Tech Brew Ride Home - (Bonus) - The Future of Video With A16Z's Connie Chan

Episode Date: December 12, 2020

Connie Chan, from Andreessen Horowitz, talking about: Live, Social, and Shoppable: The Future of Video Sponsors: VistaPrint.com/techmeme TinyCapital.com Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to another weekend bonus episode of the Tech Meme Right Home. I'm Brian McCullough. Did you all do your homework? I'm just kidding, of course. But we are going to talk to the great Connie Chan once again about that package of essays from Andresen Horowitz that I mentioned on the weekend long reads yesterday. And we're going to talk about the future of video. Connie says it's going to be live, social, and shoppable. Oh, and a reminder to maybe watch this on our YouTube channel to up our numbers a bit. Please enjoy. Connie, I was just saying you basically seated my weekend long read segment for this week. The whole, we're on a whole, I guess the package that you all put out is about social not being dead or at least not being completely, you know, completely, you know, claimed at this point.

Can we just start with the premise of these essays that while people think social was basically done, that, you know, big platforms had locked it all up, But you guys are positing the exact opposite almost. Yes, yes. I think there was a phase in a time when a lot of investors felt we already have Instagram, we already have Snap. There isn't going to be a new social player. And we are exactly like you're saying, Brian, arguing the opposite. Because we actually still think there's a lot of problems and jobs to be done in social

that are not addressed today. There are also new formats around video, around audio, where we think there's still a lot more experimentation to be done. And if you think about social, I think, you know, one very narrow definition of social is it's capturing the people you already know. But the reality is social just means you're interacting with another human being. And so there's a whole wide universe of platforms that have yet to be built to help you meet other people maybe that you don't know as well, or you're maybe just acquaintances with, that you'd actually have a fantastic relationship if you had great interaction. So maybe is it fair to say maybe the social graph has been locked out in terms of we've mapped out all of our relationships.

But what you're saying is this new type of social is going beyond that and basically ways that aren't actually lining up to a graph. It's digitizing the rest of our human interaction, right? Actually, like the people I call most frequently don't necessarily map to the same people I heart on Instagram, which don't necessarily map to the same people. I heart on Instagram, which don't necessarily map to the same people I'm messaging on LinkedIn. And so we as human beings have multiple identities and different social graphs. And right now, I still believe there's a lot of our graphs and interactions that are not yet digitized. So maybe it would help if we mentioned some for framing purposes. Like you're saying new types of social.

So like name some of these apps or services that are these new types that you're talking about. Yeah, I mean, well, for example, in the audio space, Clubhouse is a new way you can engage and meet with people that you haven't met in the past. And maybe you don't even know. But you get together because you have a shared interest and a topic and you learn about each other and you can become friends with each other. You know, in the video space, TikTok, I think, has taken the country by storm and continues to grow because it is also. introducing you to new content creators and new people you wouldn't have followed otherwise. Right. There's that Eugene Way idea of it's not about followers so much as it's this new, you're able to surface new ideas and new people in different ways beyond just again mapping to a social

graph. Yes, yes, because the idea that my friends know exactly what I want to buy, what I want to eat, what I want to do next, I think is just a flawed premise. Actually, when I, when I buy things, I don't actually ask my closest friends for the recommendations. Because most of the time I'm buying completely different things. I actually trust, even though I know the reviews aren't 100% accurate, I trust the Amazon reviews more so when I'm shopping for, say, a baby product than just asking one or two friends because you have the wisdom of the masses. You have more people engaging in that conversation.

And that was the other interesting thing reading all of the essays. like basically you're positing that having a social component can be plugged in for all sorts of uses now, like a retention tool. You can use it for education, shopping, fitness, food, entertainment, everything. So again, maybe if we've always, from the beginning of the web era, been like, well, you can have commerce as a component of whatever your platform does. It's almost now the inverse is that you can have social be a component of whatever you're doing, be it education, be it commerce, be it whatever.

So, I mean, social at the end of the day just means you're interacting with someone. And that whole idea of social puts exactly what you're saying. My partner, Darcy, wrote a great piece on that. And I do believe that social can be embedded across the board, especially in anything where you are watching content, interacting with other viewers, interacting with the creator, or maybe you're doing something that's interactive to begin with, such as education and you're interacting with a teacher and other students.

