What's Growing on the Consumer Internet with Andrew Chen (Andreesen Horowitz) | Summary and Q&A

9.0K views
β€’
October 12, 2019
by
TechCrunch
YouTube video player
What's Growing on the Consumer Internet with Andrew Chen (Andreesen Horowitz)

TL;DR

Growth marketer Andrew Chen discusses the evolving consumer tech industry, emphasizing the shift towards physical world integration and the emergence of new exciting consumer products and platforms.

Install to Summarize YouTube Videos and Get Transcripts

Key Insights

  • πŸ˜€ The consumer tech industry has moved beyond traditional app-based models, with integration into the physical world becoming more prominent.
  • πŸ§‘β€πŸ’» Tech platforms that enable video-native products and services have great growth potential.
  • 🌍 The IRL channel, where technology is encountered in the physical world, presents opportunities for unique consumer experiences.
  • ❓ Startups must focus on finding untapped growth channels to compensate for the declining performance of established channels.
  • ❓ The gig economy is evolving towards a passion economy, where individuals can monetize their unique talents and interests.
  • πŸ•β€πŸ¦Ί Real estate and residential services remain ripe for disruption and digitization.
  • πŸ‰ Direct payment models are gaining popularity, reducing reliance on ad-supported revenue streams.

Transcript

hey everybody my name is Eric Eldon I'm the managing editor of extra crunch and with me today is Andrew Chen currently a partner at Andreessen Horowitz and a longtime growth marketer who many of you have probably read over the years on his personal blog before we get started just remember you can get questions to me by using the slide ou feature of... Read More

Questions & Answers

Q: How has the consumer tech industry evolved in recent years?

The industry has shifted towards integrating technology into the physical world, resulting in exciting opportunities in areas like groceries, scooters, and smart signage. Additionally, products like Fortnite have demonstrated the rapid growth potential of consumer tech.

Q: What remains the same in the field of growth marketing?

The growth process for startups still involves the zero to one stage, focusing on achieving product-market fit, followed by scaling efforts to drive maximum growth. Techniques like viral marketing, SEO, and paid advertising continue to be effective.

Q: How have ad-supported consumer Internet companies changed?

There has been a shift away from ad-supported models due to the challenges of building a sustainable marketplace with strong network effects. Instead, the trend is towards direct payment models, empowering consumers to pay for content and services they value.

Q: Will immersive tech like voice and VR disrupt content design and consumption?

Yes, immersive tech presents new platforms for consumer interaction, providing opportunities for growth and content design innovation. Developers can leverage voice and VR to create unique experiences and engage users on different levels.

Summary

In this video, Eric Eldon interviews Andrew Chen, a partner at Andreessen Horowitz and a longtime growth marketer. They discuss the changing landscape of consumer tech and the exciting opportunities that exist in the industry today. They also delve into the importance of finding unique growth channels and defensible business models.

Questions & Answers

Q: What is currently exciting in the consumer tech space?

According to Andrew, the consumer tech space has evolved significantly in the past decade. The traditional ideas and apps that were once popular have been tried and saturated. However, there are two areas that he finds particularly exciting. First, he emphasizes the integration of tech into the physical world, such as grocery delivery services and scooter companies. This merging of the digital and physical realms is changing the way people live day-to-day and presents exciting opportunities. Secondly, Andrew highlights the success of non-traditional consumer products like Fortnite, which have experienced rapid growth and attracted millions of users. These success stories demonstrate the potential for new and innovative consumer products in the market.

Q: How has the growth landscape changed over the years?

Andrew explains that the fundamentals of growth for startups remain the same, but the focus has shifted. In the early stages, startups need to focus on achieving product-market fit, which often involves non-scalable and qualitative strategies to learn from customers. However, once they reach the scale-up phase, growth techniques like paid marketing, viral growth, and SEO become crucial. These techniques still play a significant role in driving growth, but the areas in which they are applied have broadened. The teams that were previously working on consumer apps are now working on a variety of products, bringing their consumer design and growth expertise to different industries.

Q: Are there any growth techniques that have remained the same over the years?

While the growth landscape has evolved, Andrew asserts that some fundamental growth techniques have remained effective. For example, viral growth continues to be a valuable strategy, whether applied to messaging apps or new design collaboration tools. However, he points out that the performance of growth channels tends to degrade over time due to increased competition. The market becomes saturated, and click-through rates for ads, for instance, decrease dramatically. As a result, entrepreneurs need to identify untapped growth channels that haven't been extensively exploited by competitors. Finding such channels becomes a competitive advantage for startups.

Q: What growth channels or platforms are Andrew interested in?

