Forerunner's Kirsten Green makes the case for consumer AI — and why right now is the moment to build

not stopping what is a financial evolution and a social trend. Listen, if tomorrow republic stop doing this, the cat is out of the hat. Binance, OKX, whoever in Vietnam and Abu Dhabi and Saudi can easily roll this out and there's nothing that these company can do about it, particularly in those markets.

So, we hope that we obviously have not just investors best interest in mind, but our partners. So, I'm I'm hopeful that in a week or two, I'm going to come back and be able to tell you guys that there's a collaboration going on rather than there's a lawsuit in the federal court. That's exciting.

Well, yeah, we definitely want to hear from you. Uh last question. Uh will the will the tokens uh be liquid or illquid? Is this something that you're buying and then it's sort of trading in real time?

I I I bring it up because if if this had been live a couple weeks ago when when uh Elon static fire test failed that or or the Oh yeah, that sorry I'm just small blow up. You could imagine the the there being some sort of trading activity. Sure. Dude, the whole point of this is obviously liquidity.

I mean, the entire listen secondary secondary SpaceX shares have been traded and sold and packaged among family offices and institutional investors. We all know in every single market, layer after layer, it is the liquidity and the retail component of it.

and this being onchain and us and one of our subsidiaries have the license to enable secondary trading of digital securities among non- retail US investors. So yes, the whole point of this is so that people can trade you know what they have and and market dependent.

So the future the what you had just described fast forward a year is what we aim to see for all of these major companies. Very cool. Well, thank you so much for stopping by. Thank you for joining you back when there's more developments. This is fantastic. Always a good launch strategy to poke a bear.

That's a good way to get good way to get attention and we're super excited to see see how this plays out and and definitely, you know, feel free to jump back on. Thanks so much for having me, guys. Have a great rest of your day. Cheers. Um, fascinating. So, there is a bull case here. I feel like there's a bare case.

I mean, no, the bull the bull case is like there's going to be you put space a a SpaceX derivative on chain, there is going to be such an obscene amount of demand for it. Yes. Yes. I I what I mean is is is bullcase for like peace and no drama and no lawsuits.

And I think what that means is that basically what are the benefits of having retail of being a public company?

You could potentially have a retail army of supporters who are who are supporting voting for policies that help you, lobbying, calling congressmen, publishing YouTube videos, yeah, promoting, hiring, all these different things. Um, but what are the downsides of being public?

Well, that, you know, all the different, you know, shareholder approvements, getting marked on a daily basis, all these different things about, um, you know, even just stock grants for for Elon. We saw that with Tesla. He kind of ran the ultimate AB test with SpaceX and Tesla.

And I think he's had a much smoother time at SpaceX than Tesla. And so from the crazy retail army Tesla who will buy his cars, who will will defend any act.

So I think what you're getting at is is there's potentially a world where companies have these sort of assets that are representative of their underlying equity that are liquid and that are getting marked daily. Yep. But if a company can basically say like we didn't permission this.

We don't have any information requirements. Exactly. And we don't even care what happens over there. People can do whatever they want. If if they're excited about investing us in us, great. But we didn't we didn't raise capital from them. We don't have an obligation to those token holders.

We have an obligation to our shareholders. And there's a world where this could be some type of happy Yeah. middle ground.

the the the question is um are there downsides to having this secondary third tertiary we're going to call it tertiary markets I guess where like imagine there's $5 million float out there and SpaceX in this tertiary market is trading at a trillion dollars and then you go out to raise or do a secondary transaction and there's this question of like what is the true price discovery you're trying to benchmark it to the retail price but then the insider institutional price is different or in the bad case what if tertiary market grows to, you know, $20 billion and you're like, wait, I want I want to sell some of that as primary and I want some of that on my balance sheet if I'm if I'm a growing company.

And then the companies go to Ken and they're like, hey, we got to we got to partner up here. Yeah. Yeah. Yeah. So, I mean, there's a bunch of interesting solutions. I'm excited to uh I'm excited to cover it. Certainly exciting. Yep. Exactly. Uh anyway, our next guest here is here in the studio. Uh Kirsten Green.