You know, reading the whole suite of essays, it made me think that, yeah, it not only is social not dead, but we're kind of seeing like a weird resurgence right now in everything. Because if you think, like, you know, Peloton has a social element that they're starting to build out. Like we've been hearing so much about, like, in gaming, like, Fortnite and Roblox and Among us, even. You're mentioning, like, Clubhouse, but House party also in messaging and things like Yeah. Did you have any idea why, now that I see it, that it is, there's almost a resurgence. Do you have any idea why we're seeing this resurgence right now? Like what changes technically or culturally have happened that have led to this resurgence?

You know, I think we were always going to get here, get here to this moment. And it just took us a little while to get to this realization that social really does two wonderful things for companies. One is it's very fun. And so you talk about like Among Us, games, this makes doing whatever you're doing more fun. It makes it more game-like. It has leaderboards, right? Like with Peloton, when you can see how your friends are interacting with Peloton, it's the motivating factor for you to exercise. And that's really key. So social can actually get someone to be more engaged in the long term and more likely to use the product than if it was a completely solo single-player experience. The natural fun thing creates the competition, it creates the motivation, and it just makes something that's inherently not necessarily fun, a lot more game-like.

And so I believe that social naturally will help products have basically longer retention. And then the second piece that social really unlocks is virality and growth. Because right now we're hitting a point where people are more hesitant to download a new app. You have to have a very strong value proposition to get me to download a new application now. Right. And then companies are realizing, hey, rather than just buying ads all over the place, can I build in some virality more social hooks so that my users have an incentive to share it with their friends, so that my users have an incentive to post it on their Instagram.

Well, and this is from one of the pieces. I can't remember who wrote this one in the page, but there's also with social generally, the scale can be huge, even if you get like a small slice of a, like a niche or an interest topic or things like that. I think that with just 1% share of active users, Tinder claims well over 5 million daily active users

and brings in a billion dollars a year in revenue from that. So that's not the billion scale. That's only 5 million, but that can still generate a billion dollars in revenue just from that sliver. Well, I think it's because social at the end of the day is interactive, which means you're emotional. You're not just interacting with algorithms. You're interacting with actual humans on the other side.

And once you bring in the element of emotion, there's all kinds of things people are willing to pay for, right? You're willing to pay to get notice. You're willing to pay to flatter someone. You're willing to pay to flirt. You're willing to buy status. whatever it is, the willingness to interact with a platform, you know, at a much deeper scale increases when you feel like you're actually building relationships with human beings on the other side.

Well, and that was another key takeaway for me is that you're distinguishing between, like, we think of engagement all of this time as, well, right, I open Instagram 20, 30 times a day. That's the addiction of certain types of apps and things like that. But there's a difference between, like, that sort of engagement and, like, absorption. Like, you can also with social have apps that maybe you don't open them every day, but when you do, you engage with them for hours at a time. Like, we've, again, we're seeing this a lot in gaming, but, like, that is also, there's more of a quality sort of thing that we're talking about here than just the quantity and the scale.

Totally. And I think part of it is some social companies, like you alluded, if they focus on just a niche there's actually a higher chance that it will resonate with one of my identities that I will personally say I identify with, right? Maybe I feel like I'm a trendsetter. Maybe I am a collector. Maybe I'm a DIY crafter. Maybe I'm a deal hunter, whatever it is.

You have these new communities, social communities that really make me feel included and make me feel like that part of my identity can shine. And I think that's also a reason why the incumbents, quite honestly, will have to figure out how to navigate this new world. Because humans, we have multiple identities. And a lot of these existing social platforms don't make it easy for you to share all parts of yourself. Right. Like if I have a YouTube channel, maybe I talk about tech, hey, I really love singing in karaoke.

I can't put that in the same channel, right? Or maybe on Twitter, I talk a lot about inspiration and innovation coming out of Asia and international. but I have a whole bunch of thoughts around parenting or whatever else it is. And I can't put that in the same Twitter feed even, right? Because a lot of these existing platforms, in order for you to kind of really develop your following, you kind of have to choose one or two identities, maybe two max, and really just go deep on that.

