What Would Make an AI Assistant Worth Paying For?

1. 0:00 – 0:54

   Intro

   1. DPDavid Pawlan0:00

      The general population does not care about being 10% more efficient. I have a hot take thesis that this Muse charm is actually less about trying to win the hardware game, and it's more about data collection in the real world to fuel Zuckerberg's future metaverse of mapping out the actual world.

   2. AAAnish Acharya0:16

      We were joking internally, like we're days away from an agent messaging someone saying, "I noticed you weren't that into her, so I went ahead and broke up with her."

   3. DPDavid Pawlan0:23

      There is massive defensibility around proactivity. I was biking to work. I wanna get stuff done, and I just start talking to ChatGPT Voice. And throughout my 30-minute bike ride to work, categorized my emails, submitted them to different labels, sent out calendar invites, got to the desk, inbox zero. But it will be a very fine line because if you cross that line once, you lose all trust with your user.

   4. AAAnish Acharya0:44

      It does feel like there's going to be infrastructure and products that exist only for agent-to-agent interactions that doesn't exist today. What do you think?

   5. DPDavid Pawlan0:52

      It is inevitable that we're gonna see-

2. 0:54 – 3:41

   Poke, Instinct, Muse and the agent boom

   1. AAAnish Acharya0:57

      All right. Welcome to the a16z show. I'm so psyched to be here with my friend David Pawlan. We hung a couple of weeks ago. We're both so enthusiastic about everything that's been happening with personal assistant, um, and consumer AI generally, and man, so much has happened in the last couple of weeks. Maybe to tee it up, you know, I sort of think that there's been a few moments where some part of the, you know, ecosystem has sort of seen God, um, and ChatGPT was a big one, you know, I think for a lot of folks in November '22 and a bit of '23, it was like, what is this thing that can, you know, write emails and poems and, you know, start to have a conversation back and forth and feel like you're interacting with a synthetic person? That was, of course, the, the beginning, the Big Bang. Um, the second moment really was coding agents and everything that developers have been obsessed with around sort of quad code and codecs and the ability to trivially create software. And then finally, most recently with Instinct, Muse and ChatGPT work, we've had this extraordinary enthusiasm around personal agents and what they can do for us as consumers. So we're here to talk about all things personal agents. Um-

   2. DPDavid Pawlan2:02

      Yeah

   3. AAAnish Acharya2:02

      ... we're gonna go as deep as we can. We're gonna assume that everybody has seen many of the same things that we have seen, and we're gonna make this a first in a series of conversations. Welcome, David.

   4. DPDavid Pawlan2:11

      Thank you. Thanks for having me. Excited to be here.

   5. AAAnish Acharya2:13

      Let's like zoom out and, and maybe talk about, you know, the arc of, uh, personal agents over the last few months, the last few weeks. What have you been seeing? What's your sort of view on things?

   6. DPDavid Pawlan2:23

      Yeah. So this space has exploded over the past four weeks. We can roll it back. I was, I was an early adopter of Poke, so I wanna say Poke, which was kinda one of the first like consumer AI agents to really hit the market.

   7. AAAnish Acharya2:35

      Yes.

   8. DPDavid Pawlan2:35

      That launched, I believe it was September 8th, and then I started using it September 11th, like three days later. And like I remember it so vividly 'cause it was just an unbelievable experience. Their, their whole gimmick was this, you know, negotiation with the agent on how much you're actually gonna pay, and it totally blew my mind. Um, then comes late November and OpenClaw gets released, and that kind of takes the actual world by storm of like there is, there is something coming. And then a few other have popped up here and there, but most recently we saw Instinct really blow up the, the tech Twitter bubble. Just absolutely rode a wave, went nuts, and then it was just dominoes. You have GrokBot, you have Muse, you have a bunch of long tail ones like Caddie or Ollie or Pali, and it's really been amazing to see, you know, this whole tech bubble is just exploding with interest and like an intellectual curiosity for what can these agents do for us on a day-to-day basis. And there's, uh, I think everyone's kind of in the same boat where nobody really knows. Like it's, it's the Wild Wild West. We're just playing

3. 3:41 – 9:14

   What Assistant Bench actually tests

   1. DPDavid Pawlan3:41

      around here.

   2. AAAnish Acharya3:42

      I totally agree. And you know, we should take a moment to talk about Assistant Bench, which is this new, you know, really important and discussed benchmark that you're the author of. Maybe tee, tee up Assistant Bench a little bit, and then I'll ask you a few questions.