Welcome to the show. How are you today? Hi guys. Good to see you. Hi. Great. How are you? We're doing well. Uh quite the day. Very dapper today in Well, the market's up. We always on a on a great day. Reasons to be happy. Yeah. All times. We're very happy about that. And massive Neurolink news today.

Big launch from them. That was a lot of fun. Um and you've had a busy week as well. Yes. So, uh Neuralink news this morning. I've been Yeah. Yeah. Yeah. Yeah. Take us through the conference. um what was the structure? What was the goal? What type of people were you thinking about inviting?

And then I want to go into some of the learnings and what the what what the uh the current uh vibe is. Okay, cool. Um conference funny because it started out like a couple of weeks ago, I think six weeks ago as a happy hour, like a themed happy hour.

like let's get some of the people that we're working with that are building in consumer AI together. Let's bring in some other firms that have some other founders and just build some community and conversation on the topic.

And so like literally it started with like we went to a few co-investors that we work with and said you guys want to do this and they said yes. And then few more people than we imagined wanted to do it. So we're like yeah maybe we could do something with this. We thought we could, you know, showcase these companies.

We could build some enthusiasm around the topic, which I think was, you know, really my original impetus, like just to build some enthusiasm around the potential. And, you know, six weeks later, we had standing room only, lines out the door at our impromptu conference. That's amazing. Amazing breakdown.

um what what were the specific things that you wanted to be having conversations about consumer? Yeah, within the event and then kind of what were kind of some of the standout um topics. Yeah. So, you know, I think that as much as anything, it was like about putting a stake in the ground for consumer AI.

Um, giving people permission, if not like a provoc provocation that like, you know, or a rallying cry that founders there's opportunities to build for people. It's um and uh there's this new technology to do a lot with.

It's been a lot of conversation and kind of velocity around the foundational models, the infrastructure. Um, but we haven't really gotten a conversation going with a lot of enthusiasm or imagination around bringing that technology forward into the hands of people.

Um, at the same time, you know, I think there's never been a faster growing uh product adoption than Chach GPT. And we we talked a little bit about that. We talked about the fact that Perplexity and Anthropic are pulling customers in to try their products.

You go on social media, you see teens talking about their AI companions. You see parents talking, you know, using their co-pilots for family planning, trip planning, meal planning. Um, but there isn't as much building going on in this area in general, like on how people are going to use this outside.

There's some in the workplace, but more broadly. Um and so we wanted to get a conversation going around the human experience, the product craft and the everyday utility of this.

And um and I think you know against the backdrop of some of the biggest companies that have been built in the last 25 years out of the tech ecosystem started with the consumer. You know, today they look like multi-dimensional businesses operating in every category.

But when they first came to market, they were enticing a user to engage with them. Amazon, Google, Facebook, Apple, all those companies that are now the tech giants. Their first entree into the market was to get a user, get you and me to engage with the product.

And I think it's a magical place to build from um for lots of reasons, but one of which is is that you can move at the space at the speed of technology.

So there was a lot of conversation about how fast things are moving about how do you build a product when technology is, you know, kind of changing in the moment that you're building with it. Um and the consumer will build with you. There isn't a nine month sell-in cycle. They're they're there.

Put something up, they'll use it. They'll tell you they hate it. They'll tell you they love it. you can iterate on it and get that feedback. Um, and I think once you get engagement, you'll see the opportunities for expansion, which I would argue a lot of those companies saw and built big businesses.

So, it was about just saying like there's a tremendous opportunity to think very big, very ambitiously about the future and a role that you want to play in it as a founder and a and a company builder. Why not start with the consumer? Why not think about that?

And um I think that's a you know that's a pretty strong rallying cry.

So we were trying to I think I think we need a rallying cry when when I've talked to some consumer uh people that are I've been pitched some consumer apps lately and a couple times it's come up where my thought is okay this makes sense for the next year.

But if chatbt gets really good at computer use and operator gets really good, I think you might get destroyed because people have it installed on their phone.

