Two profound things are happening right now for entrepreneurs. First, AI is creating an entirely new set of capabilities for people to build new experiences and solve new problems. In the same way mobile and the cloud unlocked a new canvas for application developers, AI opens what is likely an even more vast universe of possibilities. Second, AI is changing how entrepreneurs build products and businesses. Both of these things combine to make this the most exciting moment in time to build things I've witnessed in my career.
Regarding the latter, I have been thinking a lot about what it means for a startup to be, for lack of better words, “AI-native.” AI-native startups are those that are born in the times when one can do more with meaningfully less people and resources, and embrace the cornucopia of AI tools that empower them to do this. From agents to co-pilots and automated workflows, the way we can build things today is vastly different than just several years ago.
I think of being ai-native as existing on a spectrum between automating everything possible with agents (eg we don’t have a marketer or customer support, we have agents that do those jobs and more) to everyone inside a company embracing tooling to make themselves more than twice as productive than they could have been just years ago.
Here is a good description of two ends of the spectrum as presented by two tweets:
I like these because they provide some explicit examples of what this can mean. I don't think there's one single definition for AI-native, it's a representative style of building companies. And it comes loaded with implications for the future of startups and innovation and the mindset founders assume when building things.
The mental shift is real amongst builders, and it is all about embracing doing more with less, faster. It used to be that a sign of "success" was “blitzscaling,” or rapidly hiring people and growing the size of a company to tackle an opportunity in a hot market. Entrepreneurs were fed endless money to pursue opportunities and hire, hire, hire. There is a reframing happening where this is no longer the sign of success. The ability to stay lean as long as possible and focus on building and shipping instead of hiring big teams is leading to a new ai-native operating model. It’s exciting: do more with less capital and less people. This, of course, is a threat to most VC models, which depend on deploying as much capital as quickly as possible. But builders shouldn't care about VC models when solving problems - they should care about solving the thing as quickly, effectively, and capital-efficiently as possible.
Here's an example of this mentality as expressed by the co-founder of Bountycaster, a two-person team that has gone far and fast:
Founders are capable of doing all sorts of jobs now. I cannot tell you how many experienced entrepreneurs I have spoken with who are so excited to try to build new things and not have to deal with "company building" and people management. The idea that you can now go exponentially further than ever before with a team of 10 people or less used to be the stuff of dreams. This sentiment is burrowing itself in the founder's psyche, particularly those building at the application layer, and it's becoming pervasive. That's a very good thing.
Another great thing about ai-native startups is that they have a structural advantage relative to pre-existing competitors. They are unencumbered by the ways people used to build things and can embrace AI tooling to endow every member of the team with superpowers. In this sense, they are operationally counter-positioned to incumbents in many ways. Incumbents are riddled with layers of management. Managers manage people and get things done through them. That is their profession, and they have no incentive to relinquish those responsibilities and compromise their career. For this reason, large companies will struggle with adopting tools that make them meaningfully more efficient, and their startup competitors will be born with them. This will manifest in their economics and ability to ship and move fast. And that is what matters when building new things.
Every day we are learning more about what it means to be AI-native, and entrepreneurs are unlocking new tools and ideas to push the envelope even further. We are particularly interested in this at USV and are hosting a demo day for founders to show how they build their companies in ai-native ways. If you have an insight you want to share or you want to attend you can reach out to us here on twitter or email me:
It's a new day for founders, and it's incredibly exciting. Building a company will always be very hard, but building a product and a business has never been easier. A new golden age has commenced.
Last week I began to notice what looked like bug bites on my limbs. I asked two dermatologists and ChatGPT what they were, and everyone said they looked like bed bug bites. Shit. My timeline checked out - I went to a big resort in the Bahamas, and it was the kind of place one could imagine people picking up bed bugs and bringing them home (ironically, I told a friend I was going there, and he mentioned he and his family got bed bugs on their last visit).
When it comes to health and bed bugs, I would describe myself as totally neurotic, so naturally, I wanted to make sure they weren’t infesting my home in Brooklyn. People dislike talking about bed bugs because they’re gross and stigma-y. We searched for them in our home but didn't see any trace of them, but I still thought they were certainly there because I was itchy and noticed new bites emerging. So I searched on Google for bed bug detectors and stumbled on the world of K9s who can sniff them out. Obviously, a dog would do the trick and find them and confirm my fears. Plus, one of our friends had a K9 do this before.
Searching for local services on google is tricky. Looking for restaurants is fine, one can usually cross-reference places with reviews and articles, but local services are another story. It's difficult to triangulate what is real on google reviews, yelp, and elsewhere. And when you are searching for things that are psychologically urgent and scary or uncomfortable, like bed bug inspections, the internet is an excellent place for scammers to take advantage of people.