   3. DPDavid Pawlan3:54

      Assistant Benchmark is a site that essentially compares all of these AI assistants on a use case basis. So we're asking all of these assistants the same prompt, "Book me a flight to Chicago," "Find me a vegetarian restaurant within five blocks of my specific location," et cetera, et cetera. And we're comparing the actual outcome on like on a one-shot prompt. Does it actually work? Does it ask follow-up questions? How does it perform across 16 different dimensions? And we compare those all. So it's-- We use the word benchmark. Think of it more as like a, a consumer-facing benchmark, not necessarily technical behind the scenes, but if I wanna book a flight, which one should I actually use? Who is performing the best? How fast are they actually replying? Got into this whole comparison because I was just doing market research myself, trying to figure out how are these all comparing against one another, what are the gaps, and, uh, published a, a bit of that, and it was, uh, almost two weeks ago. It's, uh, 16 days ago today that we launched it, and it's just absolutely exploded. It's, you know, over 100,000 views on the, the website. It-- Website has had over 100,000 visitors. Have out, had outreach from basically every single founder. Um, and I think it really just goes to show like everyone's curious. People, people are looking for, for answers to where this industry is, is moving.

   4. AAAnish Acharya5:11

      And so talk us through, David, that's incredibly exciting. It's cool to actually... It's funny how benchmarks have become such a staple now of the conversation-

   5. DPDavid Pawlan5:17

      Yeah

   6. AAAnish Acharya5:17

      ... 'cause it's so-- there's so many launches, it's hard to try everything, which is also an exciting signal. Maybe talk us through everybody who's not Instinct and Muse. We're definitely gonna deep dive on those later, but who else do you think is doing interesting work, and what are the kind of directions of specialization that you're seeing?

   7. DPDavid Pawlan5:32

      Totally. So we've got a bunch of long tail solutions out there. I think I would categorize it into two groups. You have like the B2C consumer-facing generalized agents.

   8. AAAnish Acharya5:40

      Mm-hmm.

   9. DPDavid Pawlan5:41

      That's like the Instinct or Muse. Um, some of the longer tail ones, you have Caddie, you have Ollie, you have Season. Um, there's, I believe, 64 right now just in the general category-

   10. AAAnish Acharya5:52

       Mm-hmm

   11. DPDavid Pawlan5:52

       ... on the site, and then we can break that down even further into a little more specialized within that. So you can have travel-specific ones, uh, like Soar or Miso. You can have email-specific ones. The other side of the spectrum is gonna be more of like your B2B workflow type, uh, assistants, and those are, you know, anyone from the Town to Catch to Vellum And they're all essentially doing the same thing, right? They're, they're your assistant that's actually like more of like an executive assistant, not, not the consumer-facing, um, approach to it. And that's kinda like the general landscape at the moment. Um, so far, to my knowledge, there are 122 different ones-

   12. AAAnish Acharya6:34

       Wow

   13. DPDavid Pawlan6:34

       ... across all the categories.

   14. AAAnish Acharya6:36

       Incredible. And what about areas of concentration? Where is the most sort of interesting competitive focus?

   15. DPDavid Pawlan6:42

       So everyone right now, by and large, is focusing on the general application.

   16. AAAnish Acharya6:45

       Horizontal.

   17. DPDavid Pawlan6:46

       Like-

   18. AAAnish Acharya6:46

       Yep.

   19. DPDavid Pawlan6:46

       Yeah. Yeah.

   20. AAAnish Acharya6:47

       Okay.

   21. DPDavid Pawlan6:48

       Just trying to do, trying to do everything.

   22. AAAnish Acharya6:50

       And when you think about something like travel, just to pick on that, that's an infrequent high-value behavior. Do you think that that category ends up being organized more as a connector into the horizontal agent, or do you think they have the right to win as a general horizontal agent as well?

   23. DPDavid Pawlan7:05

       I think you're gonna maybe see potentially one winner as, as an independent agent, but by and large, I really think it is gonna be more of a connector. Um, so I have like s-seven or eight different group chats now with just individuals obsessed with assistants talking. So there's now over 1,200 people across all of the group chats just chatting over and over and over. Travel is the fourth most talked about use case, which is really interesting because when you look at like virality, it, it tends to be the number one that people are talking about of, "I checked into my flight for me. I was able to book my flight."

   24. AAAnish Acharya7:36

       Yeah.

   25. DPDavid Pawlan7:36

       But then you actually look at the day-to-day conversations of what people are really using it for and most curious about.

   26. AAAnish Acharya7:40

       Mm-hmm.

   27. DPDavid Pawlan7:40

       To your point, people aren't traveling every day, so it's, it's, it's more of a gimmick, right? It's, it's an attention grab.

   28. AAAnish Acharya7:46

       What are use cases one to three?

   29. DPDavid Pawlan7:49

       So number one is more, uh, just daily admin type stuff.

   30. AAAnish Acharya7:53

       Mm-hmm.
4. 9:14 – 14:53

   Cost savers beat time savers

   1. DPDavid Pawlan9:14

      dollars?"

   2. AAAnish Acharya9:15

      Yeah. Yeah. It's, it's really interesting 'cause one of the critiques, you know, Ben Thompson was on TBPN a few days ago talking about how most consumers aren't looking for productivity, uh, in their lives. They're looking to spend time, not save time, which I agree with.