And so the question for me is like, you know, how how do you figure out a way, you know, if chat GBT is undeniably the breakout consumer app of the last few years, like there's no there's no way around it and it's getting valued uh appropriately based on that.

But the question is like how do you kind of carve out space that is not you know that that that as chatbt gets better and more capable you're not kind of gonna get steamrololled. That is the first question that I kicked the day off with. Yeah.

We had um we had a we kicked off with um Reed Hoffman and we said you know hey Reed you have an all- angle view into this moment as a as a builder as an investor as a board member in these relevant highly relevant companies like there's a lot of conversation out here about like gez in a world where the tech is moving so fast and so aggressively and looking like it's expanding and teasing out already in so many areas like where do we build like h how how do we think about capturing a space when they've got all the resources and they're moving at that kind of crazy speed.

And I asked Mike the same question at the end of the day, Kger, at the end of the day. Um, and I posed as like this is the elephant in the room. This is what people are are are talking about while they have their good idea. Then they're worried about that.

Both of them said that yes these companies are you know they they they are moving fast but they won't dominate all verticals they won't be able to do all things um or or maybe they won't choose to because that's not the right thing for their business.

I don't want to discredit what they can and can't do, but I think there are, you know, an expansive number of things that require specialty and focus, that require craft and understanding around the particular lane you're operating in or service you're trying to provide.

um that that are incredible examples of opportunities to leverage the power of Gen AI and these LLMs, but that have all kinds of scaffolding around them that exist around that. Um and so, um you know, I think that um it's a little bit like I guess this was my analogy.

My head was like, okay, Google, like they own search. But there's a lot of big platforms that were built off of search in what is called specialty areas, but that are significant businesses. You could argue Amazon is that um you know, Zillow, there's been Expedia, there's been other things for travel.

They there are lots of reasons why the ubiquitous like, you know, kind of very broad front door isn't the right answer for everything.

Um, and it's also just like, you know, the everybody everybody, no matter how well resourced you are, how capable you are, weighs tradeoffs on what's on your road map, what's in and what's out. I think that's, you know, key to being a really successful long-term company and having a solid foundation.

You can't do everything. You don't need to do everything.

So there was universal agreement when asked this question answered in different ways that like there's plenty of room to go even if you want to assume that a big portion of it is going to go to a clearly you know set of exceptional companies that have driven breakout what they've done for this industry among other things is like woken people up to the potential of this imag you know amazing new technology and these new ways of starting to engage with technology.

where people are searching differently, not just on chat GPT, but for example, on retailer sites, you know, they've gone from keyword search to conversational search. And so my my thought there is like people are ready for it. They're they're they're here to meet the moment of what gets delivered.

I think it's on the builders to bring them something new and special and amazing. And um I just you know I think everybody when they really think about it is like you're not going to go everywhere. Okay. But what does that mean?

I mean I think you want to stay in ideally you want to find a place where you can be leveraging you can be operating or building in the path of progress. So you can kind of see how things are progressing. You can imagine like what is core to these big businesses?

How do I build something that can take advantage of where they're leaning in and being exceptional?

But I can build around in the context of my own environment the extra things that are going to make this like the the truly remarkable standout experience that becomes a daily habit or a use case for whatever your domain is. Totally.

And I and I think you know we show like one of the things that was really fun about yesterday was obviously the chance for this audience that was there to see 20 founders um get up and present their new companies.

These aren't companies that we all know about because they're seed and series A early stage companies and these teams had four minutes to get up and talk about what they're building um why it's possible today and why it matters and they did a really great job.

um for one, but I also think sparked a lot of imagination um you know cool examples of what you can do with the technology demonstration of kind of how people are thinking about applying it in different ways and I would say to you um you know I don't want to speak on behalf of any founders but I bet you that all of those are a starting point you know that that have visions beyond that too.

Yeah, we were we were at YC demo day a couple weeks ago and uh I don't remember talking to a single consumer AI company. We didn't we didn't get to talk to everyone, but uh so maybe it was just the B2B founders that were like really I had we had one YC company yesterday text. ai present. Oh, we talked to them.

