"Google in 2019 announced that 5 million businesses pay for Workspace, while Microsoft has said that over 200 million businesses pay for its Office 365 suite."

"“the consumerization of the enterprise”—work tools were becoming as elegant and user-friendly as consumer apps. Furthermore, many tools were tailored to a specific user within an organization, making them superior to broad catch-all tools like PowerPoint, Word, and Outlook."

"More remote and distributed teams means more emphasis on knowledge management within organizations. People need to know what’s going on and where to find important information—especially when they’re working from home, often in far-flung corners of the globe."

"Online identity is becoming more complex, dynamic, and multi-faceted. Managing identity is a massive headache for organizations."

"Identity underpins every interaction and every transaction on the internet, yet the infrastructure of identity was built for an analog world. Social security numbers. Physical addresses. Security questions."

"The trend-line in all companies is toward more transparency: data is power, and workers are becoming more equipped to understand what’s going on, how to fix it, and how to prevent it from happening next time."

"the reality is you can be a great painter and not know anything about making paint. And I think you can build great products with large models without knowing exactly how they’re made."

"AI-powered tools aren’t themselves a category, but rather a new vector cutting across functions and verticals."

"enterprise SaaS may not be as “hot” a space as it once was, but there’s still innovation happening. Work is changing rapidly, with the rise of remote, distributed teams; with leaps forward in AI; with both the continued digitization of work and the continued consumerization of the enterprise."

"One dramatic oversimplification is that use cases can be grouped into two buckets: 1) Creativity, and 2) Productivity."

"Copilot now generates about 40% of code in the projects where it’s installed, headed to 80% within five years."

"We’re in the very early innings of applications, and it’s too early to tell what the killer apps will be. A looming question mark is how companies will build competitive moats; true tech differentiation is rare, and companies will need to find ways to stay ahead of competition, perhaps with network effects or with iterative loops of user engagement and product refinement."

"My hunch is that many of the best AI startups will be SaaS companies."

"The short answer for business models in AI applications is that we’ll likely see the same go-to business models that have powered tech (and business writ large) over the last generation."

"Marketplaces will likely (again) prove to be more capital intensive to scale, but will (again) have powerful network effects that provide strong moats. And SaaS will (again) prove to be among the most desirable business models, though AI SaaS companies will need best-in-class products to cut through the noise of how crowded enterprise SaaS has become."

"the Wharton professor Ethan Mollick, who argues, “Large language models aren’t going to get less capable in the next few years. We need to figure out a way to adjust to these tools, and not just ban them.” Today’s kids will live in a world teeming with AI; they need to understand how to navigate that world."

"What does it mean when computers are better at visual imagination than 99 percent of humans? That doesn’t mean we will stop imagining. Cars are faster than humans, but that doesn’t mean we stopped walking. When we’re moving huge amounts of stuff over huge distances, we need engines, whether that’s airplanes or boats or cars. And we see this technology as an engine for the imagination. So it’s a very positive and humanistic thing."

"Just as AI amplifies creativity, AI amplifies productivity. We see this in the tools that give writers and marketers superpowers, like Jasper.ai, Copy.ai, and Lex."

"AWS launched in 2006; the iPhone came out in 2007. Neither mobile nor cloud are saturated, but they aren’t as ripe for greenfield opportunity as they once were. At the same time, we’ve seen an unprecedented influx of private capital chasing startups"

"Perhaps the most compelling—and the most likely—force to power tech in the 2020s is artificial intelligence. AI has improved dramatically within the past few years."

"What we’re seeing is AI emerge from the infrastructure layer to the application layer—the parts of technology that everyday people interact with. The breakthrough use case in recent months has been text-to-image generative art"

"perhaps no use of AI is more visible to more people than TikTok’s For You Page."

"The major consumer applications of AI will lean heavily into sophisticated recommendations that anticipate your wants and desires before you even know them"

"The basic principle stands: Netflix pours billions into expensive content, while YouTube taps the world’s creativity."