   3. DPDavid Pawlan9:27

      Yep.

   4. AAAnish Acharya9:27

      But it does feel like-

   5. DPDavid Pawlan9:28

      Hundred percent

   6. AAAnish Acharya9:28

      ... finance is an area in which it is, there is a ton of administrative overhead for the average consumer. And if you look at, you know, the number of financial markets or financial sort of profit pools that are defined by consumer apathy or being uninformed, that's a lot of profit dollars that could be delivered back to the consumer, right? So-

   7. DPDavid Pawlan9:47

      Yep. Yep

   8. AAAnish Acharya9:48

      ... I do think that the, you know, while I generally agree with Ben that most consumers are looking for entertainment and to spend time, I think there are sort of defining aspects of the US consumer's life that are, you know, heavily administrative that these agents can really be a breakthrough for.

   9. DPDavid Pawlan10:04

      Totally. And I think that that kinda touches on the general thesis to where I think the winners will sit, and that is that, like to Ben's point, I, I agree. I, I think the general population does not care about being ten percent more efficient.

   10. AAAnish Acharya10:17

       Yeah.

   11. DPDavid Pawlan10:17

       You, you hire an assistant to allow it to be invisible, right? Like the, the best employee I've ever had are the ones that are just doing their work, getting things done. They update you, like, "Here, here's what I did," and you're like, "Wow, amazing." I like-- You don't, you don't hire someone because you enjoy managing them.

   12. AAAnish Acharya10:31

       Yeah.

   13. DPDavid Pawlan10:32

       And the best, most proactive use cases I'm seeing, I think do fall in the finance category.

   14. AAAnish Acharya10:39

       Yeah.

   15. DPDavid Pawlan10:39

       Um, and I think we're gonna see an explosion in a world though where it's not cost makers, it's cost savers. And so it's gonna be workflows where, um, like some u- cool use cases I saw, people are using it to go through their past year of receipts and file HSA reimbursements.

   16. AAAnish Acharya10:53

       Oh, cool.

   17. DPDavid Pawlan10:54

       Or-

   18. AAAnish Acharya10:54

       Yeah

   19. DPDavid Pawlan10:54

       ... um, one that I do is anytime I book a flight, if the flight pri-price drops-

   20. AAAnish Acharya10:59

       Yeah

   21. DPDavid Pawlan10:59

       ... I then have my assistant hit up the airline and get me a travel credit.

   22. AAAnish Acharya11:03

       Wow.

   23. DPDavid Pawlan11:04

       And, um, I have a friend-- This is my favorite use case I think I've, I've seen yet. He hooked up his Grok bot to his sprinkler system at his home and connected it to the weather system.

   24. AAAnish Acharya11:15

       Oh, smart.

   25. DPDavid Pawlan11:16

       And so now his sprinklers are dependent on the weather, and it's dropped his water bill by fifty percent.

   26. AAAnish Acharya11:22

       Yeah.

   27. DPDavid Pawlan11:22

       And so I think these like invisible type agents that are gonna be doing these cost-saving type workflows, um, fall within that finance category, but, but they're really gonna lean into these like cost-saving activities-

   28. AAAnish Acharya11:37

       Yeah

   29. DPDavid Pawlan11:37

       ... that create a world that is a lot more consumer aligned.

   30. AAAnish Acharya11:40

       Yeah. It'll be interesting too, like I think the American consumer, nobody wants to hear about saving money. People want-
5. 14:53 – 20:03

   Muse charm as Meta's data play

   1. AAAnish Acharya14:53

      I think it's fascinating. I mean, there... So a smart person said this, which is that every person who's working on a piece of hardware thinks that their hardware is the kind of be all, end all. Like the pendant is the ultimate thing. You know, the-

   2. DPDavid Pawlan15:05

      Right

   3. AAAnish Acharya15:05

      ... the watch strap is the ultimate thing. Um, so I don't think that that's right. I think, again, it's gonna be very personal preference driven, you know, just as jewelry is. Like, some people like to wear necklaces, and some people like to wear earrings. And I think the same way this kind of form factor is gonna manifest is gonna be very customer specific. But I think that there's value in having something that is sort of with you and ambient-

   4. DPDavid Pawlan15:27

      Mm-hmm

   5. AAAnish Acharya15:27

      ... and can capture all the kind of contacts and requests and, you know, promises and commitments and everything that happens through the day. I mean, I think we're going to have to sort of figure it out together in terms of privacy expectations and society. You know, you go to restaurants in Washington, and they take away your phone. Uh, maybe they're gonna be taking away your phone and your pendant. Um-

   6. DPDavid Pawlan15:45

      Right.

   7. AAAnish Acharya15:46

      But I think that there's actually something there with hardware, and I just like that we're being ambitious in that direction. You know, I think after 10 years of startups being discouraged from working on hardware, now we've got a lot of interesting new consumer efforts.

