We still believe that there will be a separation between the “application layer” companies and foundation model providers, with model companies specializing in scale and research and application layer companies specializing in product and UI. In reality, that separation hasn’t cleanly happened yet. In fact, the most successful user-facing applications out of the gate have been vertically integrated.

We predicted that the best generative AI companies could generate a sustainable competitive advantage through a data flywheel: more usage → more data → better model → more usage. While this is still somewhat true, especially in domains with very specialized and hard-to-get data, the “data moats” are on shaky ground: the data that application companies generate does not create an insurmountable moat, and the next generations of foundation models may very well obliterate any data moats that startups generate. Rather, workflows and user networks seem to be creating more durable sources of competitive advantage.

Some of the best consumer companies have 60-65% DAU/MAU; WhatsApp’s is 85%. By contrast, generative AI apps have a median of 14% (with the notable exception of Character and the “AI companionship” category). This means that users are not finding enough value in Generative AI products to use them every day yet.

generative AI’s biggest problem is not finding use cases or demand or distribution, it is proving value. As our colleague David Cahn writes, “the $200B question is: What are you going to use all this infrastructure to do? How is it going to change people’s lives?”

I look around the room and I see a laundry basket in need of optimization, an unsatisfactory rug, house plants that should be growing more. I need better tupperware, a kitchen remodel, some trick to clean my exterior windows that isn’t just me spending hours cleaning my exterior windows. Instead of looking around my living space with gratitude for the soft comfort I’ve built for myself, inflected with my peculiar tastes and preferences, I see lack. And that dissatisfaction becomes a sort of lingering fog, dampening my experience of the world.

The scroll doesn’t make you feel jealous, per se. I don’t even think it makes you feel shame, at least not in the way we usually think of it. It’s aspirational: it makes you feel like if you could just find the capital and discipline, you could touch perfection too.

Remodeling is the attempt to find “the one best way” with our physical spaces; wellness culture is “the one best way” with our bodies; productivity culture is “the one best way” with our work lives. And like all quests for optimization, they’re sinkholes.

If you’re an interior designer, if you see home space as an artistic tapestry, I get this; I believe you. But I also believe that we’ve collectively become very good at mistaking the feelings of optimization, organization, and control for fun. Organizing your fridge is not fun. Neither is watching someone do it. It is satisfying, and it is satisfying because it offers a flicker of control amidst the natural and amplified chaos of our lives.

instead of directing attention and energy towards the sort of structures that could make us feel less insecure — whether unions or deeper friendships or school year reform — we focus it on the self and the space around it.

But the very idea that we can “fix” this mindset is, well, optimization culture. “Fixing” suggests altering or shifting the existing parts. This bullshit requires dismantlement. But what does that even begin to look like? For me, it’s looking at my body, my self, and my spaces through the eyes of a friend who loves me the most. It’s extending that posture of grace for others. It’s talking back at the part of me that worries something is “off-trend” or will “look dated.” It’s finding that busted-ass coffee maker funny. Annoying, sure, but annoyances are part of the rich tapestry of life. It’s figuring out the parts of my living space that are precious to me, as we did in the Friday thread this week, and extending that feeling. Not the cost, not the aesthetic, but the feeling.

It’s remembering, over and over again, what a blessing it is to be simply, overwhelmingly, satisfied.