Andrew highlights two areas that he finds particularly exciting. First, he believes that video is a powerful platform, not just limited to YouTube but also encompassing platforms like Facebook, Instagram, and TikTok. He sees great potential in developing video-native products that generate and distribute video content automatically, as seen in the success of Fortnite. He also explores the concept of the "IRL channel," which involves real-life encounters that lead to engaging with tech products, such as using an app after encountering a sign on a house. Andrew believes that exploring these channels, which often serve as an entry point to tech engagement, presents interesting opportunities for startups.

Q: Which revenue models are appealing for consumer internet companies?

Andrew states that he is not interested in ad-supported companies, noting that ad-based business models have their challenges. Instead, he highlights the importance of exploring new revenue models and tweaking existing models to find unique and defensible approaches. Specifically, he talks about the growth of the "passion economy" where individuals can monetize their passions, interests, and expertise directly by building an audience. This model involves direct payments, eliminating the need for traditional advertising. Andrew believes that consumers are increasingly willing to pay for content and that this shift opens up new possibilities for blending content and advertising in unique ways.

Q: Has big tech killed innovation in consumer e-commerce?

Andrew believes that big tech companies like Amazon, Google, and Facebook have not necessarily killed innovation in consumer e-commerce. He instead emphasizes the importance of building unique and defensible products. While some aspects of the e-commerce market, such as dropshipping and ad-driven businesses, have become saturated and challenging to scale, Andrew suggests that identifying niche markets, leveraging scale effects or managing digital marketplaces, could lead to success. He advises entrepreneurs to think critically about what differentiates their product and how they can find a growth edge in the competitive landscape.

Q: Will immersive tech like voice and VR disrupt content design for consumer consumption?

Andrew acknowledges the potential of immersive technologies like voice and virtual reality to disrupt content design and consumer consumption. These technologies provide new platforms for user interaction and offer new growth channels for startups. Early adopters of new platforms often benefit from being among the first apps or products in the market, as seen with the App Store in 2009. However, Andrew notes that discoverability remains a challenge for platforms integrating voice and VR. Nonetheless, he believes that as these technologies continue to develop, they will provide exciting opportunities for growth and innovation.

Q: Are there any opportunities being overestimated in the VC world?

Andrew suggests that there may be a bit too much hype around esports in the VC world. He believes there are more promising opportunities in investing in the next Fortnite-like product rather than focusing solely on esports teams. He also mentions that the traditional "Uber for X" model may need reevaluation since there are limited categories where it has proved successful. Instead, he suggests exploring managed marketplaces and finding unique propositions and growth channels for startups.

Q: How can direct-to-consumer (D2C) brands combat saturated acquisition channels?

Andrew emphasizes the importance of having a clear point of view on the defensible growth channel from the early stages of building a D2C brand. One potential approach is partnering with influencers or building a community of loyal followers that can act as a growth channel. By focusing on niches with subscription-based models or tapping into the passion economy, brands can differentiate themselves and avoid direct competition in saturated acquisition channels. The goal is to find growth channels that can be closed off to competitors once established.

Takeaways

Startups in the consumer tech space should focus on the integration of technology into the physical world and explore the potential of emerging growth channels such as video-native products and the "IRL channel." Though the growth landscape has evolved, fundamental growth techniques like viral growth remain essential. However, entrepreneurs should constantly seek out untapped growth channels due to the saturation and degradation of existing channels over time. It is important to build products with unique value propositions and defensible growth models, rather than relying on ad-supported business models. Immersive technologies like voice and VR hold promise for disruption and innovation in content design and consumer consumption. Startups should aim to leverage unique growth channels and find niches in the market to combat saturated acquisition channels, while also exploring new revenue models and business strategies.

Summary & Key Takeaways

  • The consumer tech industry has transformed over the years, with previously popular ideas like photo sharing apps and messaging apps becoming saturated. New areas of excitement include tech's integration into the physical world, the rapid growth of products like Fortnite, and the application of consumer design and product expertise in various fields.

  • Growth techniques for startups can be divided into the zero to one stage, where product-market fit is established, and the scaling phase, where growth techniques like viral marketing and SEO are utilized. While the largest levers for growth remain the same, new channels must be explored due to the diminishing performance of existing channels.

  • Video as a platform and the in-real-life (IRL) channel are two areas of interest for future growth. Video-native products and services that generate and distribute video content automatically have great potential. The IRL channel refers to tech products encountered in the physical world, like scooters, houses with smart signage, and digital platforms in restaurants.

Share This Summary πŸ“š

Summarize YouTube Videos and Get Video Transcripts with 1-Click

Download browser extensions on:

Explore More Summaries from TechCrunch πŸ“š

Summarize YouTube Videos and Get Video Transcripts with 1-Click

Download browser extensions on: