Kirsten Green, a managing partner at Forerunner Ventures who built her career investing early in consumer startups like wellness device maker Oura and grooming retailer Dollar Shave Club and has raised billions of dollars, said the growing consumer base of choices is creating big opportunities for AI companies.
“We’ve reached peak access… people are feeling overwhelmed or burdened by the level of information and hyper-connectivity that they have,” Green said onstage. luckThe announcement will be made on Tuesday at the Brainstorm Tech Conference in Park City, Utah. “Generation AI is Here.”
Forerunner Ventures’ survey of consumers found that the majority (82%) believe generative AI will “make their lives easier,” and as such, the big opportunity for generative AI developers lies in creating businesses based in consumer-centric sectors such as e-commerce, fintech, health, hospitality, social and sustainability, the firm said.
Venture capitalists seem to generally agree that AI has great potential, with AI startups commanding eye-popping valuations. For example, as Green said at the conference: Financial Times WorldLab, a four-month-old AI company founded by Stanford University computer scientist Fei-Fei Li, has reportedly raised $100 million from investors including Andreessen Horowitz, reaching a valuation of $1 billion.
But AI companies face many challenges: their success depends on consumers believing and relying on the information the technology provides, which means founders need to forge relationships with customers that go much deeper than the relationships you might have with a razor or beauty company, building a level of trust.
Green, whose other investments include suitcase retailer Away, eyewear retailer Warby Parker and cosmetics retailer Glossier, acknowledges this, but adds: AI founders have a bigger challenge than other companies, Green says, given the plethora of negative news headlines about tech failures. Founders should overcome the bad press by “being realistic” and “meeting a need,” and accept the risk of “disappointing” users, Green suggests.
And yet, crazier things are happening in the tech world than outsourcing your email writing and calculus homework to an AI chatbot.
“Remember how foreign and unimaginable it felt to get into a stranger’s car or stay at someone’s house?” Green asked. “We’ve obviously moved past those fears.”
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