   8. DPDavid Pawlan15:57

      Right. I think it's, it's gonna be super interesting. I have a hot take thesis that this, uh, Muse Charm is actually less about trying to win the hardware game, and it's more about data collection in the real world for the Meta team in terms of like how the real world actually functions, given it has a camera and multiple microphones, and it's primary... I don't really see it being a mass adoption thing. I think it's going to get adopted by the Twitter bubble.

   9. AAAnish Acharya16:24

      Mm-hmm.

   10. DPDavid Pawlan16:24

       And they're gonna use it everywhere, and it's just gonna feed Meta with a ridiculous amount of data to fuel Zuckerberg's future metaverse of mapping out the actual world.

   11. AAAnish Acharya16:33

       But don't you think that they already get that from the glasses?

   12. DPDavid Pawlan16:36

       I think they, they do to some extent. But I don't know if... I mean, correct me if I'm wrong, but, uh, uh, are the glasses always gonna be on in the same way that this charm will be? 'Cause the-

   13. AAAnish Acharya16:46

       I don't think so. Yeah, it's a great point.

   14. DPDavid Pawlan16:48

       I, I think the charm is meant to be more as, you know, as you mentioned, it, it's an ambient 24/7-

   15. AAAnish Acharya16:54

       Yeah

   16. DPDavid Pawlan16:54

       ... companion versus the glasses are more action-oriented.

   17. AAAnish Acharya16:59

       It's gonna be fascinating. I thought the... You know, I've gotta try the VR release. That was interesting. But I actually think that the audio-only glasses might be a sleeper hit.

   18. DPDavid Pawlan17:08

       Yep.

   19. AAAnish Acharya17:09

       I think there's something-

   20. DPDavid Pawlan17:09

       Which-

   21. AAAnish Acharya17:09

       ... really compelling to that. I think people... You know, I mean, the vision of sort of Jane from Ender's Game was all about this sort of all-knowing audio-only companion.

   22. DPDavid Pawlan17:18

       Yeah.

   23. AAAnish Acharya17:18

       And I don't know. You know, I, I think there's a set of people that love to wear the kinda camera on their face, but I think others may be aware of the fact that it could make people uncomfortable.

   24. DPDavid Pawlan17:29

       Yep.

   25. AAAnish Acharya17:29

       And they're gonna like feeling like they have the technology connectivity without any of the social awkwardness of the camera.

   26. DPDavid Pawlan17:35

       Audio is incredible. I'm, I'm quite bullish on voice and audio. ChatGPT Voice yesterday dropped their, uh, ChatGPT Voice to allow connectors in, so you can connect to, like, your Gmail and Calendar.

   27. AAAnish Acharya17:52

       Yeah.

   28. DPDavid Pawlan17:52

       Um, I played around with it this morning, and to me, it was my second magic moment of this whole AI assistant space.

   29. AAAnish Acharya17:59

       Really?

   30. DPDavid Pawlan18:00

       Um, I was biking to work. Hands are busy. I wanna get stuff done, and I just start talking to ChatGPT Voice. I just open up a session, start chatting with it. And throughout my 30-minute bike ride to work, categorized my emails, uh, submitted them to different labels-
6. 20:03 – 26:01

   Silent agents in group chats

   1. AAAnish Acharya20:03

      So the next thing I wanted to talk to you about was social. Um, you know, we talked in multiplayer generally. You know, we talked about how iMessage is this sort of privileged place to be, which is actually one-

   2. DPDavid Pawlan20:12

      Right

   3. AAAnish Acharya20:12

      ... of the cool things about, um, Instinct. However, in my experience, building agents that you add to group chats somehow feels intrusive or like it diminishes social capital.

   4. DPDavid Pawlan20:23

      Super.

   5. AAAnish Acharya20:23

      Have you seen anything that works well, and what are your kind of theories for how these agents get, um, get to a multiplayer state?

   6. DPDavid Pawlan20:30

      A lot of people have tried it. I think I've seen three different approaches. Uh, the first approach is your traditional add it to a group chat, and it's just like the group chat and, and your companion. The second approach I've seen is how Instinct did it, where you have, like, an agent network where you invite another agent and they're talking behind the scenes on your behalf, and they'll update you as to what's going on. The third way that I've seen it, which I think is the most interesting, uh, it's a new one called Dock, uh, by this guy Shane Mack, um, I think also an a16z, uh, a16z company, um, XMTP, and they are approaching it more like Granola. So you add an agent to a group chat, but that agent is silent and it's purely a listener. It's taking notes on what people are talking about, and if it has an action item, it independently will ping the person in a separate message thread. And then if you wanna see what people are talking about, you can go into the actual docks and see what it's taken notes on. And that way it's more of, again, it's, it's your invisible agent. You don't know it's there. It's doing all the admin work that you would want out of a, a multiplayer function, and if it needs action items, it doesn't bother the majority of the group. Really, really cool approach.

