Forerunner's Kirsten Green on the $1.8T wellness economy, AI-enabled consumer products, and why personalization is finally possible

reading. So if we want to, you know, consume something. We want to hear it from the source. We want to hear from the source. So thanks for joining. A quick rundown. Yeah. Uh how are you? Uh how are you doing? I hope you're having a great Friday and and going into a great weekend. Um but uh good to be here.

Can you uh c uh can you give a little background on you, your firm, and uh and the trend report? Yeah, sure. First, thanks so much you guys for having me on. This is fun. Yeah, excited. And it's uh you know, it's a it's a it's a crazy day with no shortage of action going on. Oh, yeah. Yeah, tons. Yeah.

Um so, yeah, I'm the founder um and managing partner at Forrunner and we're a venture capital firm. We've been here in Silicon Valley for the last decade plus making investments um investments across here for a decade plus of investments. We we love investments here. Um and we um largely focus on early stage investing.

We have a diversified portfolio across sectors and spaces. But we do have a thematic approach and a framework that we have kind of applied consistently for the past decade. And that's really tracking what is going on with demand. So where are the tailwinds?

Um and then we look for big technology shifts and business model changes and um and where business is not addressing that that demand.

And uh yeah, can you talk a little bit about uh I know I know you guys will do B2B as well, but it feels like you've always had a love, you know, for for consumer specifically, and that's gone in and out of popularity.

Obviously, when you started, I'm sure a lot of people said, well, why don't why don't you focus on SAS, you know, look at the outcomes that we're seeing. Um, you typically start your reports by reminding people uh just how much of uh I think it's here on the the American consumer is undefeated. Yeah.

The seventh uh slide consumers drive twothirds of US GDP. So I think that's probably like the anchor reason why it's been such a focus for the firm. But I would love to hear um kind of your your take on it. Well Jordy, that's one take. It's true.

you know, in that in the vein of tracking demand and demand being kind of the the driver of all of business, the twothirds of the economy and what's going on with the consumer is a is the most arguably the most meaningful force.

But really more than that, yes, it's true that SAS companies have returned lots of money to their founders and their investors. It's been a steady contributor of of opportunity and venture. But if you step back and you look at the last two decades, the biggest companies Yeah. started with a consumer first approach. Yep.

So, you know, I would argue that like starting a business with the consumer first approach, if you are able to create that incredible gravitational pull and build a foundation from there. Yeah.

We've seen time and time again companies prove that they can take that foundation and leverage it into dynamic business models over time. Can you talk a little bit about just the general health of the American consumer? It's been a couple crazy years the last 5 years.

Things were things were going really well and then we had COVID and everyone was out of a job and then everyone got their jobs back and then inflation crops up and now people are worried about the tariffs and what that means for the economy. Uh we've been in sort of a kangaroo market as they say jumping up and down.

not a bull or bear. Uh how is the health of the American consumer right now? Yeah. Um well that is a big reason why we do this consumer trend report every year. So you know as venture capitalists at 4Runner we spend the line share of our time thinking about the future and where things are going.

But to understand or have a view on that it is really important to step back and take stock of what's going on today at any given point in time.

And so you know the exercise of getting out of our own bubble and sort of taking a pulse of the of the country of the globe from the person you know the people on the ground um we feel like you know is is um is illuminating. So you're right in saying that the last five years have been crazy filled with uncertainty.

So you know I think we're all trying to kind of process how we feel about the current ongoing tariff discussion right now. Yeah. And I think I feel like I did in March 2020. Oh yeah. What's happening? Like uncertainty rules the day and here we are again.

So, you know, I guess the good news coming out of that big period of co uncertainty is that we have all learned to have an incredible amount of resilience. We've been forced to do that. So, you know, I think when we check in with the consumer, we see a good deal of that.

But we also, you know, definitely see some movement towards people feeling like they need to stand up for their own security and safety, that they can't count on the structures and the norms that maybe have been in place for a very long time.

And this is a time period where having more agency over your own life and your own actions um is something people are craving. So, you know, I think we do, you know, 200page slide deck.

There's a lot of government data in there and a lot of just kind of you know taking taking stock of the actual data and then we go to interpret some trends and really we focus it you know I mean I think it would say if we just look at 2024 we describe what we heard from people and this is a a lot of survey work in addition to a lot of reading and a lot of kind of number crunching and processing but it was kind of a middling year you know it kind of just lived in the middle from from all measures like from all the data metrics but then also if you look at like the cultural norms.

