experience you have has software creation as part of it right so you have

extensibility in all the software products and then all the jobs like you know you use that extensibility as part of doing the job right so I think I think I think there's like we we could sit here and speculate from many many different um you know avenues for for

where this is go but yeah it's it's certainly very exciting. Yeah. And and I mean I think a lot of what's exciting about it is that a good part of what you said in many ways is here, right? Those

the non-technical people can use the vibe coding tools to build stuff that's workable right away. It may not be scalable to thousands of uh simultaneous users, but but but um the disposable

apps, whether you're using, you know, the lovables and bolts or whatnot. And

then for the engineers, right, more of the coding agents to make them 10 or 100x better, faster um and and increase the the quantity and sometimes the

quality of their output. Those are here.

They're being used. They're they're

they're being adopted in uh astronomical numbers. And I think it's it's really

numbers. And I think it's it's really amazing. Andrew, thanks again. This has

amazing. Andrew, thanks again. This has

been a ton of fun. For everybody

listening, tune in for the next episode and signing out.

Wow, that was an amazing conversation.

Huge thanks again to Andrew for joining us and sharing his perspectives on speedrun product and company building in the agentic age and what really matters at the earliest stages. So, if you want

to follow Andrew's work or connect with him, you can find his writing on Substack at andrewchan.substack.com.

You can also find him on LinkedIn. And

if you're a founder interested in the A16Z speedrun program, definitely check it out at speedrun.as16Z.com.

Now, during the episode, we discussed Speedrun along with Nexa, a company we co-invested with Andrew. And in an upcoming episode, I'll be sitting down with Philip Wen, the co-founder and CEO

of Nexa, to hear directly from a founder who's been through that journey and very successfully. So stay tuned for that.

successfully. So stay tuned for that.

So, if you enjoy this episode, make sure you subscribe to the Gentic podcast so you don't miss future conversations with AI founders and investors building at the forefront. And if you're building an

the forefront. And if you're building an AI company and you're in the preed or seed stage and you're interested in an investment from Untap Ventures, these are exactly the kinds of conversations

and companies we love to chat with. We

write checks of up to a million dollars and work closely with founders early on.

So, you could learn more and pitch us at untapped.

Thanks again for listening and we'll see you in the next episode.