Lenny Rachitsky: prediction

Transcript context

…Well, I think it's really interesting in terms of the examples that you just shared of TikTok and threads, because you just shared two examples of people who figured out distribution. And I think that that's actually one of the hardest things to figure out in consumer technology today. We were so fortunate when we created Snapchat, the mobile phone and the app store were just getting started. So people were downloading lots of new apps all the time. They were really excited about trying new services. Instagram, I think it started a year before Snapchat or something like that. So there was a real appetite to try new apps and new services. And that's not the case today. It's a lot harder to get distribution for new ideas and new services. People aren't downloading as many apps now as they used to. And both TikTok and Threads figured out distribution, which is why I think there are more recent examples of success. TikTok did it with money, which I actually thought was really innovative. They spent billions of dollars subsidizing both sides of their video marketplace, acquiring customers to watch videos and then paying creators to make videos. And so they were able to bootstrap their ecosystem. And I think with Threads, obviously, they were able to leverage the amazing distribution that Meta has across all of their other products. So I think so much of consumer technology focuses on, am I building the right product? Do I have product market fit? Have I built something that's really going to resonate with customers that they're really going to want to use all the time? And I think people don't spend nearly enough time thinking about distribution and figuring out distribution. And that seems to me to be a huge differentiator. So as I reflect on the early days of building Snapchat, the thing that we figured out in terms of distribution, especially when it comes to social, was that back then people believed that there were network effects and social networks that meant that the more people you had using the service, the stickier that it is. And so there was no way to beat the biggest networks because those were the most valuable. And what Snapchat figured out that was, I think, different was that despite the fact that there were much bigger networks that connected more people, what really mattered was connecting you to the right people. And so if you could just connect someone, not to all their friends, but to their best friend, to their partner, to their spouse, the people that they cared most about in the world, that's where the majority of the value is in the network. And so that's what really allowed us to grow in those early days. We had the benefit of the app store and mobile distribution, but we also had a different way of growing our service, which wasn't about having the most friends. It was about having your close friends. That is so interesting. It's something that I've been thinking a lot about actually, this idea of distribution, because of AI. If you think about just where AI has come into the market, it started originally just like helping people auto complete code. There's something I've been talking about a lot on this podcast. So it's like, okay, auto-complete code. Okay, now it's writing all our code. Okay. Now it's reviewing our code and now it's testing itself and now it's going to help us come up with ideas. So it's like starting in the middle of the product development process and expanding out. And I feel like it will be very good at coming up with great ideas and developing strategy. It's going up, I don't know, the funnel or the timeline of building a product. And I feel like distribution is where it ends up being, what ends up being the new moat and the new biggest challenge because AI is not going to really help you there. So it's really interesting that that's even more so true for consumer products. No, I think that's absolutely the case. And the only thing I would say is the most exciting times in technology are when there are new platforms that get created. And that tends to be where a lot of the value comes from. You think about a lot of the big consumer technology companies today, they were really born out of mobile, whether it's Uber, Snapchat, some of those early generation companies that really got distribution and built themselves on mobile. And so I think as we look forward to these next generation form factors, things like glasses, there's going to be a whole new set of opportunities and a whole new surface for people to build generational consumer companies. And I'm really excited about that.…

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