   7. AAAnish Acharya21:38

      I've gotta try that out. I love that. And I love that it's an a16z company already, of course. Um-

   8. DPDavid Pawlan21:42

      Of course

   9. AAAnish Acharya21:43

      ... you know, uh, g- my theory on this, if you look at this, and Nir from Mobo said it and he, you know, I think he's right, which is the progress that models are making on verifiable domains like coding are of course exponential. But the progress-

   10. DPDavid Pawlan21:54

       Mm-hmm

   11. AAAnish Acharya21:54

       ... they've made on just prose quality, and even, like, bedside manner, has maybe plateaued or maybe is even getting worse. So I actually think that with the, the models as they are today, and perhaps with our own expectations, you know, in terms of these social dynamics, I don't think there's a lot of ways that the agents can contribute and enhance the sort of social connectivity of the group. You know, conversely-

   12. DPDavid Pawlan22:18

       Totally agree

   13. AAAnish Acharya22:18

       ... I think agents that are very utilitarian, you know, one of the experiments I've been doing is adding it... I'm a collector. You know, I collect records and a bunch of other things. Adding an agent to the chats where I talk to my fellow collector friends-

   14. DPDavid Pawlan22:31

       Mm-hmm

   15. AAAnish Acharya22:31

       ... and trying to catalog our re- respective collections and our tastes, and I haven't quite hit it, but it at least feels like it's something that's genuinely additive to the group rather than-

   16. DPDavid Pawlan22:39

       Mm-hmm

   17. AAAnish Acharya22:39

       ... you know, this sort of low EQ robot that's chattering when we don't want it to.

   18. DPDavid Pawlan22:45

       Yep, totally. You'll-- You should, you should give, uh, you should give Dock a try. I think, I think you're gonna be quite fascinated by it.

   19. AAAnish Acharya22:52

       I will, yeah. Yeah, the other interesting take that I heard this week was that, you know, something about messaging in particular is i- it doesn't lend itself to these inter- agent interactions because in messaging it's as if somebody has the mic-

   20. DPDavid Pawlan23:05

       Mm-hmm

   21. AAAnish Acharya23:05

       ... and it feels uncomfortable to give the agent the mic. Whereas-

   22. DPDavid Pawlan23:09

       Mm

   23. AAAnish Acharya23:09

       ... if you look at something like maybe closer to a Discord or even a traditional web forum, that's actually something where an agent can make a post, and you can either-

   24. DPDavid Pawlan23:17

       Right

   25. AAAnish Acharya23:17

       ... engage with the post or not, Reddit style, but for some reason it feels less intrusive than group chat. I don't know.

   26. DPDavid Pawlan23:23

       Yeah, interest-- It's almost, it's almost as if we're trying to humanize these agents a little too much.

   27. AAAnish Acharya23:28

       That's right.

   28. DPDavid Pawlan23:28

       Like, and I think that comes to another component where if you look at the actual design of the character of the agent, I see some companies that have it try to be like an AI-generated human.

   29. AAAnish Acharya23:37

       Yeah.

   30. DPDavid Pawlan23:37

       And then you have other companies like Muse that it's this, like, adorable yeti.
7. 26:01 – 32:21

   Proactivity is the real moat

   1. DPDavid Pawlan26:01

      I think there is massive defensibility around proactivity. I think that's actually going to be something that separates the winner from the, you know, the, the meat of the pack. The agent that can be most proactive, that can serve as an, a, an invisible assistant and start doing things on your behalf without you even asking.

   2. AAAnish Acharya26:17

      Mm-hmm.

   3. DPDavid Pawlan26:18

      I, I think the best, like, gimmick, cool aha moment that we've seen so far is checking into your flight for you.

   4. AAAnish Acharya26:24

      Mm-hmm.

   5. DPDavid Pawlan26:24

      Um, to your point though, it really does come down to two categories. There's some workflows where you want to retain control and you don't really want an agent to be acting too proactive on your behalf.

   6. AAAnish Acharya26:36

      Yeah.

   7. DPDavid Pawlan26:36

      And I think those are workflows that require a, a change in action, uh, on your side. So maybe that is an agent identifies that the insurance you're using is charging too much money and thinks you should switch insurances.

   8. AAAnish Acharya26:49

      Yeah.

   9. DPDavid Pawlan26:49

      It should probably get your permission before it actually makes that switch because that's, that's a direct action on your behalf that impacts you. However, the proactiveness of, "Hey, I drafted this email for you"-

   10. AAAnish Acharya26:59

       Mm-hmm

   11. DPDavid Pawlan26:59

       ... or, "I got a flight credit on your behalf."

   12. AAAnish Acharya27:02

       Yeah.

   13. DPDavid Pawlan27:02

       There's no action needed on your side. It's just saving you money. It's saving you time. Um, so I think it'll be interesting to see, like, how do we really categorize and break down those, those type of behaviors.

