The $700 Billion AI Productivity Problem No One's Talking About
The a16z Show
The baseline problem and FTE equivalence
Russ and Alex discuss baseline productivity, FTE comparisons, and correlating AI usage with work tonnage.
Russ Fradin sold his first company for $300M. He’s back in the arena with Larridin, helping companies measure just how successful their AI actually is.
In this episode, Russ sits down with a16z General Partner Alex Rampell to reveal why the measurement infrastructure that unlocked internet advertising's trillion-dollar boom is exactly what's missing from AI, why your most productive employees are hiding their AI usage from management, and the uncomfortable truth that companies desperately buying AI tools have no idea whether anyone's actually using them.
The same playbook that built comScore into a billion-dollar measurement empire now determines which AI companies survive the coming shakeout.
Timecodes:
0:00 — Introduction
2:15 — Early Career, Ad Tech, and Web 1.0
3:09 — Attribution Problems in Ad Tech & AI
4:30 — Building Measurement Infrastructure
6:49 — Software Eating Labor: Productivity Shifts
8:51 — The Challenge of Measuring AI ROI
14:54 — The Productivity Baseline Problem
18:46 — Defining and Measuring Productivity
21:27 — Goodhart’s Law & the Pitfalls of Metrics
22:41 — The Harvey Example: Usage vs. Value
25:18 — Surveys vs. Behavioral Data
28:38 — Interdepartmental Responsiveness & Real-World Metrics
31:00 — Enterprise AI Adoption: What the Data Shows
33:59 — Employee Anxiety & Training Gaps
38:31 — The Nexus Product & Safe AI Usage
42:08 — The Future of Work: Job Loss or Job Creation?
44:40 — The Competitive Advantage of AI
53:45 — The Product Marketing Problem in AI
55:00 — The Importance of Specific Use Cases
Resources:
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Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see http://a16z.com/disclosures.
Stay Updated:
Find a16z on X
Find a16z on LinkedIn
Listen to the a16z Show on Spotify
Listen to the a16z Show on Apple Podcasts
Follow our host: https://twitter.com/eriktorenberg
Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures.
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