It's very hard to find a platform that allows you to develop all these parts of yourself. And I think that's actually the opportunity. Let's dive into your essay specifically, because you're looking at video as a platform in this lens, and at the risk of putting words in your mouth. I'd roughly summarize your thesis as, like, in this new video era of TikTok, like you go through the history of, like, you know, TV is just a lean back engagement. Then YouTube came in and said, well, it can be a one-minute video or a 24-hour video or whatever. And now TikTok is like, well, it can be a 15-7.

You know, like, yeah, yeah. So now interactivity is baked in also with TikTok. It's not lean back. So this opens up a whole world of possibilities for education, shopping, the whole lot. So tell me about this. Like, how does this open up new vistas in this engaged sort of TikTok video world? Yeah, totally. I would say if I had to, you know, if I had to summarize the essay in one sentence,

I would say video historically was something exactly like you said, right? We used to lean back and watch it. And now video is going to be something that we do, which means you are interacting with it in some way. You are responding to it. In the same way that when you're gaming, we kind of hate the cutscenes in gaming because we can't be involved in it. Like you're saying that video can be engaging all the time like gaming has been. Yes. Yes. All right. I interrupt it. Go ahead.

Exactly. Exactly. And that engagement means it can disrupt everything. every kind of normal human interaction that we had in the offline world, I'm saying video is going to develop new features so that all those human interactions can work just as well, if not better, in an online world. And you pointed out that this was happening even before COVID hit because streaming had been rising, you know, going back even five years, six years or whatever.

I'm sure COVID had helped. But like, so again, you feel like that this is a moment that we were building towards and we're going to hit eventually. I, yes, 100%. I do think this was a moment we were going to hit no matter what. Now, of course, everyone knows how do you Zoom. I think a lot of people bought webcams, a lot of people bought tablets, whatever it is. So people, yes, now have more of the hardware equipment they need to kind of enter this new era.

But I don't think it ultimately changes that we were going to get here anyways, because video is just another way for you to interact with another human. And rather than just reading about something or listening about something, you actually can see the person. And so naturally, videos more fun. It makes everything more fun, right? If I am just even right now, as we're recording this podcast, if I did this just by audio and I couldn't see you in your cool purple shirt, it would not be as fun. Right. But I see you and I see your background moving and I see your microphone set up and I feel like I'm talking to you in a completely. different way than just a normal phone call. And so video brings things alive and it makes things more fun. And again, going back to why social is powerful, social is more fun. And in the end state, I do think everything has to be more fun. Because if I can choose between a fun education platform and a not fun one, I'm definitely choosing the fun one. If I can choose between a fun finance app or a

not fun finance app, I'm choosing the fun one. And a lot of it is because fun gives us the most motivation to do the things that we didn't want to do anyways. You know, it takes vitamins, it turns them into candy. Well, so let's get into some of the actual applications and like use cases that you're seeing here. And since you mentioned education, let's start with that. Like specifically, like, what can we do with this new type of interactive video era in education? Oh, so much. And education for video in particular, I've been studying for a few years because it's a very, very big sector in China and very quickly growing a lot of moms, especially in the tier one cities, are now using their tablets for math lessons, for science lessons, for art lessons, for

every single subject really, you know, for online coding, you name it. And what's been really powerful is in this new video world, you're not just talking to a talking head on the other end of the video. You're incorporating cartoons. You're using puppets. You are using arcade games in the actual class to kind of reinforce the curriculum. You know, in my essay, I talk about how in ed tech, this is really a math meets Mickey Mouse moment. Imagine taking all the best folks who create video games and ask them to create first grade math curriculum. I guarantee you it's going to be more fun. It's going to be more engaging. It's going to have sound effects. It's going to have stickers that fly across the screen. And all of those things make it more motivating for the student

to complete the actual lesson. Well, and like as an example, like what I found compelling. And by the way, hitting a first grade curriculum, you're right up my alley right now because I've got a first grader that's struggling over Zoom at the moment. But things like, you know, we've known for years that, hey, in this modern era, if you want to learn to play guitar or something like that, you can go to YouTube and for free get these master classes. But again, it's sort of this old paradigm of, all right, I am lectured to, but I can't really, so you're just, I found it really fascinating. You're describing this sort of interactivity where it's like learning to play the guitar, piano, whatever it is. Like, not only,

is the person live instructing teaching in front of you, but your interaction back and forth, like you can see the actual, like you're, okay, you've got that chord, let's move on to this chord, that sort of thing. Yes, exactly. So it almost mimics, it does actually 100% mimic, like a real live instructor right there in your room. And oftentimes these courses are recorded.