"Netflix is a business built on heavy-hitters (expensive productions like Stranger Things, The Witcher, and Squid Game), while YouTube is built on volume—500 hours of video are added every minute. YouTube is built on the long tail."

"The concept of the long tail was popularized by Chris Anderson in an October 2004 article in WIRED."

"“Forget squeezing millions from a few megahits at the top of the charts. The future of entertainment is in the millions of niche markets at the shallow end of the bitstream.”"

"The concept of the long tail remains one of the best investing frameworks for internet companies. Many of the most successful technology companies in history have been built on the long tail."

"One of the powers of the long tail is its ability to expand selection. Amazon might be the best example."

"for long tail companies to succeed, they need to ensure that niche products are in stock when you need them"

"When more selection is available, customer preferences and interests become much more readily apparent than when tastes are curated by a handful of executives."

"Another facet of the long tail—paired with this greater selection—is that the long tail helps customers discover new products."

"Recommendations (and paid placement) on Amazon dictate the flows of billions of dollars spent on commerce; Netflix and YouTube algorithms shape culture; and Spotify’s recommendation-based playlists move music."

"The two major categories for the long tail framework are content and commerce."

"TikTok relies heavily on remix culture, allowing people to build on each other’s sounds and trends; this removes the friction to create that exists even with robust creation tools (“What video should I make?”) and leads to a stunning amount of creativity."

"As creation gets even easier, the long tail will continue to lengthen."

"Innovations like Midjourney, DALL-E, and StableDiffusion—which provide text to image AI generation—may unlock new levels of creativity and expression. This will shift content even more away from the handful of big-budget hits, and more to the long tail of creators."

"There’s one characteristic that many of the most successful internet businesses share: they create more jobs through their platform than the company could ever directly employ."

"Chris Paik calls this “off-balance sheet operating leverage.” Can a company enable an entire ecosystem to form on top of it? Companies that have off-balance sheet operating leverage are often the companies that rely on the long tail."

"One of the earliest recorded forms of commerce was cattle trade, around 10,000 B.C. Cattle had a fixed value and were exchanged for goods and services"

"Commerce is now a $26 trillion global market (e-commerce is about $10 trillion), mostly underpinned by cash, credit cards, debit cards, and, increasingly, digital payments."

"There are two primary types of shopping: search-driven shopping and discovery-driven shopping. Today, Amazon dominates search-driven shopping: 74% of online shopping searches in the U.S. now originate on Amazon.com"

"Amazon’s dominance in search-driven shopping is a key reason it’s been able to build a formidable advertising business in a few short years."

"Now Amazon is a top-5 global business by advertising revenues."

"Looking at 2022 data vs. that ~2020 data, Amazon’s ad revenue is already up to $30B+. Amazon is a certified advertising behemoth."

"Discovery-driven shopping is the mall. It’s wandering around, browsing, deciding what you might want to buy. Discovery-driven shopping is about serendipity."

"In the U.S., social commerce hasn’t taken off to the same degree as in China; rather, commerce seems to be layered on top of existing social platforms (Instagram, Pinterest, Facebook Marketplace), rather than companies blending social + commerce from the get-go."

"there are two types of advertising worth knowing: direct response advertising, which has the goal of making a transaction happen then and there, and brand advertising, which has the goal of building brand equity."

"The classic example of brand advertising, meanwhile, is Coca-Cola. Coke doesn’t care that you buy that Coke right now, but rather that next time you’re thirsty at a movie theater, you reach for a Coke and not a Pepsi."

"Most estimates have direct response comprising about 80% of all digital ad dollars spent online."

"when CACs got too high, DTC brands opted to go the old-fashioned route: brick-and-mortar locations."

"Brands like Warby Parker and Jessica Alba’s Honest Company now get 50% or more of their revenue from physical retail locations"

"Influencer marketing is one option, and the industry has swelled from $1.7 billion in 2016 to $16.4 billion in 2022 (a 46% CAGR). Influencer underpins discovery-driven commerce."

