The Consumer Renaissance

🌈 Abstract

The article discusses the renaissance happening in consumer technology, arguing that it is a compelling place to build and invest. It analyzes the data on consumer spending and the performance of consumer tech startups compared to enterprise startups. The article also highlights three categories of consumer tech that the author is particularly interested in: AI applications, shopping, and consumer health.

🙋 Q&A

[01] Checking in on Consumer Spend

1. What does the data show about consumer spending?

• Despite voter sentiment about the economy, consumer spending remains strong, with credit and debit card spending rising 5.9% in 2022 and continuing to increase in 2023.
• The data shows that consumer spending has been steadily rising over the past few years, rebounding from the COVID-19 dip in 2020.
• The article argues that in venture capital, we shouldn't pay too much attention to short-term fluctuations in consumer spend, as the long-term trajectory will continue to climb up-and-to-the-right.

[02] Consumer Tech: The Data Doesn't Lie

1. How do consumer startups compare to enterprise startups in terms of going public?

• According to the data analyzed by Forerunner, consumer companies are more likely to go public if they've raised a Series B, and 18.8% of consumer companies that went public did so at a valuation of more than $10B, nearly double the 9.6% rate for enterprise companies.
• The article expects the next few years to yield more strong consumer outcomes, citing examples like Canva, SHEIN, Revolut, Faire, Chime, and Discord.

[03] What to Watch: AI Applications

1. What are some interesting AI consumer apps emerging?

• Amori is using large language models (LLMs) to power AI matchmakers for dating.
• Can of Soup is building a new social network around AI-generated images.
• Suno has raised $125M for AI-generated music, and Perplexity is in talks to raise $250M to take on Google in search.
• The article is particularly excited about AI-powered avatars, such as Praktika's language learning platform with real-time, smart avatars.
• The author expects a major shake-up in consumer internet due to the impact of AI, as it rewrites the playbook and makes established players vulnerable to the Innovator's Dilemma.

[04] What to Watch: Shopping

1. What insights does the article provide about the shopping category?

• This section will be covered in Part II of the article.

[05] What to Watch: Consumer Health

1. What insights does the article provide about the consumer health category?

• This section will be covered in Part II of the article.

[06] Rule of Thumb: Follow the Spend

1. What insights does the article provide about following consumer spending patterns?

• This section will be covered in Part II of the article.