Consumer AI Startups Face Growing Pains Amid Skepticism from VCs

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Consumer AI Startups Face Growing Pains Amid Skepticism from VCs

Marina Temkin is TechCrunch’s venture capital and startups reporter. She came on to discuss the hurdles that new consumer AI startups encounter trying to find a place in a crowded market. As these startups graduate, industry insiders are clearly still dubious about their staying power. More importantly, they doubt these companies’ abilities to develop workable or desirable applications that will really engage consumers.

Elizabeth Weil, founder and partner at Scribble Ventures, expressed her doubts regarding the rise of several stealthy AI-powered social network startups. She fears these platforms will fall short of fulfilling the spirit of the users’ needs. Perhaps surprisingly, given the roadblocks that lie ahead, Weil is positive about the future of the personalized tech. An “always-on” tutor, which can send personalized learning right to a smartphone, is something that she expects will someday go the way of the blackboard.

Chien, a former Google self-driving car policy head and further AI applications visionary, agreed that most early video, audio, and photography-based AI applications have proven successful. He thought that the applications were super cool. He cautioned that smartphones can only be pushed so far in order to reimagine consumer AI products. As Chien explained, smartphones just aren’t ambient devices, limiting their capacity to deliver frictionless user experiences.

Chien dove deeper into the development of consumer AI products. He also shared that businesses are now creating these digital environments where different AI bot faces are going to be interacting with your user-created content. Another possible use case would be a personal AI financial adviser customized to each user. This concept echoes past innovations. To illustrate the AI boom, Chien compared existing generative AI offerings to the third-party flashlight app fad. After the iPhone’s debut in 2008, those apps gradually became baked into iOS itself.

Looking back on the timeline for consumer technology, Chien reminisced. As he described, it took three years for the smartphone platform to mature enough that major apps could start creating real value. Like Collins, he thinks AI platforms require a comparable time of “stabilization” for permanent consumer products to prevail.

Weil characterized the early stage of consumer AI applications as an “awkward teenage middle ground.” This quip demonstrates the danger and unpredictability of these technologies. They are hoping to become the next “big thing” in an arena shifting almost overnight.

Chien underscored the limitations of existing devices in harnessing AI’s full potential, remarking, “It’s unlikely that a device that you pick up 500 times a day but only sees 3% to 5% of what you see is going to be what ultimately introduces the use cases that take full advantage of AI’s capabilities.”

As these conversations continue, Temkin is open to engagement and fact-checking. You can email her at marina.temkin@techcrunch.com or message her with Signal encryption at +1 347-683-3909.

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