The end of consumer startups?
We cannot abandon everyday tech to AI
I read something last week in Lenny Rachitsky’s popular product newsletter that stopped me dead in my tracks. Y Combinator—whose biggest wins include consumer giants like Airbnb, DoorDash and Instacart—has largely abandoned funding consumer startups. Their stunning rationale?
"Most of the large consumer apps have already been invented." 🤯
Think about what that means: The everyday experiences we have today with entertainment, health, music, travel, learning, food, mobility, energy, payments, socialization are all defined. Done, unchangeable. These realms of daily life are supposedly locked to innovation—impossible to wrest from the control of a few dominant companies.
Our lives are not static, neither can the everyday consumer technology we use afford to be.
Declaring an end to new consumer technology is confusing what is difficult to imagine with what is impossible.
Way back in 2005, Rupert Murdoch probably thought he had pulled off quite the coup in acquiring MySpace for $500 million. MySpace was the most popular website in the world, and assumed to be the owner of the golden moat that would come called the social graph. Facebook and YouTube shredded its dominance in just a couple of years. Our judgement may be clouded by the way a few platforms dominate attention. However, I am all but certain our great-grandchildren will not be watching TikTok.
Imagine what would be missing from our world if all our brilliant minds back then had looked at MySpace and capitulated control. Far worse, imagine the havoc of a world where the shredder is not a human organization, but an autonomous AI.
To me, this position of saying nothing new can be created is a dangerous retreat: As tinkerers, founders, investors, it’s like we are taking both hands off the steering wheel of technology in our everyday life.
Control? What control?
So, have we abandoned all efforts to steer consumer technology?
A peek at iOS Control Center might give one answer: This screen is the culmination of 17 years of intensive development. Our human needs are all there: the joy of music, the spark of personal connection, dials on our physical environment, memories to capture and to relive, the relief-entertainment-numbing of video, and even one of the oldest technologies: manmade light.
Behold the madhouse of buttons and widgets and sliders and text, each with further layers of nested options upon options! Tap any and you are setting in motion the work of a dozen custom chipsets and hundreds of interlocked, networked services. The majority of humans on Earth navigate these glyph-polluted waters dozens of times a day.
It’s easy to take potshots at the interface design itself, a profusion of baubles. Yet most use this screen so often, the visual presentation is more of a guitar fret for the mind guiding subconscious finger movements than a classic visual UI. The design it not the problem.
What disturbs me is the evident disinterest in actual control. The “Focus” button, with an array of fine-grained sub-controls beneath it, feels like a cruel joke. This is not a place for steering our technology towards opinionated and meaningful goals. It is a place where phones come to steer us.
Control Center is a sign of the growing abandonment of human control of our everyday experience.
Consumer ain’t dead yet
Technology already defines so much of our everyday lives.
But technology is not (yet) traveling alone, like a brakeless, ever-accelerating car. Humans designed that car; we certainly ought to keep a hand on the wheel.
Many in our own industry seem to be infected with a kind of nihilism that makes them want to give up all control to the tech itself. They not-so-secretly hope to invent the AGI that consumes much of everyday human economies. The lucre of potential inevitability draws them in.
I believe nothing about technology is inevitable. Yes, tech has a life of its own. There is an organicity that goes far beyond tools. Yet, like all life, tech is deeply interdependent with humanity and with the earth.
Many pioneers in AI have expressed surprise that its largest impacts so far have come not in chip design (though that’s changing) or drug research, but written and visual communication. I am not so shocked: visual decoding and communication are far higher priority in our own biology than scientific abstraction. AI systems are modeled on that very biology and run on chips expressly designed to rapidly solve visual problems.
With the very way we communicate now being altered, how could the fundamental markets for “consumer apps” not radically change too? How could new inventions, new startups, new ideas not even try to reshape what is possible in our human everyday?
AGI, if it is possible, when it is possible, whatever it may be, will participate in the gradient of life alongside human and non-human ecosystems. It will be part of our social world, not outside of it. So we better help shape it.
We cannot give up on the everyday part of the equation, on consumer technology. There are futures where technology helps us steer human endeavor towards harmony, towards creativity, towards regeneration.
Being happy with how phones work today is like being happy with Oreos being our only source of food forever. To abandon the idea that we can control technology is to abdicate responsibility for own future. I know many brilliant founders are not falling for this trap, and I love those rare humans are trying to invent new consumer technologies.
All of the important everyday consumer technologies have absolutely not been invented. But if we abandon control, they will be invented by machines whose interests may only faintly align with ours.
"Most of the large consumer apps have already been invented."
Hah, that is absurd. Hard to believe this is their real reason for backing out of the space. It's like saying we already have great music in every genre, there is no need for more music. Truth is, the world keeps changing, and startups can usually maneuver faster. Meanwhile, later-stage venture capital pressures — and private equity — continue to enshittify existing apps, making even more room in the market for the next startup.
That said, I do think it's very difficult to successfully scale up a consumer app without losing the kernel of greatness that brought it into being in the first place.
Wonderful piece. We at Lubbu are precisely what you're writing about -- an AI-assisted, next-generation, lifetime shopping, and gifting registry -- AND we're waiting to hear if we are accepted into YC's Spring 2025 Batch. However, the acceptance rate is lower than getting accepted into Harvard, and we're a consumer startup. YC is our BHAG, and if we don't get in, we just take a different path for success, and use this time as part of our origin story. Grateful for you.