Lenny's Podcast: Product | Career | Growth
00:32:15 · Brian Balfour, Lenny Rachitsky
Google had the best retention and engagement over the others. Facebook had... Was smaller but had way better retention and engagement over the others. Right? So on and so forth. And so, the the data that Deedy published, clearly showed that both the retention curves, which I know you and I have both written about at, you know, 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 of memory, and they have the very elusive smile curve. Right? The ones that you just like... And the only other times I've seen, you know, all of those dynamics very few times in my career, and they tend to be the folks like Slack and and, like, all of the big winners. It's... There... It's just, like, so elusive. [00:33:04] S0: And the smile curve just to... Just to have people haven't done with that 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.
00:33:12 · Brian Balfour
[00:33:12] S1: Yeah. That's right. And it's usually the result of, some type of network effect or or something else. And and it... And it's it's a early indicator that these folk... That that that platform is on a trajectory to to hit escape velocity. The third piece is that... And they haven't really hidden these, but there's all sorts of signals that they're about to launch a third party platform. They've they've been hiring for a bunch of roles. I've seen multiple postings on, like, product manager, engineering roles, all that kind of stuff for, you know, quote, unquote, agent platform and all those pieces. And so it feels pretty inevitable that they will... One of these players will need to launch a third party platform in order to, you know, serve all the possible use cases, you know, on these tools. There's gonna be some value exchange, which is like, hey. For your agent to be effective, you probably need access to the context and memory and distribution. Right? So there'll be some value issues of integrate to us, and we'll give you those three things. Right? Is going to drive more users and more usage. And and we're going to go through the steps of we're going to go through the steps of the cycle. And you can already see this, right, like, you know, they're starting to form preferred partnerships, right, with some of the bigger players, which paves the way for smaller third party players. It kinda gives Lens credibility to the platform. It's like, well, if HubSpot and x y z are doing it, then I should probably do it too. It's it's like that type of that type of mentality. But that's why I think out of all of these platforms, ChatGPT has, the the best shot right now. And then and then a bunch of folks are always like, well, what about Claude? I really like Claude. I use Claude. Well, the problem with that is, like, I think ChatGPT at this point has, like at least a 10x difference on MAUs. So if you're a developer, right, and you're comparing those two platforms and you're saying and you're looking at it you're like, well, ChatGPT has 10x the number of users and better retention engagement. It's like, what's the logical choice of which one you're going to prioritize your scarce resources on? Right? And so those are just some of the reasons that my prediction is on ChatGPT.
00:35:24 · Brian Balfour, Lenny Rachitsky
And in in the blog post that I wrote about this, I actually then played my own devil's advocate and said, okay. Here are some reasons why it might not be a ChatGPT. But but I think we're in that part of the cycle. That's my prediction. I might be wrong in the prediction of ChatGPT ChatGPT, but I really think... I feel very confident we're gonna see this cycle play out again. [00:35:45] S0: Two follow-up questions here. One is what's your... What would be the backup if it's not ChatGPT? Sounds like it might be Gemini, Google.
00:35:51 · Brian Balfour, Lenny Rachitsky
[00:35:51] S1: My hypothesis of who's best positioned but is not executing on it right now would actually be Apple. Through the the devices, they basically can see everything. So they have the ultimate view into your context. Right? They're they're they're sitting at that they're sitting at that level. But I don't know what they're doing. It's like from an execution standpoint, maybe they're gonna surprise us with something crazy magical. But I haven't... We haven't seen any external signals around this. So so that's probably just based on on what real estate and where people live in the stock would own. And then I think right behind that, I would probably put I would probably put Google, because of owning the context of things like email and the distribution points of search and Chrome and Android and and those types of pieces. But, and a lot of people point to them. But my experience with all of their products is, like, going back to the retention engagement thing is is that if we could take a look inside their metrics, I think what we would see is a bunch of flyby users in their mouths. Like, they're kind of sprinkling the Gemini bucket everywhere. And I'm... I've I've, like, literally clicked on it accidentally multiple times. And so my guess is a huge portion of their mouths is is exactly that, of, like, what... What's happening right now. And so, you know, look. They just just acquired a very talented team from from Windsurf. [00:37:30] S0: Just the team. Just the team.
00:37:30 · Lenny Rachitsky, Brian Balfour
[00:37:30] S0: Just the team. Just the team. [00:37:31] S1: Part of the team. Yeah. We'll see. And and things are things are changing dramatically, you know, on a on a week to week basis. So we'll see if they're able to press those advantages in a very clear way, but I think the window is very small for them if if if ChatGPT plays their cards right because they clearly have the escape velocity right now. And, if they just keep pressing that advantage in in the right way, I think it's going to be very hard for Google to, counter in in the amount of time that's left. [00:38:00] S0: On the Claude piece, I'll just throw this nugget out. I had, Mike Krieger on the podcast, head of product CPO at Anthropic, and asked him just, you're you're losing to ChatGPT. What do you... How do you approach the future of anthra... Of Claude? And he very specifically said, yes. They've caught lightning in a bottle. This is just going to win based on what I've seen at Instagram. And so we are specifically focusing on what is Anthropic and Claude incredibly good at, which is developer tools, coding, backend stuff. So they're actually leaning more and more into that. And if you've seen their revenue recently, they're making, I don't know, like approaching 10,000,000,000 a year or some crazy amount of money. So they're actually doing super well just in a different use case.
00:38:40 · Brian Balfour
[00:38:40] S1: Yeah. I'm glad you mentioned this because this brings up something that we skipped, which is there are smaller platforms that have existed and will also emerge in this environment as well. And and that's kind of like what you're alluding to is that this tends to happen is like things end up, know, growing into more niches. Even if you look at social, right? Like LinkedIn emerged as a subset of the social world. But even on these smaller platforms, these new distribution channels, they they go through the same cycle. I'll I'll give something, you know, really, a a very opposite example of the ones that I gave. Like, look at the platform Udemy. Right? They they are a platform for course creators. Right? I don't know if most people know this, but when they started, their rev share to creators was something like 80% to creators. They started very high. And that brought on all the course creators, got their whole marketplace going, like so on and so forth. I believe it was about a year ago they announced that they're essentially pushing that rev share down to something like somewhere between 1520%. They're somewhere at like 2530%. So another example of they closed down organic distribution in order to monetize all that kind of stuff. And the same thing will happen in this AI world. I believe you know, Cursor... It's very clear, like, Cursor is on a path to also probably create some type of agent platform, right, for developers. So that'll be like a smaller ecosystem to play in for, some some products. There's all sorts of... It feels like everybody has the same strategy at this point as everybody wants to launch an agent platform. I imagine some of these other horizontal productivity tools will do the same thing, maybe like a Notion or an Airtable or like a monday.com or or something like that. So there there are... There will be smaller platforms that will emerge, and they will follow the exact same cycle that I am... That I'm also discussing. But, yeah, in terms of, like, the biggest kind of consumer one that... That's where I think ChatGPT has probably the the most escape velocity. And, and, yeah, others will focus on different areas. And and just to be clear, I love Claude. I actually use both Claude and ChatGPT all for for different things. I I have lots of love to go around for all these tools. I'm not...