Andreessen Horowitz

Fintech isn’t dead. AI is driving a new beginning, say a16z General Partner Angela Strange and a16z Partner James da Costa.

Great founders stay deeply involved in the decision-making loops that define long-term success even after hiring great execs. In the latest AI Revolution episode, Alexandr Wang, founder and CEO of ScaleAI, breaks down the “founder fantasy”—the belief that bringing in top executives allows founders to take a step back from running their companies. Wang shares why staying involved in key decision-making is crucial for a company’s growth and success, even as your leadership team expands. Hear more on his leadership philosophies from the growth of Scale and what he thinks growth-stage founders tend to get wrong when hiring: https://lnkd.in/g6rhxTQr

Selling today is tough — much tougher than it was several years ago. Why? The entire pie of software spend is just smaller: net-new dollars up for grabs for startups have been cut in half. Unless you’re selling cybersecurity or databases whose growth rates have remained strong, your life has gotten a lot harder. Justin Kahl, David George, and Alex Immerman recently spoke with 30 Fortune 500 CIOs and software sellers about their spend and priorities. In those conversations, and in their own benchmarking and survey data, they found that even though the pool of opportunity has contracted, over 85% of winnable IT spend lies outside of the industries most disrupted by gen AI today. But there are pockets of opportunity for startups. The key is knowing where to look for that opportunity and how to win those customers. Winning this business requires a sophisticated selling motion and a solid product roadmap keyed to the actual pain points of companies today: getting ahead of gen AI disruption and showing real ROI. In their latest, Justin, David and Alex dive into how to do just that: https://lnkd.in/eGE_HNQy

Great talk with John Stecher, CTO at Blackstone on what qualities he's looking for in early stage companies and how he sees AI impacting Blackstone's various businesses across real estate, credit, energy, and private equity. Join us as we chat about data security, practical advice for young teams, and how to focus on out-of-the-box experiences. 🎧You can listen to it here, or wherever you get your podcasts 👉 https://lnkd.in/ejfV22u7

There is still more work to be done around data as we advance gen AI to its next transformative phase. And one of the most highly-respected minds in the space, Alexandr Wang, the founder and CEO of Scale AI, is building towards this next breakthrough. Two of the biggest challenges, he says, when it comes to data currently, are increasing data complexity (moving toward frontier data), and increasing data abundance (the production of data.) These challenges can be overcome by investing in synthetic data, or "hybrid data" that incorporates human reasoning chains to produce higher-quality data, along with data foundries, Alex shared with a16z Growth's David George. The same way that chip foundries ensure enough means of production for chips, data foundries allow the ability to capture large amounts of data, essential for training generative AI models. For more on these data foundries, and what Alex and his team are making possible with Scale AI, check out the full video with Alex and David George: https://lnkd.in/eBYJs_zn

Language models process data as one-dimensional sequences of tokens — ideal for text, but limited for understanding the physical world. In contrast, spatial intelligence embraces a 3D representation, unlocking a deeper understanding of space and time. ICYMI: With her World Labs Cofounder Justin Johnson, Fei-Fei Li discussed spatial intelligence with a16z’s Martin Casado, in a wide-ranging conversation on where AI is going next. Watch the full interview on the a16z YouTube channel.

We’re excited to announce our investment in Scribenote, the market-leading AI scribe for veterinarians. Expectations for the quality of pet care have never been higher, yet vet clinics have never been more constrained and understaffed. Vets are often faced with an impossible choice during appointments: Do they give the pet (and owner) their full focus, leaving hours of work at the end of the day as they try to recall and type up the visit notes? Or document the visit while performing the exam — resulting in more accurate notes (and less after-hours work), but at the expense of their focus and bedside manner? Scribenote makes this trade-off obsolete. Built by cofounders Ryan Gallagher and Alina Pavel at the University of Waterloo, Scribenote was designed with deep empathy for the daily challenges vets face. Today, the tool automates burdensome documentation requirements providing properly formatted SOAP notes, transcripts, and recordings for even the most complex appointment. A tool that helps vets manage their workloads can be life-changing for both providers and their patients. More from Olivia Moore and Anish Acharya: https://lnkd.in/eyYu3ZDh (This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. Please see https://lnkd.in/gZB38psi for additional important details.)

AI is unlocking a new era for vertical SaaS. One important result: AI is increasing VSaaS revenue per customer, by enabling vertical SaaS companies to take on tasks previously too complex for software, Angela Strange and James da Costa write. To better understand the power of AI to VSaaS, they look at the vertical software company Mindbody, which serves fitness and beauty studios. In wave one (cloud), Mindbody handled booking and scheduling appointments online. In wave two (cloud fintech), they expanded their business to offer payroll for staff, customer payment processing, and insurance for studios.    Enter wave three: AI. We will always crave human connection for some roles (we all love our favorite fitness instructor!). However, roles where human connection isn’t a key benefit, delivering on a core product, or particularly differentiating to the business, are all candidates to at least be augmented, if not fully replaced, by AI. With the right solution, many businesses consuming VSaaS can dramatically reduce internal and external labor spend on sales, marketing, customer service, operations, and finance. This should further increase the take rate of VSaaS companies by an additional 2-10x. Read more from Angela and James in their article, linked in the comments 👇

The moment is right to push forward into a new frontier for AI — one that is as fundamental as language, says Fei-Fei Li. That frontier is visual spatial intelligence. Fei-Fei Li and Justin Johnson, cofounders at World Labs, are pushing the boundaries of AI with models that can generate 3D interactive worlds — the foundation for spatial reasoning. From gaming to AR/VR, design to visual effects, the impact and possibilities of spatial intelligence are vast. Fei-Fei and Justin join a16z's Martin Casado to discuss 1D vs. 3D, data-driven models, and how World Labs is a deep tech company.

About 15% of all worker tasks in the U.S. could be completed significantly faster at the same level of quality, according to a recent study by OpenAI and the University of Pennsylvania. When incorporating software and tooling built on top of LLMs (i.e., Vertical SaaS), this share increases to between 47% and 56% of all tasks. We believe *every* white-collar role will have an AI copilot, write Angela Strange and James da Costa. Some of these roles will be fully automated with AI agents. So which roles might change the most? And if you're building in this area, how do you overcome incumbents' natural advantages? In three ways, Angela and James say: 1️⃣ Insert at the data collection stage upstream 2️⃣ "AI-ify" a painful workflow performed outside of the incumbent 3️⃣ Integrate disparate data sources to create a new multimodal system of record Read Angela and James's full article, with more on these three ways to build, linked in the comments 👇