We talked to them and they came up to me afterwards and they said, you know, there were four consumer companies in our cohort. Like we need we need our we need our people. Where are they? And I entire spoke with Gary Tan yesterday.

So, I was just going to say I've been spending, you know, more time with the with the YC great uh team there and and with Gary and listen Airbnb, Door Dash, some of the most iconic companies to come out of YC consumer companies. Coinbase one way is I wanted this like day to be about permission.

Like it's it's kind of been like a bad word like I'm building in consumer or whatever, but no. No. And and also it's like again it can be it can be your end goal. It can be your starting point but to the point of it's an incredible place to start from because you can iterate learn. Yeah.

Weirdly, consumer is is very competitive because you're you're coming up against chat GPT on a lot of use cases, but at the same time, it's it's less competitive just because looking at the YC batch, it's like that often ends up being a reflection.

But so today among among other things that I you know that that our team had in mind for what the event might offer um one of one of the the the things that really made me feel great about the day was I had several f people come up to me future founders and say I've been thinking about this product I wanted to build but I just wasn't sure if there was energy for it or demand for it or I'd find investors that wanted it.

And now after today, I saw so many cool applications. I got more new ideas about it. Like, I'm gonna build it. And so, you know, I think that we all say no or hesitate until somebody starts to turn it on.

And, you know, I think yesterday we saw 20 incredible companies that have been funded by some of the best investors out there. We saw 23. I mean, I we we started by calling, you know, a few friendlies that we invest with. Do you want to do this with us?

and you know then another friend you know everybody said like without a doubt like yeah we want to be part of that we want to invest in the next you know ambitious entrepreneur building in that area um and um and then after when we put the list up like here's who the co-hosts are I got more calls about it and so my point was just like hey listen like they're all open for business so take the VC firms and multiply the number of you know available dollars they have to invest and it's all possible for a consumer founder to get you just you know I think part of it is is you know thinking ambitiously enough about what you're building and being able to answer some of those hard questions but you know hard questions exist in every single area okay here are some hard questions for consumer if I'm thinking about building a new AI consumer app one is that it feels like historically most consumer has been more power distributed did more winner take all than other markets.

Amazon winner take all pretty much and Google very much winner take all. Social networking very much winner take all. Chat GPT is already on a run to be feels like 90% penetration in that market. And so fintech is honestly one of the only areas that it hasn't exactly been winner take all.

Obviously Kirstson had chime chime IPO. Yeah. where it feels like it feels like we've seen a lot of really smart founders come in and it like the the the base hit the hundred million dollar outcome the billion dollar outcome feels more rare in consumer as opposed to in B2B.

I don't know how real that is, but that's certainly a fear.

Uh then there's also the the fear that there are a lot of consumer companies that are still run by great founders and are and the founders are in founder mode and so you know someone who's running a you know major large consumer company if you're on to something they might come after you.

Uh whereas in B2B you might be able to subslice the market and build some different niche that's underserved and kind of grow a business. Are either of those serious concerns or do you think there's good counterarguments that founders should have top of mind if if they get hit with those questions?

Okay, so on the second one, I'll just start there because it's on my mind with the second one. Like, no, I don't think so. I mean, yes and no, right? There's always competition. I think if you get into business, you should just be getting into competition. Like, and you know what?

If you're going after something worth it, if you're going after something worth the price, there's going to be competition. It's going to come at you from pure startups. It's going to come at you two years from now from another startup that's starting with some out some of the baggage that you have.

And it's going to come from some incumbents.

But I I think that you know there there is a lot to be said for for an a unique insight for a particular point of view on how it gets executed for a particular culture you build at your team and at your company and how you go after it and like that is not that different than in any other space.

There are for every kind of B2B company like in the space. I mean it it is it's open season. There's not five competitors, there's 50 competitors. So get your game on for competition. Yeah. For the other question which was the the power law question. Yeah. Um I Yeah.

