Lenny's Podcast: Product | Career | Growth
00:00:00 · Benedict Evans, Lenny Rachitsky
[00:00:00] S0: My most controversial opinion is that I think that AI is as big a deal as the internet or mobile, and only as big a deal as the internet or mobile. [00:00:07] S1: But you're just on the coming job apocalypse. [00:00:09] S0: Every time we have a new technology, it automates away a bunch of jobs. And then that automation unlocks a bunch of new jobs. And you don't know the new job because it doesn't exist yet. We've had that process over and over again. [00:00:17] S1: Even just looking at the most advanced AI companies, throughout big OpenAI, everyone's increasing headcount. [00:00:23] S0: You talk to these doomers on Twitter and they would act like every big company is going to buy ChatGPT tomorrow, and then in two weeks' time, they'll fire all their stuff. These people are more on. You can't predict which things are going to be exposed. You can't look at a senior partner at a law firm and say, "Well, 17% of their work could be automated." This is horseshit. [00:00:40] S1: I'm curious if you're following the anti-AI sentiment. [00:00:43] S0: It's a big fuzzy mess. Yes, this will change a bunch of stuff and we'll need to worry about it, but that's kind of a constant. We've always had that. [00:00:50] S1: What would be a couple things you recommend people do to be more successful in this future?
00:00:50 · Lenny Rachitsky, Benedict Evans
[00:00:50] S1: What would be a couple things you recommend people do to be more successful in this future? [00:00:56] S0: Don't stick your head in the sand and say, "I hate all of this stuff." That gives you a great feeling of all superiority and you can go on BlueSky and chat at everybody about how Evil AI is like, great, happy for you. But that's not going to help. What helps is you diving into this and coming out, understanding what you can do with it. [00:01:15] S1: Today, my guest is Benedict Evans. Benedict was a longtime partner at A16Z as their in house analyst and resident thinker. Before that, he was a longtime equity researcher. And for the past six years, he's been an independent analyst tracking the most important tech trends and sharing what he's learning. Most recently, as you'd expect, he's spending all his time on how AI is changing our lives. And in his words, "AI is eating the world." In this conversation, we go deep on what we're still not pricing in on the impact that AI is going to have on our lives and our work, the rise of anti-AI sentiment, the impact on jobs, where in the value chain most of the value will accrue, and tons more. If you are worried about AI, or just confused about where things are heading, this conversation will teach you a lot, and also make you feel better. [00:02:27] S0: Thank you for inviting me.
00:02:27 · Benedict Evans, Lenny Rachitsky
[00:02:27] S0: Thank you for inviting me. [00:02:29] S1: You just put out this deck called AI is Eating the World. I want to ask you the flip side of this, of we all know it's a big deal. Knowing that, what do you think people are still not fully pricing in when they think about the change that they're going to experience to their lives and their work?
00:02:46 · Benedict Evans
[00:02:46] S0: An interesting way of thinking about it, I did a podcast last year with someone where I said my most controversial opinion is that I think that AI is as big a deal as the internet or mobile. And only as big a deal as the internet or mobile, because clearly there's a bunch of people in tech who think, no, this is more like the industrial revolution or something. And there are a whole bunch of people underneath saying, "Well, he thinks this is just as big as... Does he not understand how big this is?" And I'm like, smartphones were quite a big deal. The internet was quite a big deal. We wouldn't be doing this if it wasn't for the internet. But then if you dig into that, if you're going to make the internet comparison, it's like we're a 1997. It's very exciting. Most stuff doesn't work yet. Most of the stuff that people are going to do hasn't been built yet, and it's not really clear how any of it's going to work when it does work. And the people who've already got it, who have already taken whichever pill it is, I forget which, sort of imagine that everybody in the world is already there. And the truth is you've got this kind of very wide distribution. So there's people in tech who bought their cluster of Mac minis, and don't use Google anymore. And then you look out side tech and setting aside the idiots who think that this isn't real. Most people who are using this are using this every week or shoot, maybe. So you've got that kind of spread of adoption and that spread of maturity of how well this works. And then within that, you can make specific points about, well, how are the models going to work? And do the model labs have pricing power? And where's the value going to be? And has OpenAI won the whole thing? Or is Anthropic got it this week? And so then you can kind of get into calling those races where, again, it's like being in 1997 and saying, "Well, is it going to be Excite or Yahoo?" And the answer was no, generally. So there's a fractual point here. There's the super high level that this is going to change absolutely everything. I don't think it's particularly productive to say, "Well, is it 20% bigger than the internet or 100%?" Those aren't productive conversations. But it's one of those fundamental changes, but then you don't know how any of it's going to work. In fact, I just published this.
00:05:38 · Benedict Evans
I do a presentation every six months and I just published one yesterday, and one of the comments was, "Benedict, this is 80 slides of saying we don't know," which is slightly facetious, but also kind of true. Well, unquestionably, we are already in that moment in software, and then there's a conversation about, well, what does Agentic and AI software development, three separate things that merge together, mean for the future of the software industry? There's one extreme which is no one really believes, which is, "hey, you'll just vibe create your in Stripe." And no one actually believes that, although briefly you don't believe that, but clearly there's a whole bunch of questions about what this means for the software industry, and how much stuff you'll be able to do yourself, or how much more software there will be. And that's one whole conversation. But the other extreme is, if you're in a law firm, this is all very interesting, but how exactly do we use this, and how do we work out how not to be the next story that we've submitted something with hallucinations in it, and how many associates are we going to hire next year? What does this mean for us? One of the analogies I used in the presentation is, imagine you're an accountant seeing the first software spreadsheets in the late '70s, and this is mind-blowing. You change the interest rate here, and all the other numbers change. And it does a week of work for you in like 30 seconds. And we can talk about what that meant for the accounting industry, but clearly if you're an accountant, this is obviously mind-blowing. But if you were a lawyer looking at that, or journalist looking at that, you'd think, "Well, that's very clever and my accountant should see this," but that's not what I do. I might use it for my time sheet next week if it didn't cost 10 or $15,000 to get the Apple 2 and the monitor and the printer to run it, which is what it costs if you adjust replacing. But that's not what I do. And you need Word processor, which actually came very shortly afterwards. And so that's sort of the moment that we're in of, there's some people like software developers are the accountant seeing VisiCalc. "Oh, my God, this changes everything." Before VisiCalc and after VisiCalc, before Claude Code and after Claude Code. A lot of other people are picking it up using it to varying degrees, but slightly puzzled.
00:08:35 · Benedict Evans, Lenny Rachitsky
So, there's a bunch of survey data that I put in the presentation that, even if you look at like 13 to 18 year olds or something, it's still like 15, 20% of people are daily active users, and another 20% are weekly active users. And then the other 60% of those people in that demographic how on you say they are not using this. So, there's a sort of very widespread of who gets it, and a very wide... Which I think also maps, this is kind of almost a separate point, maps to this sort of jagged frontier question of, where does this work? Where does it not work? Can you tell where it's going to work? Is it intuitive to know where it would work? Can you tell after it worked? Can you work out for yourself what you would do with this? And all of those intersect with your software developer. There's a lot of other people who are like, people are having a moment or they're not, or again, we're in that kind of 1997 moment of, "Okay, what is this?" [00:09:45] S1: Along those lines, something you've been writing a bit about is, this unexpected investment in professional services/consulting services/forward deployed engineers, all the AI labs, at least the two big ones, OpenAI and Anthropic, are investing in buying massive consultancies and PE firms. Talk about just what's happening there, why that's happening.