   14. AAAnish Acharya27:12

       Yeah.

   15. DPDavid Pawlan27:12

       But it will be a very fine line because if you, if you cross that line once, I think you immediately, you lose all trust with your user.

   16. AAAnish Acharya27:21

       Yeah. It'll be interesting. You know, we were joking internally, like we're days away from an agent messaging someone saying, "I noticed you weren't that into her, so I went ahead and broke up with her for you."

   17. DPDavid Pawlan27:29

       Yep.

   18. AAAnish Acharya27:30

       You know, so like the-

   19. DPDavid Pawlan27:30

       Saw that one.

   20. AAAnish Acharya27:31

       It, it's going to happen, man. But, you know, I think a lot of the magic comes from the presumptuousness, and I think that if you didn't see people posting on X about, "Oh, the agent did this, the agent did that," it would probably be a sign that the agents are not pushing hard enough in this direction.

   21. DPDavid Pawlan27:47

       Right.

   22. AAAnish Acharya27:47

       Like, I think there's go... And actually I'd be curious to know, first of all, I'm s- you know, a little suspicious of whether the, the Bong Chang post was even real. Um-

   23. DPDavid Pawlan27:56

       Yep

   24. AAAnish Acharya27:56

       ... and for folks who don't know, there's, there's a person who tweeted that Instinct checked him into a flight and hallucinated his middle name, um, as Bong Chang, and he wasn't able to get on the flight. So I'm not sure if that's just shitposting or if that really happened. Um, but I, I'd be curious to know if that person is still using Instinct. I'm guessing they are.

   25. DPDavid Pawlan28:14

       I would assume so, purely given the traction of that post-

   26. AAAnish Acharya28:17

       [laughs]

   27. DPDavid Pawlan28:17

       ... that they're probably feeding for more-

   28. AAAnish Acharya28:19

       I see

   29. DPDavid Pawlan28:19

       ... more content there.

   30. AAAnish Acharya28:19

       If nothing else, at least just a source of comedic popular tweets.
8. 32:21 – 40:22

   Assistant vs agent, defined

   1. DPDavid Pawlan32:21

      to you?

   2. AAAnish Acharya32:21

      Oh, that's such a great question, man. I mean, to me, assistant is a sort of lesser form than agent. Um, you know, for me, an agent is somebody... You could imagine them being a peer in a social group.

   3. DPDavid Pawlan32:34

      Mm-hmm.

   4. AAAnish Acharya32:34

      You know? And maybe we need a better word than agent, but an assistant can only sort of definitionally do what it, what you ask it to do. It can assist you-

   5. DPDavid Pawlan32:42

      Right

   6. AAAnish Acharya32:42

      ... in doing something that you've directed it to do. Why- While an agent has agency, um, and can just make good things happen in the world, and, and maybe this-

   7. DPDavid Pawlan32:51

      Mm-hmm

   8. AAAnish Acharya32:51

      ... parallels a little bit, you know, the sort of agents and AI in the enterprise, where they've sort of started as interns, and through, you know, doing work and improved intelligence, they're able to get promoted into doing higher order forms of work in the enterprise. Like, what does it mean for an assistant and later an agent to be promoted in the consumer's life to do more-

   9. DPDavid Pawlan33:14

      Right

   10. AAAnish Acharya33:14

       ... specialized and delicate work?

   11. DPDavid Pawlan33:17

       I'm, I'm super aligned. I'm, I'm also very interested what ramifications it might have in just, like, the social layer-

   12. AAAnish Acharya33:25

       Yeah

   13. DPDavid Pawlan33:25

       ... of humanity, where, you know, does the word agent allow us to n- you know, not personify, uh, AI enough? You know-

   14. AAAnish Acharya33:36

       Yeah

   15. DPDavid Pawlan33:36

       ... is, is assistant... Does it add too much human to the experience, and, and does that make society uncomfortable? Um, it'll be interesting to see, like, how the... We're in bubbles. You're in a more bubble. You're in SF, so you're in, like-

   16. AAAnish Acharya33:48

       [laughs]

   17. DPDavid Pawlan33:48

       ... the tech hub of, of the world. Um, I would say at-- New York is a little behind SF, and then, you know, the rest of the world catches up after. So it'll, it'll be interesting to see how people actually think about, uh, the vernacular of the space.

   18. AAAnish Acharya34:01

       I don't know if it's a bubble. I just think it's like, it's like the future, you know? It's like, uh-

   19. DPDavid Pawlan34:04

       Right

   20. AAAnish Acharya34:04

       ... you know, we're, we're in the near future. Um-

   21. DPDavid Pawlan34:06

       Yeah.