"But influencer marketing is also broken. As I wrote in May’s Influencer Marketing 2.0, most influencer campaigns rely on hefty upfront lump-sum payments and use hacks like discount codes to track attribution. ROI is often poor, and measurement is even worse. The channel is difficult to scale efficiently."

"Brands need new channels. One opportunity: creators."

"Brands care about a few things: 1) They only want to pay when they’ve acquired a new customer and done so profitably; 2) They want to control who can sell / promote their brand and where; and 3) They want the ability to measure what’s working and know what’s worth doubling down on."

"Kaitlyn Tiffany wrote in The Atlantic, “Whereas Facebook aimed to bring everyone and their mother online, Tumblr was the opposite: an online underground, a place where your mother, in particular, would never see you.”"

"While Facebook’s market cap soared to $1 trillion, Tumblr was sold to Yahoo in 2013 for $1.1 billion and then to Automattic in 2019 for just $3 million."

"Myspace, like Tumblr, put customizability front and center. Then Facebook came along and stamped out individuality."

"You’d want to be radically different from all others. And that was the real value of Myspace. When people talk about missing Myspace, they miss customizing their profile."

"New social platforms are ripe to be built, each emphasizing creativity and customizability. Three areas that interest me are: 3D creative expression Memes Pseudonymity"

"There are opportunities to create 3D spaces that are purpose-built for social and that are more customizable for your everyday user."

"Memes are how ideas move between people via culture and—as with all forms of communication—the internet dramatically accelerated the speed and scale with which those ideas move."

"Memes are the language of the digital natives: people who grew up online innately understand and communicate via memes, and new tools make memes easier to create and share."

"Over the past 50 years, there’s been a massive shift toward individuality."

"We used to give our kids popular names so that they fit in. The goal was to conform. The name Mary was the most popular girls name for all but six years (!) from 1880 to 1961."

"In 1880, 32% of kids got a top-10 most-popular name; by 1950, it was down to 28%; and by 2020, it was 7%. The pendulum of culture has shifted from the collective to the individual. We now give kids distinctive and unique names so that they stand out."

"People no longer want to have the same online persona as everyone else—people want to stand out. Platforms that allow self-expression, often by allowing you to adopt a new online identity, will thrive in a world built for the individual."

"Your identity becomes not a form you fill out on a profile, but something you choose."

"The best online spaces feel like this: entire new universes where anything is possible."

"One interesting trend over the past few years has been the return of Y2K culture, as Gen Zs embrace 90s and naughts fashion and music and aesthetics."

"Even though 3.4 billion people play video games—and even though the industry is larger than the music, box office, and sports industries combined—gaming still gets a lot of eye-rolls."

"the average age of a U.S. gamer is 35; that close to half (45%) of gamers are women; and that gaming is deeply social."

"Nintendo was founded the same year that Vincent Van Gogh painted Starry Night. Nintendo started out in 1889 making playing cards"

"Abstracting complexity is how crypto goes mainstream."

"Blockchain-Based Economies Modding and UGC IP Legos"

"One of the key gameplay pillars is “Access for All”, ensuring that the game is playable and fun with or without crypto"

"Axie’s economy has an inflation problem (much like our real-world economy!), as more players are cashing out than are putting money into the game."

"In the early days of gaming, modding was the original form of user-generated content; modding was the only way that an amateur creator could make something."

"Modding is important because it’s a way that creators can directly participate in digital worlds, unlocking the creativity of millions of individuals. It’s a critical piece of gaming, and it’s about to intersect with blockchain economies."

"What’s fascinating about many of the crypto projects popping up is that they sacrifice copyright rights, granting everyone the opportunity to build with IP."

"In Web2, modding has been a key unlock for tapping the community’s creativity—crowdsourcing creativity always results in more innovation than a studio or publisher or initial creator could dream up alone. Web3 layers in the economics."

"the next iconic IP might be community-owned"

"the platforms are built for advertisers, not for creators and communities."

