Brian Balfour: evaluation

Transcript context

…Okay, so let's talk ChatGPT. Look, let's go through this cycle. Right now we're in that competitive environment. Like we said, all those players we talked about, ChatGPT, Claude, Gemini, all these folks, they are battling it out. We've seen this with the Talent Awards especially over the past month or so. There's no clear winner yet, but there's consensus around the category. The second thing is then, okay, what's the moat? Has the moat been identified? And who seems to have identified it the first or as furthest along? My hypothesis, and I think there's a lot more consensus around this now than there might've even been three months ago, is that the moat is about context and memory. These models by themselves, if you compare them side by side, they generate the same result, and so the actual difference-maker is which one has more of your context, because it's the context plus the model that produces the best output, and then that starts to accrue to this loop around memory. The more you use it, the more it's able to store a memory around you, which feeds more personalized context, which produces better outputs. It ends up being another one of those flywheels, another one of those loops. If you look at who's farthest on this, it definitely is ChatGPT. They were the first ones to memory. They've been investing a lot in these different types of data connectors, essentially context connectors, gathering all of this context, so you can really start to see it in the usage. The second thing is, and one of the pushbacks I've gotten on my prediction has been, well, what about Google and Gemini? They have so much distribution through Chrome and all of this other stuff. Deedy Das, who's a VC at Menlo Ventures, actually published some good data on retention of all of these different ones. I think the second reason I predict ChatGPT is if you look at history once again, it was never the person who had the biggest distribution at the moment of time. It was the one that had the best retention and engagement. Google had the best retention and engagement over the others. Facebook was smaller, but had way better retention and engagement over the others, so on and so forth. The data that Deedy published clearly show that both the retention curves, which I know you and I have both written about at exhaustion, level off at significant portions higher than all the other platforms, as well as those retention curves have been shifting up dramatically over time, you can start to see the effects of memory. They have the very elusive smile curve, the ones that you just like. I've seen all of those dynamics very few times in my career, and they tend to be the folks like Slack and all of the big winners. It's just so elusive The smile curve, just to people who don't know what that is, is essentially retention goes up over time, it goes down a little bit, and then you come back to it and you use it more.…

Stored transcript either side of the excerpt. The highlighted words are the published quote; the surrounding text is unedited source, never generated.