Most of the movies were kind of follow on second generation movies. Same with the music, etc. So, and you know, the the word of the year was like brain rot and something else slop. Yeah.

You know, so I I think that you had a consumer that's quite fatigued from going going through kind of the the the craziness of of of what the world has been. But at the same time, in that agency and in that desire to do things, there is like I'm going to, you know, I'm going to pick myself up.

I'm gonna take some action and I'm going to, you know, look for having more control over my career, over my spending, um, over my health care. We we went, we took a deep dive and we do this every year.

Kind of pick a few things that we think are particularly important in the context of that demand equation and also in the context of investing because it is in service of sort of uncovering investment focus. And the couple of areas we looked at this past year were health security and of course Gen AI.

So on the health front this is you know perhaps the big the biggest trend um in my you know nearly 30 years now of of investing. I think the biggest trend that we've seen um people are there is a the growing willingness to spend on health um and and themselves and outside of the system.

So you know 60% of the people describe health as being their number one priority even above friends and family the wellness economy. So when you know when you think about health it's not just the um I already have a problem I'm I'm at the doctor because of that problem.

It's the effort of proactive health which has really been a huge area of growth. The wellness economy which includes that is a $1. 8 in a trillion dollar economy and it's actually growing six times faster than the economy in general. Um, so you know, I think that the the dollars are there.

The scope of what people are willing to pay for is evolving. You're seeing people more engaged in supplements, more engaged in therapies, more engaged in their workouts, more engaged in in in um doing things like MRIs or blood testing or biomarker testing.

So this is, you know, this is a huge area of um it's it's fueled by both a breakdown in the system as well as just more information and people realizing that they have some ability to, you know, shape the future of for their own health. Yeah.

Do you feel like you're seeing enough founders take the concept of wellness sort of like seriously in Silicon Valley? Like we I take it very seriously.

John and I have this funny dynamic where like John has this joke that like if I had a single inorganic blueberry like I would die and John meanwhile just like eats whatever's in front of him and I could eat a I could eat a credit card with a knife and fork. Yeah, exactly.

But I but I feel like when you when you just when you just look at the data and understand how big the market is, how fast it's growing, you would think that 20% of new startups would be like targeting this opportunity.

yet it doesn't necessarily feel like I I want to talk about like the like like there's so much opportunity in health but not everything is going to be venture scale even talking to our friend Justin Mayers he has kettle and fire bone broth company it's not really this like hyperrowth raising every 18 to 12 months 12 to 18 months he's done great with that business then true it's more of like a fintech platform has venture written all over it and so uh how are you looking at the opportunity in health across the lifestyle business that's just going to not really raise grow a private equity rollup, maybe buy all the gyms and aggregate them versus a true venture scale.

Okay, this can be a public company. How how how do you assess that? Where's the opportunity in health? You know, I mean, obviously that's a really important point, right? There's a lot more businesses getting started every day that are not appropriate for venture scale.

There's a very unique set of traits that you're looking for in in venture. And I think that, you know, beyond beyond addressing like a a tailwind and and having that opportunity to to play into, you know, you really are looking for like does this is this a business that gets stronger as it gets bigger?

What are the flywheels in the business? What are the frictions to getting it going and starting? How do how like is the compounding effect a a benefit to the business? And does that give them like competitive advantages over time?

Obviously, one of the big things we're looking for is like what businesses have a chance to define categories and be real runaway category successes. So, that is extraordinarily hard to do if you don't have like a real business model advantage at the root of what you're doing.

And um a lot of um you know I think sometimes we have convers I often get asked about DTOC companies and I kind of cringe a little bit because I think to myself like you know we weren't ever here or we haven't actually made an investment in a product company per se.

We've always been looking at like a business model shift and a behavior shift. So I think at this point like there's a lot of the business model shift from moving online or moving multi-dimensional or things that a lot of those like those businesses that you described as lifestyle or products are playing into.

You know that the early wins in that have played out. We're now like what I think is really exciting today that really maps really well with a lot of opportunity in health is the power of Gen AI and how that can actually make experiences personalized, more immersive and more productive. Yeah.

So on that note, I I imagine there's companies like some of the opportunities that you get most excited about are like a company you invested in 5 years ago.