"Virtual goods are already mainstream. Bringing digital assets onto the blockchain simply unlocks scarcity, which unlocks incremental value."

"RAC distributed $RAC retroactively to fans based on their fandom—whether they’d been a Patreon supporter, whether they’d bought merch in the past, and so on."

"given that social tokens involve people—often famous people—creating their own economies, social tokens will eventually be as buzzy, disruptive, and public-facing as NFTs."

"In launching $JROCK, Clark effectively creates a digital economy around himself. This is what makes social tokens so interesting: they remove intermediaries, letting artists, athletes, and other influential people interact directly with fans."

"This is a groundbreaking idea: tokenized fan communities reward the most devoted and earliest fans, rather than those with the most money."

"Social tokens better express the breadth and depth of a community. In the future, instead of measuring a creator’s clout based on her Instagram following, we’ll point to her market cap."

"In the future, we’ll buy, sell, and compare creator tokens as easily as we buy, sell, and compare stocks today. The experience might live in a Coinbase-like interface for trading social tokens."

"There are tools that let anyone create a social token. $KERMAN, for instance, used Roll. Artists like Portugal. The Man have used Rally, “a platform for creators and their communities to build their own independent digital economies.”"

"if we fast forward to 2030 or 2040, I don’t expect that everyone will have a token. Rather, high-profile people will launch tokens—people who today have a large presence on YouTube, TikTok, Twitter, and Instagram. You might participate in the digital economy of your favorite musician, actor, writer, athlete, or entrepreneur."

"To participate in digital economies, people won’t need to understand what “fungible” or “on chain” mean—they will just need to understand that there are only X digital items in existence, or that a creator has Y social tokens in circulation."

"The underlying concept of social tokens—buying “stock” in people you believe in and want to support—will make social tokens uniquely easy to grok."

"technology renders gatekeepers obsolete"

"The promise of the internet was to remove gatekeepers."

"social tokens are fascinating because they combine investing, patronage, and gated access in unique ways—all in a cross-platform, unified architecture."

"There are nearly 3 billion Gen Zs alive today. In 2019, Gen Zs surpassed Millennials to become the largest generation on the planet. And with the oldest Gen Zs still only 26, the generation’s $150 billion in spending power will swell 70% over the next five years."

"Authentic & Unique"

"The trend captures something second nature to digital natives: baring their most cringe-worthy moments for millions to see."

"status comes from being singular. If Millennials tried desperately to fit in, Gen Zs try desperately to stand out."

"McKinsey research concluded, “Gen Zers value individual expression and avoid labels.” This leads to new forms of consumption: consumption as access rather than possession, and consumption as an expression of individual identity."

"Gen Zs are genuine and forthright and singular. They don’t tolerate capping. They look down on cheugy. They bare their souls for the world to see and rely on the uniqueness of that soul (no matter how unsightly) to forge their own unique identities."

"Creative & Self-Expressive"

"over half (51%) say that Gen Z is more creative than previous generations."

"TikTok nurtures a culture of creativity by removing the friction to come up with ideas for content."

"The culture of creation on TikTok solves the cold-start problem."

"TikTok blows the 90-9-1 rule out of the water: 55% of TikTok users create content for the platform. Over time, the internet becomes more participatory; more people shift from consumer to creator."

"Stan culture is a way to find belonging. Stanning a creator becomes a form of self-expression."

"Pragmatic & Self-Directed"

"A 2020 study found that 54% of Gen Zs want to start their own company; 89% have considered an education path that looks different than college. A Gallup poll found that 77% of young people in grades 5 through 12 want to be their own boss. The main reasons cited are autonomy and flexibility."

"As Gen Z comes of age, work disaggregates. America will become a majority-freelance economy by 2026. Many young people aspire to be creators because they want autonomy and flexibility. They’ve spent their lives looking at the “rigged” system and going 👁👄👁 . Entrepreneurship is a way to reclaim lost agency."