   22. AAAnish Acharya34:07

       Yeah, I don't know. I, I actually think that it could increase a l-- and improve a lot of social dynamics as well, um, because you start to think-

   23. DPDavid Pawlan34:13

       Totally

   24. AAAnish Acharya34:13

       ... about the agent as a non-human. It can provide a layer of social indirection. You know? So there might be something that's sort of awkward for me to say to you or an uncomfortable social dynamic that's occurring in a group. And with a very carefully designed agent, I think the agent can, you know, help to, I don't know whether it's provide feedback or sort of organize-

   25. DPDavid Pawlan34:36

       Right

   26. AAAnish Acharya34:36

       ... a conflict in a way that feels non-emotional because you know that it's not-

   27. DPDavid Pawlan34:39

       It's like an arbiter of confrontation.

   28. AAAnish Acharya34:41

       Potentially, yeah. Yeah, no, I, you know, I'm not advocating for a more passive-aggressive sort of social system, but I do think it's interesting that they can be a sort of source and a destination for social indirection, if that makes sense.

   29. DPDavid Pawlan34:54

       Right. Right. And I think that it will have a lot of, like, significantly positive influences in the world. How do you see AI impacting, right, if we look five years down the line?

   30. AAAnish Acharya35:07

       Yeah.
9. 40:22 – 47:35

   Amazon blocks Muse, Shopify opens the door

   1. AAAnish Acharya40:22

      to be?

   2. DPDavid Pawlan40:23

      Yeah. So I think, you know, first off, Shopify and Amazon are two completely different business models. You have Shopify that's hyper-focused on more democratizing commerce. You have Amazon that makes all of their money on ad revenue.

   3. AAAnish Acharya40:34

      Mm-hmm.

   4. DPDavid Pawlan40:34

      And so the, the whole ad structure of commerce is gonna be really fascinating to watch because when you remove human eyeballs, it defeats the entire purpose of the system.

   5. AAAnish Acharya40:43

      Mm-hmm.

   6. DPDavid Pawlan40:44

      And so I think that's where Amazon was coming from. Like, if you let Muse and these agents start to purchase without them getting any ad revenue out of that-

   7. AAAnish Acharya40:53

      Mm-hmm

   8. DPDavid Pawlan40:53

      ... it really takes a lot of the profit out of the experience. So think there's likely gonna have to be some new paradigm for how they're able to profit in this world where agents are, are purchasing on their behalf versus a Shopify that is empowering the everyday individual to sell as much as possible, and agents democratize this space even further. So it's, it's just unbelievably advantageous. Um, I think it's gonna be even more interesting when we look at industries that have yet to be touched, and that's, you know, something we chatted about, uh, last week, was restaurants, where if you look at the booking space, right, like you go to make a reservation. I, I think we saw Resy, uh, Resy started shutting people's accounts down 'cause they were using browser use and they didn't want bots. So it defeats the whole, the whole business of if you just let agents take these reservations instantaneously-

   9. AAAnish Acharya41:47

      Mm-hmm

   10. DPDavid Pawlan41:47

       ... then it kinda defeats the purpose of the platform, of this, like, human-oriented booking experience.

   11. AAAnish Acharya41:52

       Mm-hmm.

   12. DPDavid Pawlan41:53

       And so what happens, though, when everyone has an agent? Now everyone's on the same playing field. Everyone can go to book the restaurant at the same time. Do we enter a world where, one, power goes back to the restaurants, and they can maybe choose who they wanna give the reservation to based off of loyalty or average spend or whatever it be?

   13. AAAnish Acharya42:12

       Yeah.

   14. DPDavid Pawlan42:12

       Or two, do we go into this world of bidding, where everything becomes a bidding war between these agents?

   15. AAAnish Acharya42:18

       Mm-hmm.

   16. DPDavid Pawlan42:18

       Um, curious your thoughts on kinda what that future looks like.

   17. AAAnish Acharya42:21

       Yeah, I think y-you're super right. I mean, very interesting 'cause I think there'll be, um, things that are supply constrained, like hot restaurant tables, things that are demand constrained, like people that wanna fly to SF tomorrow. I think for restaurants, if you think about with perfect information, who do they want? To your point, it's the highest AOV, highest LTV, which means AOV over multiple visits, plus they actually wanna ensure that they're at, you know, uh, near 100% capacity as much as possible. So that's actually a, a more sophisticated calculation, and I don't quite know how they're gonna do it. But I'm sure that- Proprietary supply is gonna become more and more important, you know?

   18. DPDavid Pawlan42:57

       Right.

   19. AAAnish Acharya42:57

       Versus relying on kind of friction and motivation from the end consumer to act as something that sort of prevents this DDoS. So I think supply-constrained sort of aspects of commerce will be really interesting, and then demand-constrained will be completely different. You know, where you almost have a group buying experience where you have a set of buyers that are willing to buy a product or a service or an experience, and then you have the supply side, the merchants that could potentially fulfill that need, come in, you know, bid to see who can do it, the best experience, maybe at the lowest price.

   20. DPDavid Pawlan43:30

       Right.

