Navigating the Evolving Landscape of AI and Investment Strategies

Sarah Tavel thinks it's criminal that ChatGPT isn’t inherently social.

There’s no easy way to discover great prompts or share the ones that worked. As a venture partner at Benchmark, Sarah believes that the next wave of consumer AI will be built on this missing social layer—by product-driven founders who understand people, not just models. 

Sarah has seen this shift before. As one of Pinterest’s first product managers, she saw the company grow from a niche consumer tool to a beloved global community. On this episode of Every's podcast AI & I, we talk about how she’s applying the lessons she learned to AI—and what it takes to build a breakout consumer AI app today. 

We get into:

• Why product geniuses win as new tech matures. In the early days of a new technology, companies win by wrangling raw innovation into something usable. But as the infrastructure matures, Sarah says the edge shifts to product thinkers—founders who turn new capabilities into delightful user experiences.
• The future of prompting is social. When Sarah had to dig through Reddit to find a prompt to help her interpret her blood test results, she saw a gap: The best prompt creators are invisible. Sarah bets that a social AI product that makes them discoverable and followable would gain traction.
• Sarah’s method to spot exceptional founders. Sarah backs founders for whom building a company feels like a calling—or even an affliction. These are people who have fallen in love with the process and are obsessed with learning how to grow alongside their companies.
• How to tell if your startup really has network effects. Founders raising money love to say that their business has “network effects.” Sarah has learned to look for early signs they’re real—like traction in a small, white-hot segment of the market. If there’s no evidence the flywheel is already starting to spin, it’s probably not a network effect.
• How LLMs change the way the best VCs invest. Sarah thinks the future of venture will be shaped by how well VCs can turn the decisions they make into training data. After every pitch, she logs what she liked, what she didn’t, the deal terms, and her reasoning. Over time, she’s building a dataset of her own judgment—one an LLM could help her use to pressure-test decisions and avoid past mistakes.

This is a must-watch for if you’re building a consumer AI product and want to see ahead of the curve.

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Timestamps:

1. Introduction: 00:01:10
2. Why the future of consumer AI belongs to founders with product intuition: 00:02:26
3. What Sarah sees as ChatGPT’s biggest weakness: 00:11:09
4. How Sarah would design a consumer AI app with social DNA: 00:18:45
5. The kind of founders Sarah invests in: 00:25:04
6. How to know if your startup’s network-effects are real: 00:29:26
7. What’s catching Sarah’s eye beyond AI: 00:36:33
8. How AI will change the way top venture capitalists invest: 00:41:35

Links to resources mentioned in the episode:

• Sarah Tavel: @sarahtavel
• Sarah’s substack: ⁠https://www.sarahtavel.com/⁠ 
• Eugene Wei’s essay about Status-as-a-Service: ⁠https://www.eugenewei.com/blog/2019/2/19/status-as-a-service⁠ 
• The book Sarah talks about in the context of founders who become CEOs in pursuit of status: ⁠The Five Temptations of a CEO⁠