"Gen Zs have no choice: they bare their souls online, rely on the internet for creative self-expression, and turn to digital realms for work."

"For thousands of years, humans lived in tribes that defined kinship not as something biological, but as something you create."

"Today, people have fewer places to congregate, converse, and find belonging."

"Research has shown that “third places”—communal gathering spots that aren’t your home or office—are critical to social connection."

"A recent survey found that nearly half of Americans always or sometimes feel alone (46%) or left out (47%). Over half—54%—feel that no one knows them well. Across the Atlantic, half of Brits over 65 consider the television or a pet to be their main source of company."

"From 1970 to 2012, the share of households consisting of married couples with kids was cut in half. Single-person households rose from 13% to 28%. A century ago, 75% of Americans older than 65 lived with relatives; by 1990, only 18% did."

"If the last 50 years saw a shift to the individual, the next 50 will see a shift to the collective—and digital connections will be the driving force of that sea change."

"Social eating and livestream sleeping both reflect the internet’s shift to authenticity and always-on creation / consumption. The lines between the physical and digital dissolve, and online friends become as important as real-world friends."

"Relatability has become the heart of a creator’s appeal, a far cry from the aspiration and elusiveness desired in celebrities of past eras"

"every consumer company is built on a few core human needs, and those needs don’t change much over time."

"If the 2010s were about people’s need for “status” online—manifesting in curated Instagram feeds and filtered selfies—then the 2020s are about people’s need for “belonging”."

"Bilibili is essentially a hub for interest-based communities. It originated as a place for anime enthusiasts, but has since expanded to music, dance, science, film, fashion, and more. Bilibili is built on a trifecta that elegantly captures the future of consumer internet companies: user-generated content, commerce, and community."

"But what’s most unique about Bilibili is how engaged and retentive its communities are. Bilibili achieves this by building friction into community. In order to join a Bilibili community, users must pass a 100-question test."

"Building in friction means that communities are comprised only of superfans; 80% of users retain after 12 months."

"Every aspect of the economy is becoming more community-centric."

"The best education companies, meanwhile, will build community into their product."

"In every sector, people are clamoring for human interaction and meaningful connection. Pieces of the economy that have historically been solitary are instead emphasizing solidarity."

"Friendship accounts for 60% of the difference in happiness between people, and studies have shown that one of the key markers for midlife satisfaction is being able to rattle off the names of a few close friends."

"people will discover connections with strangers through AI-powered platforms like TikTok and Clubhouse. These are the platforms that connect us with strangers and that create communities around us that we didn’t even know we craved belonging to."

"experts emphasize that a central component of a third-place social ecosystem is familiarity, but not intimacy."

"The best internet companies will be built to help people discover and nurture these online relationships."

"Company B is YouTube and Company A is Netflix. They are the two leading content platforms in the world, and both companies did about $30 billion in revenue last year. But they did so with dramatically different business models."

"YouTube pays creators 55% of advertising revenue, which is effectively its cost of content."

"The concept of the long tail was popularized by Chris Anderson in an October 2004 article in WIRED. Anderson’s opening lines read like a prophecy of YouTube, which would be founded the following year:"

"“There is not that much talent in the world. There are very few people in very few closets in very few rooms that are really talented and can’t get out."

"People with talent and expertise at making entertainment products are not going to be displaced by 1,800 people coming up with their videos that they think are going to have an appeal.”"

"The concept of the long tail remains one of the best investing frameworks for internet companies."

"Many of the most successful technology companies in history have been built on the long tail."

"Google and Facebook turn to small businesses for the lion’s share of their advertising revenue."

"What’s really amazing about the Long Tail is the sheer size of it. Combine enough non-hits on the Long Tail and you’ve got a market bigger than the hits."

"Spotify, founded in 2006, built its business on expanding music to effectively infinite selection."

"But for long tail companies to succeed, they need to ensure that niche products are in stock when you need them;"

"This is why companies like Amazon have best-in-class inventory management systems."

