Why Companies Are Becoming a Series of Loops | Anish Acharya on Lenny’s Podcast

Lenny Rachitsky (0:00)

There's a lot of fear and worry about the future with AI. I want to talk about this idea that if you fall behind, you're going to become part of this permanent underclass.

Anish Acharya (0:09)

It's a funny dark fantasy that we seem to have as Silicon Valley collectively. Like things have never been better by almost every measure. This is a technology that really amplifies our agency. It kind of unbundles skill from desire. Not only can we dramatically drive productivity, we can dramatically drive ambition.

Lenny Rachitsky (0:25)

Can you get too ambitious? Is there like a limit?

Anish Acharya (0:27)

In the old days, three years ago, we would see a company, and if what they were trying to do was too ambitious, we would not engage. Today, we're almost seeing the opposite problem. An idea that's too small is not something that we want to engage with.

Lenny Rachitsky (0:39)

Do you have this interesting take that company building more and more is going to become this kind of series of creating loops?

Anish Acharya (0:45)

We're going to see this sort of cascading set of everything from a loop per person to loops that can run large parts of the company. With that said, I think humans are a critical ingredient. The loop will help you climb to the local maxima, but then it plateaus. You need human intuition, you need somebody to actually help you land at the base of the next hill.

Lenny Rachitsky (1:03)

We have this take that the big opportunity is this idea of, loop make me happier.

Anish Acharya (1:07)

We believe that people want to be more productive, but they don't. I think more people want to spend time than save time. So I think that the opportunity for this technology is the basics of consumer need. How do we feel more connected, more loved, that we make progress, how do we have fun? I don't think it's a model or a capability challenge, it's just a product design challenge.

SPEAKER_3 (1:28)

Today's episode comes from our Recommended Listening Series, where we feature standout conversations from people across our broader network.

This one comes from Lenny's Podcast, where Lenny Rachitsky sits down with A16z general partner Anish Acharya for a wide-ranging conversation about AI, company building, and why Anish thinks we should be more ambitious about what this technology makes possible. They get into Anish's idea that companies are becoming a series of loops, with AI increasingly handling repeatable work, while humans step in with judgment, intuition, and new ideas. They also discuss why he's skeptical of fears around an AI permanent underclass, where the biggest opportunities in consumer AI may emerge, and why moats are often discovered rather than designed. And his advice for navigating all of this is pretty simple, build something. The fastest way to understand where AI is going is to use the models, ship things, and develop your own intuition.

Lenny Rachitsky (2:26)

Today, my guest is Anish Acharya, Anish's general partner at A16z, where he focuses on consumer investing. He is one of the most insightful, thought-provoking, mind-expanding, in the weeds product investors I've met. He's been at A16z for over seven years now. And unlike a lot of VCs, and why I loved having Anish on the podcast is that he is a long-time product builder and founder. He founded a company called Social Deck, which he sold to Google and then ended up leading a number of efforts within Google. Then he started a new company called Snowball, which he then again sold, this time to Credit Karma, where he moved to VPR product and then GM of the broader consumer product and the whole entire credit card business. This conversation will get your mind buzzing. Anish, thank you so much for being here and welcome to the podcast.

Anish Acharya (3:13)

Thank you, Lenny. I'm so excited to be here. Thrilled.

Lenny Rachitsky (3:16)

I want to start with a very light topic. I want to talk about this meme of the permanent underclass.

It's kind of this joke that people have joke about, this idea that if you kind of fall behind and aren't just like on top of all the latest AI tools, aren't becoming the most productive person ever, you're going to become part of this permanent underclass and fall behind and have a really hard time. And some people joke about it. I think a lot of people take this really seriously and stresses a lot of people out. How real of a concern do you think this really is? How seriously do you think people should take this?

Anish Acharya (3:49)

Not very seriously. And it's a funny dark fantasy that we seem to have as Silicon Valley collectively. Things have never been better, really, by almost every measure, by how distributed all the opportunities are, by the kind of technology we have access to, to the types of ambition we're allowed to have, and to the number of companies that are independently working on things that are winning. And yet, there's this discussion of permanent underclass, being outside of the light cone, I've heard it. And it's not just something for deep insiders or outsiders, it feels like there's a real fear kind of from researchers at foundation model labs, all the way through to the Silicon Valley layman. I mean, here's like a couple of points that I think are really important. So first, I think the last era of tech was a lot more centralized. If you look at network effects, that's sort of the gold standard. You worked on a network effects product.