The Best Products Will Collect Data in the Most Fun Ways #0047

"We're getting data in fun ways now. It's like playing a video game where the final boss is your own privacy settings."

31/01/2024

The Best Products Will Collect Data in the Most Fun Ways

Rebecca Kaden, Managing Partner at Union Square Ventures, highlights the emerging trend of personalization in consumer AI products, emphasizing the importance of data collection methods that are seamless, enjoyable, and user-centric in “Training the Weird”

• Entering a New Age of AI-Enhanced Consumer Products:

  • "We are entering a new age of consumer fun and function. AI is going to supercharge both the utility and entertainment of consumer products, introducing new form factors and experiences that feel made for me."

• The Next Generation of Breakout Software Will Be Tailor-Made for Our Own Needs:

  • "Models trained on our own data and tailor-made for our own needs will shape this next generation of breakout software. Whatever the specific use case– social networks, games, chiefs of staff, personal stylists, study companions, romantic relationships, financial advisors, healthcare co-captains–the ability to quickly ingest our data with enough signal and scale to seamlessly personalize results is a critical step."

• When Data Collection is Tedious Less is Collected:

  • "Getting users to do setup 'work' has generally been difficult, even when that work may pay off. The web is littered with abandoned carts from sign up pages full of fields. Netflix learned early on that tailoring the algorithm off of what we watch, even if that means initially the content isn’t as personalized, is a better approach than keeping that tedious preference funnel they started with."

• The best new products will collect the most data in the most fun and novel ways:

  • "Make collecting training data super fun, repeatable, and useful so the 'investment' feels both 'buttery' and like utility... The best new products will invent new forms of engagement to collect the most and highest quality data in the most fun and novel ways."

Build a Company by Eating Someone Else’s

Santi Subotovsky, and Jessica Cohen, General Partner and associate at Emergence Capital aim to shift the entrepreneurial focus from creating new categories to disrupting existing ones in “Category Takeover: The New Wedges for Beating Incumbents”

• Challenge Complacent Incumbents Instead of Creating New Categories:

  • "For years, advice to founders and entrepreneurs looking to create iconic companies has been to create their own category... Ultimately, we believe that creating a new category is not the only (or the best) path to building an iconic, enduring company. In fact, we’d argue that challenging complacent incumbents is a stronger strategy."

• Leverage Customer Obsession in Established Markets:

  • "Customer obsession: As incumbents dominate a category, they pay less attention to the end user and work to protect their contracts, including other stakeholders. This ends up diluting the value they deliver to those actually using the solution. As a result, in these categories, the NPS tends to be really low when measured at the end-user level."

• Capitalize on the Founder-Led Leadership Advantage:

  • "Company leadership: These large incumbents are generally led by executives, not founders, and these executives lack the irrational obsession that founders have when they decide to start a company."

• Focus on Agile and Responsive Product Development:

  • "Product focus: Product cycles in large companies are designed to please and appease Wall Street and other financial stakeholders, resulting in overly cautious and slow product development cycles."

• Adopt a Customer-Centric Sales Approach:

  • "Sales motion: Incumbents are under pressure to deliver numbers, and that trickles down through the entire organization. This forces sales teams to find and close deals at all costs, vs. closing the right deals, which results in unhappy customers with products not designed to solve their business problems."

• Optimize User Experience and User Interface:

  • "UX/UI: As companies expand their customer base, they get trapped with their original UX/UI and as a result, end up adding instead of optimizing. Ultimately these UX/UI become so clunky that people use them just because they've been using them for a long time."

• Embrace AI as a Key Disruptive Tool:

  • "AI: Incumbents were not built with an AI mindset. They are now trying to bolt on AI to be able to tell a story, and this is the category we believe creates the high leverage point for new entrants with AI engines to disrupt these incumbents... we believe AI is an even bigger leverage to disrupt some of these entrenched incumbents."

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