"As egalitarian as Wal-Mart may seem, it is actually extraordinarily elitist. Wal-Mart must sell at least 100,000 copies of a CD to cover its retail overhead and make a sufficient profit"

"When the crowd gets to vote with dollars and eyeballs, new forms of content and commerce suddenly become popular."

"Over the past two decades, “Data is the new oil” has become an oft-used refrain in tech."

"Recommendations have become a massive part of the successful long-tail companies."

"TikTok is the best modern extension of this framework. Building on the concept of recommendations, TikTok’s For You Page is entirely algorithmically-generated, tailor-made to the user’s tastes and preferences."

"As creation gets even easier, the long tail will continue to lengthen. Innovations like Midjourney, DALL-E, and StableDiffusion—which provide text to image AI generation—may unlock new levels of creativity and expression."

"Shopify is built on the long tail—on serving the many, many small merchants out there that comprise the lion’s share of global retail."

"Openstore then streamlines your operations and grows your brand."

"Pietra makes it easier to launch a digitally-native product line, abstracting away the complexities of manufacturing, inventory management, and fulfillment."

"Another example of a modern startup building for the long tail is Faire. Faire is a B2B marketplace that connects brands and wholesale retailers."

"Faire hits on the key components of long tail businesses: Faire improves selection by giving retailers a much greater variety of potential brands to choose from, and vice versa."

"My friend Chris Paik calls this “off-balance sheet operating leverage.” Can a company enable an entire ecosystem to form on top of it?"

"The seven deadly sins are a classification of our most fundamental vices—the negative personal characteristics that are human nature, and that we all find ourselves subject to. The origin of the seven deadly sins can be traced back to Christianity in Ancient Egypt, and the list has been refined over the centuries."

"Seven pushed the seven deadly sins back into our pop culture vernacular, beyond religious confines. And in the years since, the seven deadly sins have become part of our tech vocabulary too."

"In 2011, Reid Hoffman declared, “Social networks do best when they tap into one of the seven deadly sins.”"

"I would expand Hoffman’s statement to encompass consumer companies writ large. And I like his framework because it captures a key truth: human behavior is the engine of consumerism, capitalism, and culture."

"but we’re all fundamentally the same, shaped by millions of years of evolution: we all get angry; we all get jealous; we all need to feel respected."

"They are conduits for human communication, which runs the full spectrum of emotion. Both the good and the bad fuel network growth."

"LinkedIn personifies Pride."

"In the early days of the company, LinkedIn’s founders were surprised to find that, curiously, there was one profile that people seemed to visit far more than any other: their own."

"It turns out that people love to curate and admire their own achievements."

"And the network has given birth to the (*shudder*) LinkedIn influencer."

"Gen Zs view LinkedIn as a cringeworthy, out-of-touch place for older internet users to subtly (or not-so-subtly) humblebrag."

"But it turns out that LinkedIn has uniquely strong network effects, with millions of job-seekers and recruiters building their professional bedrock with the site."

"And there are other examples of Pride beyond work—particularly companies that allow users to showcase achievements or make a “flex” in their profile."

"But there’s one social network that is deceptively reliant on Pride: Strava. Strava lets athletes show off how far they biked or how far they ran."

"No company has better captured Sloth in the past decade than Netflix."

"There are many other examples of Sloth: hiring someone on TaskRabbit to assemble your IKEA furniture; turning to Instacart for getting your groceries; becoming so accustomed to Amazon’s speed that even a two-day delivery begins to feel unacceptable."

"But the sector that best captures Sloth in 2022 is gaming. Gaming is a larger industry than fellow Sloth industries like movies and TV combined."

"And the premise of the metaverse is inherently sloth-like: our bodies remain motionless in the analog world while our minds explore virtual worlds."

"Comparison is the root of Envy, and social media is built on comparison."

"Instagram disruptors like BeReal, Poparazzi, Dispo, and Locket have promised a more authentic, less curated reality. But even authenticity, over time, becomes performative;"

"Crypto wallets and virtual showrooms like Decentraland are the best modern example of Envy."