So during the week, before your next lesson, you can go back and review things. These platforms could also eventually incorporate AI so that when I'm playing something, maybe I have, you know, tips even without my live instructor on how I can improve my guitar playing. I might be posting clips of songs that I'm working on, and I might find a community of other people learning guitar, and they can write comments on how I can improve,

or even just give me more validation that I'm doing a good job. There's a lot of things that are possible in this online world that are really hard to replicate in the offline. And in Ettech in particular, why I think it's super powerful is you create this curriculum once, use forever. First grade math curriculum doesn't change very much, right? Like teaching someone, how does a plant grow? That doesn't change very much. And so it's really empowering, especially for people who don't have access to those world-class instructors.

Because those world-class instructors, almost in the same way they make a movie or a TV show. You invest in creating the content once, and you can use it and apply it to millions of people. And on the live instructor point, you know, the other thing that it unlocks is actually the ability for more people to afford this kind of learning. Because now, if I'm living in the Bay Area, I don't just have to choose from the tutors who live in the Bay Area. I can choose from tutors worldwide who aren't in my time zone, who aren't in my country. And in fact, if I'm learning language, for example, right, it helps to actually speak with the native speaker. And so there's a bunch of topics where I think this online learning platform not only can 10x the kind of content you would normally get access to, but actually make these courses cost one tenth the price of the in-person equivalent. Now, that isn't to say that like in-person tutoring or in-person piano teachers are going away.

honestly, like when COVID passes or whatever, I hope my daughter's piano teacher can come back to our house again. Right. Because they are forming a great relationship with their in person. He gives her a physical sticker, and the physical sticker probably makes her happier than the digital sticker to be quite honest. But I'm saying that the piano on Zoom, if done well, can get really close to the human equivalent. I was going to say, you know, that Dan Smith will teach a guitar guy that puts up all those flyers around New York City. He doesn't have to put up the flyers anymore. He just, everyone can come to him. So let's move on to shopping because this is one where I have great skepticism, but tell me what you can see this doing for shopping.

Yeah. When I first learned about video shopping, it was probably two, three years ago when it started taking off in China. So around four or five years ago, China had a big way. of live streamers just for more companionship and entertainment and live streaming was a very big source of entertainment you know you can go to these apps find a bunch of people to talk to watch them eat just hang out with them whatever it was give them digital stickers and a couple years ago he started seeing this evolve into commerce where when you're talking to them there's a button that pops on the screen you click and you can complete a purchase in like five seconds right because they have the infrastructure of we chat payments alley pay

They have the infrastructure of Chaubao shops. And so it was really easy for a lot of these platforms to kind of bootstrap that e-commerce functionality and launch that very quickly. What you started seeing was in the same way that we grew up with infomercials and QVC, people very quickly learned how to make engaging, entertaining content to selfing.

And I totally understand the skepticism, because I know, like, you know, a lot of us, we don't watch QVC anymore. I mean, I grew up watching a lot of infomercials, but I don't anymore. Right, right. And a lot of us would say, you know, home shopping network, QVC, those are for older generations. But you have to somehow marry that with the fact that younger generations still love video. And it's not just Gen Z, it's millennials, it's everyone. Everyone still loves video.

And inherently, video is a better way to have more confidence in a product. that you're thinking about buying. If I am looking for a product, I will go read the reviews on Amazon, but I will also, oftentimes, if it's a high price point product, read about it, watch it and listen to it on YouTube. You know, when I'm buying a camera,

I'm going to YouTube for my reviews. When I was buying a baby stroller, I went to YouTube because I wanted to see, in comparison to the other strollers I could choose from, which one's bigger? How hard is this to open and close? How heavy is this? Right. I'm still going to YouTube for product reviews.

