A too-narrow approach after Apple beefed it? Nobody knows how to bring AI to market yet but OpenAI, Anthropic, and Google. Long shots are one thing, but all the ideas I've heard for b2c AI so far are mostly more like pipe dreams. Look for a Zynga play once the field starts opening up for that in maybe a year or so, would be what I'd try to do.
"after Apple beefed it?" ... what? Apple's inability to improve their OS is somehow an indictment of B2C AI offerings in a general sense?
You seem unfamiliar with the space, there are plenty of players outside of OpenAI, Anthropic, and Google bringing AI to the consumer space: https://a16z.com/100-gen-ai-apps-4/
Consumer AI is arguably doing better than enterprise where 99% of the spend is poorly scaling undertakings that don't deliver on even 1/10th of their cost.
Okay, okay, you've got me there, though we should really also talk about Humane and Rabbit. Still. YC's approach in this space thus far is probably the decision of theirs I've respected most in the last half decade, and though it is not surprising to see a Son-style cash binge counseled here instead, I don't really see why I should take that too seriously. Who doesn't love money? Who doesn't love to feel that it's flying around almost as if free for plucking off the wind?
B2C has gone mostly 'free' which means it is either relying on shady business models, sensitive to regulation enforcement and so a risky investment, or a numbers game which requires significant upfront investment with a 'hit' business model return.
In both cases backing 1 company with significant investment is not rational.
3. YC network becomes large enough that startups can exist purely to serve other YC startups. (B2YC)
4. A new accelerator is launched which aims to fund YC companies that serve other YC companies. (YC4YC)
5. ?
Mostly joking, but I do sometimes look at the social media accounts of people in YC / Silicon Valley and wonder if they are living in an increasingly insular world. I think they would benefit from stepping outside of that into the greater world economy more deliberately.
It is also a sign of where something is in its cycle - when engines were first invented they laboured in mines originally, then moving traction engines/tractors, then trains - it was a long time before the average person owned an engine for their own use.
This was largely driven by the efficiency and fuel density.. so like, the mines specifically were coal mines which flood and need pumps, but obviously have unlimited coal. The engines/tractors were competing against oxen and horse, and it's hard to get a lot of power out of them. The trains had an easy time to carry lots of coal due to their nature.
I'm not actually sure where tractors fit in. I haven't heard of them in the equation early on. I think at some point they were probably viable, but I never heard of a coal powered tractor (maybe there were some). I suppose tractors could leave piles of coal and stuff if they needed to by the fields.
Steam Tractors were definitely a thing long before the development of the ICE. I'm not sure what the fuel used was, though. Hell we still have "steamrollers" that no longer run on steam.
One way to interpret this might be that in consumer products, it's easier for incumbents to add AI to improve an already well-marketed product than to build and market one from scratch.
Yeah, and I think it’s also simply that inference with strong models is expensive.
OpenAI is lighting boatloads of money on fire to provide the ChatGPT free version. Same with Google for their search results AI, and perplexity which has also raised a lot. Unless you can raise a billion and find a unique wedge, it’s hard to even be in the game.
You can try to use small cheap models, but people will notice that free ChatGPT is 10x better.
How is it YC's fault the consumer apps failed to raise a Series A?
I personally have a consumer AI product that had 3 competitors get into YC, and they just didn't perform very well:
- One has so little distribution the only sign of life in the last 3 months was that they updated their landing page.
- Another released a disappointing app, didn't really iterate on it, and eventually pivoted into being a legal AI answering machine after that flopped.
- The third took down their app shortly after YC and pivoted to a content creation site for YT channels... then randomly let their site start going down, ignoring the customers, and doesn't seem to be doing anything anymore.
Meanwhile some competitors that didn't get into YC are now at 7 figure MRR (I'm at a measly 5 figure MRR). So it's not like the space these apps were in is as disastrous as these comments are making them out to be: YC took a chance and unfortunately these teams just weren't the right teams.
Hard to beat the chat interface when it comes to consumer products if you ask me. Pre-AI I often wished I could just talk to an application rather than try to figure out how the buttons the developers had chosen to wire up mapped onto what I was trying to achieve.
You would rather have a thing that solves a specific problem in a completely reliable way. An application that knows what you want to do because there is only one thing to do in the universe. AI can write it but never be it.