And does that also underffect underwriting in the sense that uh like you have to you have to underwrite to with I mean if you're talking about like I don't know most consumer AI companies or most consumer companies I feel like it's either like a zero or a trillion dollars but I don't know if that's the right narrative but that that feels like it would change underwriting maybe as a investor.

I mean, so I I think that as as venture investors, we're all in it for the trillion dollar idea, right? So, you know, I think that we are thinking like what's the big ambition here? What's the big possibility?

Um, if you're an early stage investor, you then better be thinking about like what's the, you know, first act that get going to give you the right to get to the second act. But I think we're not playing for like how do we do an M&A exit in a couple years. Like that's not that's not what this is about.

Um I I I so I don't think that's how we underwrite things ever anyways. I think when you're in the zone of doing those other things, it's because um dynamics have changed or you know like usually it's because dynamics have changed.

And I you know I think that um we have sold companies in in M&A situations and I think that exists in all areas of business. So maybe it's not as prolific in consumer businesses than it is. I I don't know. I haven't really done that analysis cuz I'm here to hopefully build big companies with founders.

Um but you know on the on the power law question um there is definitely like I do think I'm particularly interested in and and venture investors are particularly interested in businesses that have network effects that do have products and experiences that get better with scale that get better with more activity and more engagement and that you know sort of beg that sort of leads you into these businesses that have the self have the the power law dynamics.

But the companies that you mentioned are like the category leadersh that doesn't like there are still big businesses that are adjacent to those categories that are public companies are big standalone companies are successful stories for both founders and teammates and investors.

So you know yeah it's power laws all the way down.

So there's like the the the category leader power law and then there's like market other you know a$20 billion company that's a power law you know within it subcategory there are right so um but you know what I worth mentioning and this is why I started to feel urgency on this topic and igniting the conversation yesterday there's a lot to be said for being first and chatbt proves it for instance y um you know and I don't know if Google actually was the first search I don't think they were but they were pretty close after like it like it is game on right now.

There's going to be opportunities for the next 10 years just like there were in the last cycle and the cycle for the next 20. But like right now is a unique moment in time where like the the the deck is getting shuffled and newness is being created and we still are in the zone.

One of the things we were, you know, hoping to tease out yesterday in conversation and just in general is just like, okay, if you're starting a company today, like challenge yourself to think about the problem or the opportunity you're going after and the technology that you have to play with and build with and work with and what would you what do you bring to life in 2025 with that?

Like instead of thinking about like this is the way we've always done things and now we have this technology and our chatbot can be better or something. So like get out of the zone and think about like a new way to present. And I'm the investor, not the founder.

So don't ask me what the idea is, but I know somebody out there has a bunch of them. Yeah. Yeah. It's interesting. Google was not the first they weren't the first search engine, but they were the first one to implement page rank. So that particular algorithm. Chat GPT was not the first chat bot.

There were, you know, Siri and different, you know, WhatsApp bots that you could kind of, you know, write some business logic around, but they were the first transformerbased chatbot that had been scaled up to a large run, and so they they broke through in that way. I want to talk about distribution for consumer apps.

We're seeing a bunch of interesting things. There's a couple case studies that might be interesting to weave through. One is Lensza, this uh magic avatar app where you could upload a few images and it would make you a superhero or it would it do kind of a generation of your face on an AI avatar.

It was massively popular. They made a ton of money and then it kind of fell off. Um and they and they've kind of changed the business and re revisited that. I think they changed to something that then got kind of smoked by chat GPT. Exactly. Again. Yeah.

So, there's that story and then and then on the other side, you see, but I also don't think they raised very much money. No, I think they probably made a bunch of money.

Um, but uh and then and then I'm we've been tracking a lot of what's happening with Cluey, this viral company that I it's kind of hard to tell if they're consumer or or they're B2B.

the the the Roy Lee the founder seems to be exploring both sides but it's undeniable that he's been great at getting attention and breaking through the very noisy you know startup AI ecosystem uh in in the sense that he will take over the timeline in the way I mean thinking machines raised $2 billion and more people were talking about clearly that day like that is crazy to me um but I mean that that is crazy and honestly like I I think that's smart right so I mean one of the hardest