Maybe they're focused on therapy and then now they realize they have this opportunity of hey, we can make therapy cost like 99% less through things like Gen AI and potentially deliver similar results, right?

We saw I think it was earlier this week there was a study that came out that showed uh generative AI based therapy was was you know delivering pretty dramatic results.

So how how excited do you get about you know basically companies in the portfolio that you know not even just new companies that are pitching you or you're making investments?

Sam Leon called it uh AI is a cherry on top as opposed to trying to get into the foundation model or this like magical oh we're going to redo the whole thing with it AI. It's more like AI enabled businesses actually. Yeah, we we think about it. We sort of describe businesses as AI en AI led, AI enabled or AI boosted.

Basically, every company needs to find a way to be AI boosted. And you can imagine there's like a lot of degrees of that. You can use AI in your HR department and your finance function or you can reimagine your product like you just suggested Jordy and like you know make your your therapy product even more efficient.

Um, and then the enabled businesses are ones that at least our look at it is like a product or a service um that wasn't possible really without AI because it wasn't cost possible um and it it it actually you couldn't do it.

So you would think about like the example of like if you had a network of of of of therapy therapists and you built them you know human kind of onetoone and you were making that connection online.

Um, now now that is a unique case where you can actually add AI into your product and really kind of add a whole new dimension to your your business from there. That's probably true for a number of businesses, not most businesses though. Um, yeah, that makes sense.

Um, can you talk about uh, you know, the Studio Gib Giblly moment was amazing for me because it felt like uh, there was one thing one it it felt like we entered the sort of post slop era where like last year it was like, you know, uh, AI generated content that was cool but not like it wasn't beautiful.

Six fingers, it looked kind. But now you can get this sort of like handdrawn Japanese animation of of a picture you took a second ago for free effectively. It's joyful. joyful.

And so, but the thing that the thing I get excited about is like the giblificication of the rest of the economy and other consumer um other consumer experiences like you know just going back to the therapy example like it just feels like this concept of abundance and these sort of like incredible products that can be delivered to consumers for dramatically dramatically less cost.

Do you do you have any type of thoughts around you know it will take some time but my my personal theory is that sort of um same effect will happen in a bunch of other categories. I mean 100% like I I think this is a golden age opportunity to make you know much much more incredible products and experiences.

In fact we're talking about it like you know we were living in 2D and Genai is the power to take us to 4D and skip right over 3D.

Um and you know by that I mean like we've been talking about for instance you know 20 years now we've been talking about personalization um it really hasn't happened if you kind of look across imagine you go to a website you know how personalized does it feel like it's pretty much the similar experience than if you know I went to the website you went to the website so I think personalization not has not happened it is now really possible in a in a really deep immersive way with Gen AI and you've just got a lot of more productivity that can happen.

We don't we haven't seen the whole agent thing play out but it is definitely on its way and um and I think you know that plus creativity plus efficiency like imagination's open like so many more things are possible.

I I want to talk about lessons from the COVID turmoil in relation to the current tariff chaos and turmoil.

Um, I was thinking about we we we talked to a few founders who were massive beneficiaries of the tariffs honestly because they've their whole bet was made in America and so when these tariffs came in they're like our business is booming.

Um, but as we saw with the shift to work from home we saw massive booms in Pelaton and fitness equipment that was you know any e-commerce company did really well and then there was kind of a you know back down to earth moment.

uh what advice would you have for entrepreneurs who are maybe uh about to go on a generational run uh on the back of the nar of of the tariffs narrative? How can they build their businesses more effectively and what uh what are you looking for in terms of durability on the investment side?

I don't know that I fully processed like what's going to happen with these terrorists in terms of the durability of business but but the way I am thinking about it right now is that I don't think anybody I I think we're all in this together. I think every business is all in this together, right?

So perhaps you make your products at home. Um and perhaps the things that you use to make your products uh you get at home, right? So you're really not going to have a cost change. Yeah. But everything else around you is changing, including how much money people have to spend and how they're reorienting their dollars.

So I do think that everybody needs to think that much more carefully and closely about the value of their product, who needs it and why, and what service are you delivering. Everything just got a bit more competitive in that context. Yeah.

As you also do think like it's it's hard to um you you've got to learn to be nimble and navigate these crazy strange times because almost like these crazy strange times aren't crazy strange times anymore. They're just sort of there's there's one after the other, but they do change and evolve, right?