So I clicked on a couple of different services that looked legitimate and ultimately ended up texting with a K9 dog service. I paid them and they sent a dog to our home that walked through it in five minutes, was promptly given a treat, pawed at our bed and only our bed, and then left. A minute later I got a call from the service saying "We got the report and your room definitely has bed bugs and let's get you some quotes from exterminators we work with." They mentioned they could pass through discounted rates. They called back in 30 minutes with a quote. I asked for the other quotes and names of companies because my spidey senses were beginning to scream "Scam." Then things got sketchy. The companies didn't have any internet presence. What I could find was a series of LLCs all tying back to the same address, a bunch of reviews that looked "off," shared last names across the various business operators, and a web of SEO-optimized bed bugs websites all operated by the same team. I confronted the person I was speaking with about all of this and they surprisingly admitted to everything and that this was just the way bed bug business was done.
This was very discomforting but not surprising to me at all. These types of entanglements are common in small businesses and large. It reminded me of the recent Hindenburg Research report about Carvana that told a story about a web of interconnected businesses and self-dealings. When it comes to these types of things you don't want to feel like you are being scammed and lied to. Whether it's seeing if you have bed bugs, buying or selling a car, or investing in a public company, you want to work with people you can trust. However, the platforms we use to discover things are easily gamed and make it easy for companies large and small to program us to believe or behave in a certain way.
Self-dealing and misleading and taking advantage of people in business are not uncommon. Incentives drive behavior, and unfortunately, a lot of businesses large and small do not care about their customers. They care about making money. Sometimes that means running scams and saying you have bed bugs and need to treat them today even when you don't have them. Sometimes that means letting customers get fleeced with no recourse.
One problem is that in certain categories like local services it's really difficult to understand if a business truly cares about its customers or not. I consider my ability to navigate the internet somewhat sophisticatedly to be above average, and I almost completely fell for this scam. It's hard to imagine how many people have been taken advantage of by services like this in times of need. And it's especially top of mind right now as people in Los Angeles flee their homes and figure out their lives after this disaster. Couple that with the ability for AI to empower scammers to flood the zone with fake information and it's a recipe for a crisis in trust and truth.
This week at USV we were discussing how people have always been programmed by the media and technology for ages, and how it now feels like there is a growing realization and awakening that this has been happening. As a result, we are beginning to question this programming and ask "Why?" more often. Why am I seeing this? Is this real? Can I trust it? What is the motivation behind the thing?
The crisis of trust on the internet is exploding, and we need solutions in every nook and cranny of it. How do we make sure reviews of local businesses and service providers are real? Is it possible? Is the only solution referral networks? How do we gauge the authenticity of those? Will it be too difficult to institute global solutions (e.g., platforms like Google and Angie's List are gamed and compromised), and therefore, everything must be local and more tight-knit (e.g., a local blog or trusted listserv)? To scale do things need to get small and trusted again? Can new networks or technologies solve these problems? How do we know what is real and who or what we can trust? I want to see and understand more of the unique ways to tackle these issues.
For now, I suppose, what we can do is remember that the information we consume comes from somewhere and through something, and that those things have their own incentives and vulnerabilities. We should continue to ask ourselves the question "Why?" and ingest it all with a healthy dose of inquisitiveness.
P.S. The working hypothesis is that the "bites" are a viral rash, and if you want a trusted bed bug inspector and exterminator I highly recommend John Furman in Brooklyn and Michael Fleck in Ulster County. They gave me peace of mind that we are devoid of bed bugs and delivered my favorite line of this saga: "With that many "bites" Stevie Wonder could find your bugs."
Every year I try to write down my goals for what I want to accomplish. I've been doing this for a while but forgot to do it in 2024. I regret not writing them down last year, but c'est la vie.
I frame them with a regret minimization framework that I stole from someone else and like to use:
By the time I'm 80 years old, I won't regret having spent an abundance of quality time with my family, having read and retained the learnings of terrific books and being knowledgeable about the world (both the way things work and why they work that way), knowing myself and what makes me truly happy, having traveled and explored the world to my heart’s liking, spending time in nature, feeling like I’ve made people’s lives better and contributed to civilizational progress through my professional endeavors, and investing in the relationships that matter most with friends and family.
Ambitious, but why not? Also loaded with cliches, but they're cliches for a reason.
And here is where I am netting out for the year for my personal goals:
I set a reminder for July 1 to check in on these and see how they're going. I hope to update my progress here then to keep myself honest.
Happy new year and I hope you find it meaningful and filled with progress.
