Forerunner Ventures managing partner Kirsten Green has made a career—and raised billions of dollars—by investing early in consumer startups like health device maker Oura and grooming product retailer Dollar Shave Club. Now, Green says the growing number of consumer-based options has created a massive opportunity for AI companies.
“We’ve reached peak access…people are feeling overwhelmed, if not burdened, by the level of information and hyperconnectivity they have,” Green said on stage at Fortune’s Brainstorm Tech conference in Park City, Utah on Tuesday. “Enter gen AI.”
In a survey of consumers, Forerunner Ventures found a vast majority (82%) believes generative AI will “make life easier.” Big opportunities for gen AI builders, therefore, lie in creating businesses based on consumer-focused sectors including ecommerce, fintech, health, services, social, and sustainability, the firm said.
Venture capitalists, in general, seem to agree that AI has a big future as AI startups nab eye-popping valuations. For example, as Green spoke at the conference, the Financial Times reported that Stanford University computer scientist Fei-Fei Li’s four-month-old AI company World Labs was valued at $1 billion by investors like Andreessen Horowitz after raising $100 million.
That said, AI companies’ have many challenges. Their success relies on consumers believing, and relying on, the information the technology delivers. This means that founders need to build relationships with customers that go far deeper than the ones they have with, say, razor or cosmetics companies, and create a level of trust.
Green, who has also invested in luggage retailer Away, eyewear retailer Warby Parker, and cosmetics retailer Glossier, acknowledges this, and adds to it. She says AI founders have greater challenges than others considering all the negative news headlines about tech failures. She suggests founders’ overcome the bad PR by “being realistic” and “satisfying a need,” while acknowledging the risk of “disappointing” users.
Still, crazier things have happened in tech than outsourcing email writing and calculus homework to AI chatbots.
“Remember how foreign or even inconceivable it felt to get in a stranger’s car or to stay in someone’s house?” asks Green. “We’ve clearly moved beyond those fears.”
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