   21. AAAnish Acharya43:30

       So we've always had this kind of aggregation of demand, but we've never really had aggregation of supply in the same way, especially not in an auction system to benefit the consumer.

   22. DPDavid Pawlan43:38

       Mm-hmm.

   23. AAAnish Acharya43:38

       So I think that's really interesting. You know, in the Amazon/Shopify thing, I think that the Amazon... Amazon probably is rightly taking the bet that they don't wanna be disintermediated and that they'll lose not just advertising revenue, but impulse shopping.

   24. DPDavid Pawlan43:52

       Right.

   25. AAAnish Acharya43:52

       I'm kinda curious to know if the agents themselves will be impulse shoppers to some extent, because I think the point around proactivity means the agents are gonna try to make delightful guesses and, you know, what is more delightful than a surprise or a gift?

   26. DPDavid Pawlan44:07

       Right.

   27. AAAnish Acharya44:07

       So I'm guessing that one of the really interesting, um, sort of dynamics we're going to play out is that these agents are not perfect reflections of their principles. They're not perfectly rational. They're going to be new rational and, uh, non-rational in completely new ways, and I don't know that things like marketing, things like impulse purchases, things like advertising won't matter. I just think they need to be transformed.

   28. DPDavid Pawlan44:29

       Totally, and I, I think that opens up a whole new conversation as well, which is what is the recommendation engine of this agentic commerce space actually look like?

   29. AAAnish Acharya44:38

       Yeah.

   30. DPDavid Pawlan44:38

       Because AI and LLMs feels like it's kind of broke the internet in terms of quality search. But then if you use an agent and you say, "Hey, buy me some white socks"...
10. 47:35 – 50:00

    The $20/day agent economics

    1. DPDavid Pawlan47:35

       We touched on the, the economics of the agents. Of the 122 that I have looked through, so I've personally tested 26 of them.

    2. AAAnish Acharya47:45

       Okay.

    3. DPDavid Pawlan47:46

       Of the 122, uh, 65 are paid.

    4. AAAnish Acharya47:51

       Interesting.

    5. DPDavid Pawlan47:52

       35 of them are fully paid, 30 are a freemium model, so once you hit a limit, then you have to pay. Only 13 of them are actually free. When you have Muse and Instinct that are both free, that are also the dominant ones, and then you have OpenAI that supposedly is gonna be releasing something cool maybe next week, who knows?

    6. AAAnish Acharya48:10

       Mm-hmm.

    7. DPDavid Pawlan48:12

       How does a long-tail startup actually win this space? And why are they charging money when the big dogs are giving it to you for free?

    8. AAAnish Acharya48:23

       Man, it's gonna be really challenging. You know, by our estimate, it's costing something like $20 per user per day to do this in a really-

    9. DPDavid Pawlan48:30

       It's crazy

    10. AAAnish Acharya48:30

        ... ambitious way, you know, potentially hundreds of millions a year for a startup. I mean, I think the two positive trends to bet on are that browser use should get... it should be deflationary, get exponentially cheaper very rapidly.

    11. DPDavid Pawlan48:43

        Right.

    12. AAAnish Acharya48:43

        Now, if you're a startup that is raising today that's betting on that happening in six months, maybe it's a little bit of a game of chicken, but we have seen kind of token prices depress dramatically and sort of emergent-

    13. DPDavid Pawlan48:53

        Right

    14. AAAnish Acharya48:54

        ... capabilities depress, so the price of them. So I think it's very possible that browser use gets cheap enough that more, um, more products can offer this for free. I, I guess the flip, though, is that I don't love the idea of, you know, a customer subsidy being the primary value prop. So I'd love to see the agent that costs $1,000 a month that the consumer is so excited about that they're willing to pay. Like, people spend-

    15. DPDavid Pawlan49:16

        Totally

    16. AAAnish Acharya49:17

        ... $1,000 a month on a lot of different things that are, you know, not necessarily necessities. They're sort of desires. So what is the agent that is exciting enough that you're willing to pay that kind of price for it, and then that agent will benefit from both extreme market fit as well as sort of deflating costs.

    17. DPDavid Pawlan49:35

        Right. Right. I think it'll be interesting to see.

    18. AAAnish Acharya49:37

        Super interesting. Well, David from Assistant Bench, make sure everybody checks it out. Thank you so much for joining us. We're gonna do this frequently. I mean, I feel like we could do this every week, dude. Like, things are happening-

    19. DPDavid Pawlan49:46

        Totally

    20. AAAnish Acharya49:46

        ... every single day. So please follow him on X. Follow me as well. We'll all keep up to speed and sort of learn together in the X community and, uh, and sort of happy day to you and your agents.

    21. DPDavid Pawlan49:57

        Appreciate it. Same to you. This was fun.

    22. AAAnish Acharya49:58

        All right, brother. Thank you.

    23. DPDavid Pawlan50:00

        Awesome.

Episode duration: 50:14