And like you mentioned at the beginning of COVID, like I think we all, you know, at first thought, wow, like everyone's going to hunker down, no one's going to spend, it's going to be really scary, business is over. And then you saw people at home thinking, you know, I deserve a nice thing, I deserve a this.

And shopping went through the roof, right? And people came out of COVID and they went to travel and they shifted dollars again. It's nimble. Being nimble is the key. Sorry to shift back to generative AI, but it's I mean it's a fascinating topic.

Um I've I' I've been kind of uh obsessed with this idea of like the the the GPT rapper meme being maybe almost harmful to entrepreneurship. People aren't taking enough risk because they're hearing if I build a rapper, no one will take me seriously. It's low status or maybe I won't get funding.

Um, but do you think that like we I mean we just talked to the founder of Honey, the he built a Chrome plugin that sold for a billion dollars. Like like it's incredible, right?

And so I I wonder um and and at the same time we've seen a lot of slowed innovation at the big consumer tech companies where pretty much everyone's asking like, hey, why why isn't Siri better?

And maybe I I guess the question is is something about um is is advice to founders like shoot for the moon you'll land amongst the stars there will be acquisitions of rapper products and if you just create customer delight that's beneficial in Gen AI or is it kind of just everything's changing so fast uh just get out there make something cool make something people want and then you'll figure it out or or or are you really trying to dig in and say we need to have a super concrete thesis about how this becomes a hypers scale business before we invest or really go and build what a lot in that question I just thought about four different things I wanted to say let me see hopefully I can get them all out but um so this idea like I don't think all rappers are created equal right so LLMs are foundational that is like the backbone from which we can all build from so I I I think anybody using that to their advantage in their business is just being smart a business that is eager for the LLM to keep getting better because it has the potential to make their product better.

Like that's where you want to be building, right? Then you've got to think about all the things that I would say that we've always thought about which is like um what's the value of your your product or your service or your software like who needs it and why? How do you keep innovating and growing?

How do you build a business around that? Like those things I I think you know hold true always and um and are critically important.

I I think the idea of like I'm just going to build something cool and fun and they will come and that will be interesting and that playing out to be a successful multi-billion dollar company. I I'm not sure there are many examples of that.

Um but at the same time I want to back up and say that like the way we're approaching the market right now in particular with this new like kind of the beginning of this new cycle if you will is most we're holding two things kind of front and center.

One is just the big the idea of like a a market tailwind that you're building into like there's a real demand, there's a real need, there's a real opportunity and um and that kind of ties to where we started earlier in the conversation, which is just understanding like where those where those pockets are, where business is missing the mark.

And then it's about the founder. It's about the founder and their vision for the future and their idea about um how a product, how a service can make it better.

And um and I think you all you really know at the very beginning is it's going to play out different than what is it ever ever whatever pitch deck you're looking at.

But I do think you can tell if somebody's got like a real pulse on um on on where things are going, where they want to take things like the world they want to make and show and how um how nimly and tactically they can play and execute with these new technologies.

Uh can we talk about education and and learning briefly because I feel like you know we've seen the adoption of chat GBT at you know every college campus and high schools and things like that and and maybe there's this early surge of usage that's not so great for kids that are trying to learn how to write and think and things like that and and uh you know we want people to actually you know learn how to communicate and and and reason through things.

Um but at the same time the the potential of every single you know person in the world having a tutor in their pocket is just so you know couldn't can't be sort of understated and maybe is not getting um enough uh enough almost like hype right but I'm curious how you are are I know you've made a bunch of you know investments in the space over the years and I'm sure those companies are thinking of I mean I am really bullish on this opportunity Jordy like I think if if you look at like the foundation traditional pillars of life, your health care, your finance, your career, and your education.

Like education is is arguably behind them all in terms of transformation. I I have a kids in grade school and their school books look the same as mine did 30, 40 years ago. It's unbelievable. We need to move the future forward.

Sure, you can use ChatG to cheat, but actually, we need to teach our kids how to use generative AI to their advantage because I think like for me, I'm having so much fun. I have a I have a I have a thing in my pocket. I could ask any question I ever wanted to. Yeah. And then I could follow the thought through.

That's the best part. It's not just search to get an answer. It's like search. It's like pose a question, get an answer, and then play with it. Keep going down the rabbit hole or take your essay and say, "I need to I need to work on this point a little more. I'm struggling with this thing. How do I move this around?