So we naturally have all been shopping with video already for many, many years. It just was not so easy to check out on the same place. And that's the only big difference that once we realize, if you could check out in the same place, you had all the same logistics, return policies in place, what does that actually mean for how we shop? Right, because you actually, I'm actually in the midst of this. I've probably watched six hours of YouTube videos because I'm in the market for a new e-bike. And you made me go down like this sort of like logic chain of, yeah, maybe 30 years from now, we'll think it's insane that commercials didn't, weren't instantly buyable.

You know what I mean? Like you would go somewhere and watch all this stuff, but then had to go somewhere else. And then if you think about it, like, if you look at it through that lens, like Amazon and everybody else is still very much in a catalog paradigm. where it's like it's a list of items and like here's, you know, reviews and things like that. They've advanced it that way. But like the idea that your point of purchase should also be your point of education and your point of like learning about the product and things like that. It should be one place as opposed to these separate places.

Yeah. And, you know, catalog really is fantastic when you're searching for something, you know exactly what you want to buy. You just want the lowest price point. You just want speed, right? But there's a lot of us, especially for these big ticket items, we're in the discovery mode. We don't know which e-bike brand is great. I don't know which features really matter. I don't know what the battery charging.

I don't know anything about e-bikes, to be honest. I want to know if I can fold it up and how much is it going to, you know, how hard is it to get the battery out of the right? And that's what those videos are doing for me. Yes, exactly, exactly. And so YouTube is already a great place to discover great products. And I'm just saying that video is a fantastic way to discover things, to have more confidence in the thing you're going to purchase. And it also is a great place. You know, for the e-bike, you say how to fold it up.

It's how you can demo the product, right? Like, let's look back to the infomercials that we watched 10 years ago, 30 years ago. It was all this like, this is how the George Foreman Girl works, right? Look at what this knife can chop up. Right, exactly. Exactly. Demonstrations, unboxing customers, like testimony. And forget about, forget about, you know, infomercials.

I mean, that's what a store used to be. A showroom was a place where you demoed the product for the potential customer. Right. Go ahead. Yeah. I remember walking into the brickstone stores and trying all their gadgets and massagers, right? I mean, that's what Apple stores function as well, you know? Exactly.

Exactly. And so I think about all this and I'm like, okay, you know, for a very long time, the industry was fixated on turning the television and figuring out how to make. make the television shoppable or like, how do you create the second screen experience for the television commercial? And I'm just saying, we are watching video content now on our computers and on our phones. And the television is like a monitor, right, to broadcast the thing that was on our computer anyways. And so you don't now need to solve those things for this old television world. It's all interactive. It's all internet enabled. And so everything can become more shoppable.

And it's from a discovery standpoint. It's also from a storytelling standpoint. So if I'm buying arts, crafts, if I'm buying a painting to watch the person painted in real time, I have a much deeper appreciation for the product. You know, I just brought scrunchies from my friend's daughter from our Shopify store. And it's because I was watching her YouTube videos of her crocheting. And she's showing people how she crochets scrunchies. And she puts out two videos a week.

And from that, I'm like, okay, if I ever need to buy Scrunch, I'm going to buy it from Allie. Because I now have a deeper affinity to her product. And so all creators with YouTube followings that have any kind of product, you can see how that same mentality means that they're going to be able to move more merchandise and move more product if the platforms build in the right tools. Well, and you had mentioned in China, the infrastructure was there, and then, of course, that plugs into what we've been talking about with Shopify and things like that.

Real quick, one more, so I don't keep you too long, meeting new people. Again, beyond just dating, like you were even using examples of networking and mentoring and things like this. So tell me some about that, because that plays into the whole idea, again, of this is social, not just for people you know or not just for people you follow. It's for finding new people. Yeah, you know, I think it's a shame that if you have specific interest, it's really hard to find your tribe online to scratch all of those itches, right?

And again, it's all about how humans are really multifaceted. We all have multiple identities. Yes, I like tech. I like studying innovation. I also collect old vintage peanuts comic books, right? Like I have all these different interests that are not captured in my existing social circle. So how do I find those people? And historically, I'd have to go to an old forum website.