"A decade ago, Greed was signified by the rise of investing apps"

"When Reid Hoffman mentioned the seven deadly sins 11 years ago, he used GrubHub as the example for Gluttony."

"Snackpass is a social takeout app that lets you order ahead and pick up food—sort of like the Starbucks app, but for every restaurant. Snackpass gamifies food by letting you earn reward points and then gift free things to friends"

"Tinder is the canonical example of Lust. The company built its name on looks-based dating, with rapid swiping based only on a photo."

"Grindr, the gay chat app, averages 61 minutes of engagement every day—equivalent to Facebook and Instagram combined."

"As the old maxim says, sex sells"

"It seems capitalism slowly works its way up Maslow’s hierarchy of needs, and we’ve hit the Love & Belonging rung of the ladder with dating apps, paid communities, and fan subscription services."

"Sex sells. Lust sells. And Lust is powering one of the most successful creator platforms."

"Wrath, according to Dante, was a twin sin to sullenness. He wrote that they both came from the same essential error"

"Wrath is rage expressed, sullenness is rage unexpressed."

"Twitter has always been about Wrath. Everyone on Twitter always seems…angry."

"Review-based apps like Yelp also rely heavily on Wrath; some people even lose their jobs for being overly angry on Yelp."

"Fox News, meanwhile, has turned Wrath into its entire business model."

"DoNotPay offers you a “robot lawyer” that lets you sue anyone at the press of a button. Think of all the things that make you really, really mad—lawsuit mad. Parking tickets. Malicious landlords. Identity theft. Airline cancellations. Insurance claims. DoNotPay has built a surprisingly large business on helping you solve all of them."

"Theologians often recognize two other sins, beyond the initial seven."

"The first is Vanity, which has close ties to Envy. Instagram (and any social network, particularly visual-based social networks) could also be attributed to Vanity."

"Though perhaps the best example of Vanity is Lightricks, the maker of the editing app Facetune."

"The second additional sin—“the 9th sin”—is Acedia, a word which has faded from our vocabulary. Acedia is effectively apathy or listlessness, “not caring or not being concerned with one's position or condition in the world.”"

"(Side note: Lensa is a classic example of a product tapping into people’s vanity, and harks back to last year’s Digital Native piece The Seven Deadly Sins of Consumer Technology.)"

"What’s exciting about AI right now is that the platform layer is solidifying, meaning that it’s time for the application layer to emerge."

"One of the fascinating aspects of living in 2023—and one of the guiding themes for Digital Native—is the fact that our brains are no different than they were a century ago (evolution, it turns out, takes a long time), yet our world has changed dramatically in 100 years."

"Over the past decade, two primary forces have powered technology: mobile and cloud."

"Mobile facilitated the rise of large consumer internet companies"

"Digital advertising rapidly shifted to mobile in the 2010s, and desktop-era companies like Facebook had to scramble to reinvent their businesses."

"Cloud, for its part, underpinned an explosion in software-as-a-service (SaaS) and enabled data to become the most prized resource in a business (“Data is the new oil” and all that)."

"Mobile and cloud made the 2010s a very, very good decade in technology."

"Perhaps the most compelling—and most likely—force to power tech in the 2020s is artificial intelligence."

"Why swipe endlessly on Tinder when AI can surface your perfect match?"

"In June, SHEIN dethroned Amazon as the No. 1 shopping app in the iOS and Android app stores."

"SHEIN combs competitor’s websites and Google Trends to figure out what’s in style, then quickly makes its own designs, forecasts demand, and adjusts inventory in real-time."

"All of a sudden, a “1-on-1” experience is replicable at scale—and today’s AI applications are still rudimentary compared to those we’ll see in the coming years."

"People tend to prefer richer media formats: Instagram (primarily photos) has always been more popular than Twitter (primarily text); TikTok (primarily videos), meanwhile, has been eating away at Instagram usage, forcing the latter to pivot to video with Reels."