" like that is an has a huge opportunity to um you know continue to peak and drive curiosity, help us think deeper and you know kind of and and learn and um yeah and on that honest to like encourage kids how to use it like constructively.

Do you think that that's an area where voice specifically can, you know, get really really meaningful adoption?

Because the example you're talking about is like I'm writing an essay and I'm struggling with something in particular and theoretically somebody, you know, a child could have the experience of their teacher just sitting, you know, with them writing and being able to talk out loud.

And I don't think we've seen voice uh adoption as an interface as much as some people would have thought 10 years ago, but it feels like maybe now is the moment, right? Voice is so exciting.

I I do think that um when we when we're able to make voice a main mode of communication digitally, we're going to get so much more information. And it is the information that continues to power and tailor more personalized and engaging experiences.

So the the amount people share if they have a a voice, you know, a a speaking opportunity versus a typing opportunity is tenfold. So I do think I do think that's a big unlock. And I think, you know, this is a good point because this is how this is going to unfold.

Like we're just in the early stages of seeing what's possible. And um you know there is some very exciting voice technology out there and you know everyone's been buzzing about the company Sesame what they have is pretty amazing. Yeah. Um so you know it's it's definitely on the horizon in the near-term horizon. Yeah.

And la maybe last question for me for now and would love to have you know continue to have you on to kind of run these ideas down but uh how do you think about AI adoption because it's hard to compare it to the internet because it feels like everybody's used AI now and everybody probably not everybody right like we had we both had Giblly posts go viral and we had people quoting it not knowing how the images were being created and like they seemingly didn't know what chat was oh there must be a new filter app in the app store.

They don't know what open Snapchat or whatever. So, we haven't reached, you know, full adoption of of some of these new tools, but it seems like everyone's using them in in some capacity, even unintentionally, like I Google search and I get an AI summary. So, how do you think about AI adoption?

Is it is it just um businesses, you know, fully taking advantage of the technology and that's what we need to look at? Because I know I love this question, Jordy. I'm glad you asked it because this was one of the more interesting things that came away from our survey data.

I I think I should have this data point in front of me while we're speaking, but I don't. But it's like 60 or 60 plus of the people percent were like actually had said they were using AI regularly. Yeah. Now, what does that mean? That probably means chat GPT cla you know those. But like people are here for it.

I mean 500 million people was a number I read a week or two ago about Chad GPT and then I heard a bigger one later. Like that is a that is that is like kind of trial. Let's call it trial at this point because we don't really know what adoption's going to look like.

But I do think that it's it's growing incredibly rapidly and I do really believe that people like they're ready for it. We just have to build for it. You know this my call for like founders to build for it. like people you you know you build it they will come they are ready for it. Yeah, it's certainly faster.

We had a conversation. We had a conversation before this. It's like, you know, everybody wants to build AI infrastructure. We need more people to just build uh the AI, you know, the agents, right? Like build the hard stuff that, you know, so much opportunity.

Just think about chat GPT is to this generation what Google was to the last. And if you think about Google as like the place where you know the front door, you go there, that's your big search. But if you want to like look for real estate, you go to Zillow.

If you want to understand about a company, you go to Glass Door. A job, you go to Indeed. Or you want to travel, you go to Kayak or Expedia.

You want to go to Open Table for a restaurant, you you know, there's there are these like big categories that have, you know, lots of nuances that really deserve and warrant unique experiences. Like, let's let's build them for AI. Yeah. Where are they? Come pitch me. Yeah. I like it. Yeah, go pitch Kirsten.

This is fantastic. Fantastic. Thanks so much for stopping by. Yeah, thanks for coming on. Yeah, this is great. Thanks for having me. Yeah, have a great rest of your day. Have a great weekend. We'll talk to you soon. Talk soon. Bye. Bye. Cheers. Very much.

We didn't even get to the into the security thesis, which is uh maybe the most underrated in that report.

There are there are health tech investors, there are Gen AI investors, there are consumer investors, but I have yet to hear someone really I mean she created a whole market map for this idea of like security as a key market and it includes some health stuff, it includes some finance stuff, but it was an interesting uh thesis and trend that we'll have to dig into more.

Um, but in the meantime, we got David Prell here. Welcome to the show. What up, boys? How you doing? Looking great, dude. Look at