Honestly, that's where most of these communities live, still on these really old text-based forums. And I'm just saying there can be a new version of those communities. And there should be new places where I can find those like-minded people. So we can talk about topics that we're interested in. When you think about someone moving into a new city, sometimes like I even ask, like, how do you meet friends? And sometimes people are not just wanting to meet people for dating. There's a lot of great products out there for dating and meeting new friends. But when you're looking at it for a non-dating context, just people who share similar interests,

I still feel like that problem hasn't been solved today. And you can go on Twitter or you can go on Reddit. That's not location-based. It's also hard to know who's actually on the other end and to make a great first impression unless you already have a following. There just needs to be a better solution here. Let's end with one pushback and then one takeaway. So the pushback,

would be, I'm old enough to remember a startup called Ning, the premise of which was let a thousand flowers bloom. And there's not going to be just one social network. There can be, you know, tons of social networks for every niche in the world. And that kind of didn't work out because Facebook kind of was that for everything. And we even hear that still today when we talk about Facebook, even people that don't like to use Facebook anymore are still stuck there because of their groups, you know, their quilting group or whatever. So again, that's sort of talking about what you're talking about. So my pushback would be, well, who's to say that any of these platforms, Facebook, Twitter,

Instagram can't just do this? Like, is this an idea whose time has come? Or are we in danger of, well, of course, Facebook and some other platform will just absorb these ideas and do them? Well, I would say two things in response to that. Facebook groups is still a very powerful product. And a lot of people still use Facebook groups. I know buildings who all their tenants are using Facebook groups to even just interact with their HOA.

Right, right. But Facebook groups are still very, very powerful. But there are some use cases where they don't necessarily work. One is on Facebook, everything is real identity. And there are cases where you want to engage in certain topics and you don't want people to be able to click into your Facebook profile and see how many mutual friends you have. There are topics, even support group topics where you, you don't. You want to control how much information the other side has about you. And there are also groups where you maybe want to charge money to be part of this curated

group, right? You maybe want to have exclusive subgroups within that group. There are a lot of functionality features, and then maybe Facebook will build them. But Facebook groups hasn't built a huge set of features yet, I think, that scratches all of those itches. And I think I go back to that identity point, which is why I do think these third parties will always still have a place. Because there's a lot of topics. Even I think about like parenting and mommy topics, like you don't always want to use your full name and identity when you're asking a random question about something that you're not known for.

And it's because we inherently have multiple identities that I think leaves room for more than one social network. Right. And I think that we are now habituated to using different social networks in different use cases. And so, like, this is what I use for my quilting interests. This is what I use for my goal. I think you're right about that. The takeaway, finally, is something that you mentioned in one of, I think, the last essay. If I was an entrepreneur who reads these essays and thinks, yep, this is pointing me in the direction of where the puck is going, this is the future,

what would your advice be should an entrepreneur attempt to steal away a chunk of these big platforms for themselves or should you rip apart the big platforms and go vertical yourself? Ah, I see. Well, I think to be honest, you're going to hate this answer, but like both of them can work. Both of them can work. Like one, if you have a feature of functionality that an existing incumbent just is not catering to, and you do that feature better than anyone else, I think that can spur a brand new network. And maybe you focus just on audio, maybe you're focusing just on video, or maybe you're just handling it in a way that allows for better search or better discovery. At the same time, there are whole communities that are willing to migrate off of these existing platforms.

The tricky thing on that is, though, either the community has to be quite young or you have to really convince them to migrate everything they have, all their historic chats, all their historic relationships that are already built onto a brand new platform. I'd say the latter one is probably harder, to be honest, than starting with a feature as a witch. Probably there's, it would fit a thousand different startups, so it doesn't matter.

It's not a binary choice. both can work. Right. That's what I'm saying. That's what I'm saying. Connie, what I love about y'all at A16Z is that you love to show your work and you love to share what you're thinking about. So I appreciate you coming on to do just that. It's my pleasure.

I hope everyone checks out social strikes back. Well, link in the show notes. And thank you again, Connie.