"The same preferences, in my mind, will hold true for generative AI: images > text, soon video > images, and eventually immersive 3D experiences > video."

"To get technical, Stable Diffusion moved diffusion from the pixel space to the latent space, driving a profound increase in quality."

"Last year was a tipping point for image models, with rapid improvements in quality."

"One example: famously, AI is bad at making hands. It’s very difficult to know how many fingers have already been made unless the AI has an excellent sense of context."

"One of the reasons that Mickey Mouse wears gloves is that it made for much faster animation; hands are difficult to draw."

"The same goes for Fred Flintstone and George Jetson—neither has a visible neck, because allowing for a neck meant that a character’s entire body needed to shift with each movement and expression. That meant a lot more work for the animator. A necktie and a high collar offered tricks for animators to speed up production."

"Finding Nemo was in some ways an excuse for Pixar to show that it could animate realistic water."

"Pixar waited until The Incredibles, its 6th feature film, to tell its first story about humans because CGI technology hadn’t previously been ready (part of the reason Toy Story focused on toys was because Pixar couldn’t yet render detailed humans—you barely see Andy and his mom in the film)."

"In the Black Mirror episode “Be Right Back”, a husband and wife move into a new home together. The next day, the husband is killed in a car accident. His widow learns of a new service that lets you chat with your deceased lover; the tool digests text messages and social media history to learn how your partner would have responded, and then chats with you in his place."

"Each new model makes leaps forward in its ability to come up with new ideas, understand context, and recall information."

"But larger models are also much, much more expensive to train. Training a model with hundreds of billions of parameters can cost millions of dollars."

"One of the earliest forms of AI was handwriting recognition, used primarily by the postal service to read addresses on envelopes."

"When it comes to generative AI, we’ve seen: 1) massive improvements in image and language models, and 2) valuable infrastructure provided by companies like OpenAI, Hugging Face, and Stability.ai."

"The cost of consuming culture may have declined, though not as much as we feared. But the cost of producing it has dropped far more drastically."

"YouTube was revolutionary, but left barriers to creation: 1) the money to invest in expensive tools, and 2) the knowledge of how to use those tools."

"TikTok removed those barriers with no-code-like tools, leveling the playing field. The result is that 1 in ~1,000 people on YouTube create content, while closer to 60% of TikTok users create."

"Just as AI amplifies creativity, AI amplifies productivity."

"More complex tasks (3D game creation comes to mind) will come further down the road. But any industry that involves human creation (read: basically every industry) will feel the effects of AI."

"A looming question mark is how companies will build competitive moats;"

"true tech differentiation is rare, and companies will need to find ways to stay ahead of competition, perhaps with network effects or with iterative loops of user engagement and product refinement."

"Software-as-a-Service is a beautiful thing. Predictable, recurring revenue. 80%+ gross margins."

"Ideally net dollar retention >100%, meaning that even without acquiring any new customers, your business steadily grows year-over-year."

"My hunch is that many of the best AI startups will be SaaS companies. Why change a good thing?"

"The challenge with Lensa, of course, is defensibility; Lensa lives on top of Instagram, Twitter, and TikTok and will have to figure out how to develop a moat."

"One creative new company building with a familiar business model is PromptBase"

"PromptBase is a marketplace for text-to-image prompts—likely one of the first marketplaces in generative AI. It’s surprisingly difficult to come up with the right prompt to produce a stunning piece of AI art."

"PromptBase sells access to such long, highly-specific prompts. The marketplace has 11,000 users so far."

"There will be ad-driven social networks, micropayment-driven MMOs, usage-based pricing."

"When a technology changes how a broad range of goods or services are produced, it’s called a “general-purpose technology.”"

"1) the Agricultural Revolution, which gave us food production at scale and let us transition from hunting and gathering to farming"

"2) the Industrial Revolution, which gave us manufacturing at scale. I’d argue that the onset of the internet—the Digital Revolution—marked a third. But I also agree with them that Transformative AI is the next general-purpose technology:"