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The CQ: Let’s Not Let What Happened to Web3 Happen to AI
The opportunity lies in leveraging AI to serve the customer vs. being an "AI Company" as the end goal.
The CQ is Forerunner’s weekly newsletter covering the most pressing consumer trends and analysis, as well as business-building insights from our investment team. Subscribe now to get the latest edition in your inbox every Saturday.
By Brian O’Malley, Managing Partner
If you’re looking for one piece with every buzzword imaginable, you’re in the right place! Jokes aside, we wanted to share our perspective on the growing interest surrounding AI. While we’re optimistic, we do not share the unilateral optimism you might be seeing elsewhere. VCs all-too-often over romanticize new technologies without thinking through the practical applications or second-order concerns real adoption would introduce. Just following along can be exhausting.
At Forerunner, we see this stage we’re at currently at with AI — one marked by overwhelming enthusiasm and momentum — as an exciting but somewhat precarious one. This moment isn't too far off from when crypto rebranded as Web3 around 2020 and there was a rush of new capital, talent, startups, conversation and Miami Yacht party. The promise of blockchain-powered systems and decentralized finance was strong, but somewhere enroute web3 lost its way with too many solutions searching for a problem.
For AI to avoid similar pitfalls, the capital and talent moving into the ecosystem should consider that mass adoption is often achieved first through micro-utility. Because ultimately, the opportunity in AI lies in leveraging the technology to serve the customer vs. being an "AI Company" as the end goal.
We’d be curious to hear if you agree (or disagree) with our view in our latest piece, Don’t Let What Happened to Web3 Happen to AI, and what you think of the most interesting use cases where AI is a means to an end vs. the end itself.
What the team is talking about on Slack
Credit card companies are incentivizing Gen Zers to pay rent using credit cards. They can earn rewards on big expenses like rent, mortgage, student loan, and car payments. Some young people are conscientious about paying off their balance in full each month to avoid interest fees and “game the points system,” but it’s a risky game to play.
Many students are choosing apprenticeships over college. Over the past decade, college enrollment is down by about 15%, while the number of apprentices has increased by more than 50%. What’s interesting is that 40% of apprenticeships have expanded beyond the traditional construction trades and into white-collar industries like banking, cybersecurity, and consulting. Because apprentices gain practical work experience while employers pay for schooling on top of a wage, admission into these programs is becoming just as competitive as Ivy League.
A record-high of 3.2 million unmarried Gen Z couples are living together. It’s not all for love: 80% claimed money was the main driver, with one in four couples saying cohabitation allowed them to save $1,000 a month. Relationship-wise though, 42% have regrets about shacking up.
Meanwhile, the newest real estate moguls are Gen Zers. Young people are taking advantage of modern technology to help them buy property in more affordable areas and manage it from far away.
Now that they’re reached middle age, millennials aren’t worried about a midlife crisis. As one 40-year-old put it, “my whole adult life has been one long crisis.” For a generation that was once characterized as upbeat and optimistic, millennials’ current reality is much more complex. The New York Times checked in with millennials on how they’re faring so far and the consensus seems to be this: “Rather than longing for adventure and release, they crave a sense of safety and calmness, which they felt they had never known.”
Fortune heralds grandmothers as “the unsung heroes of the American economy.” According to a recent poll, 42% of working parents rely on them for (typically unpaid) childcare support. And about 67% said there were times they would’ve lost their jobs if it wasn’t for Grandma stepping up to help—and, in some cases, sacrificing their own job, time, and finances.
On the other hand, those without the benefit of family support are being forced out of the workforce due to lack of affordable childcare. Nearly 380,000 workers between the ages of 25 and 54 have left jobs since the pandemic. The majority of them were working low-earning jobs that would not cover the high costs of daycare.
The pandemic led fathers to take on more housework and childcare, and many are now unwilling to give up their family time and are adjusting their careers to make it work. An April 2022 poll found that 47% employed fathers said flexibility and control over their hours was a top priority. Another survey reported that almost half of working fathers said they planned to work less or pursue a less demanding job—more than the number mothers who said so.
TikTok is helping to drive the rise of sample sales and introducing luxury items to a younger generation. The marketing tactic of exclusivity gives consumers a dopamine buzz, whereas brands can unload excess merchandise while avoiding the landfill.
Meet the Gen Z color palette. There’s Neo Mint that’s part futuristic, part naturalistic. Moody and dark Midnight Plum. Digital Lavender. And Cyber Lime and Viva Magenta for a dopamine rush. “The culture is trending toward aesthetics that can travel between the digital and physical realities.”
Work at a Portfolio Company
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There are ~570 other openings on our jobs site. Check ‘em out.