The AI Architect — Bret Taylor

Bret Taylor
You’re like, I bet a lot of people are experiencing the same pain point. What if I make a thing to solve that? It’s just very incremental. And I always like to use the metaphor, you can sell coffee beans, roasted coffee beans. You can add some value. You took coffee beans and you roasted them. And roasted coffee beans largely are priced relative to the cost of the beans. Or you can sell a latte. And a latte is rarely priced directly as a percentage of coffee bean prices. In fact, if you buy a latte at the airport, it’s a captive audience. So it’s a really expensive latte. And there’s just a lot that goes into like, how much does a latte cost? And I bring it up because there’s a supply chain from growing coffee beans to roasting coffee beans to like, you know, you could make one at home or you could be in the airport and buy one. And the margins of the company selling lattes in the airport is a lot higher than the, you know, people roasting the coffee beans. And it’s because you’ve actually solved a much more acute human problem in the airport. And it’s just worth a lot more to that person in that moment. It’s kind of the way I think about technology too. It sounds funny to liken it to coffee beans, but you’re selling tools on top of a large language model. Yeah. In some ways your market is big, but you’re probably going to like be price compressed just because you’re sort of a piece of infrastructure. And then you have open source and all these other things competing with you naturally.

Bret Taylor
And I always like to use the metaphor, you can sell coffee beans, roasted coffee beans. You can add some value. You took coffee beans and you roasted them. And roasted coffee beans largely are priced relative to the cost of the beans. Or you can sell a latte. And a latte is rarely priced directly as a percentage of coffee bean prices. In fact, if you buy a latte at the airport, it’s a captive audience. So it’s a really expensive latte. And there’s just a lot that goes into like, how much does a latte cost? And I bring it up because there’s a supply chain from growing coffee beans to roasting coffee beans to like, you know, you could make one at home or you could be in the airport and buy one. And the margins of the company selling lattes in the airport is a lot higher than the, you know, people roasting the coffee beans. And it’s because you’ve actually solved a much more acute human problem in the airport. And it’s just worth a lot more to that person in that moment. It’s kind of the way I think about technology too. It sounds funny to liken it to coffee beans, but you’re selling tools on top of a large language model. Yeah. In some ways your market is big, but you’re probably going to like be price compressed just because you’re sort of a piece of infrastructure. And then you have open source and all these other things competing with you naturally. If you go and solve a really big business problem for somebody that’s actually like a meaningful business problem that AI facilitates, they will value it according to the value of that Business problem. And so I actually feel like people should just stop. You’re like, no, that’s unfair. If you’re searching for an idea, people, I love people trying things, even if I mean, most of the, a lot of the greatest ideas have been things no one believed in. So I like, if you’re passionate about something, go do it. Like, who am I to say? Yeah, or Gmail, like Paul, Some of it’s lore at this point, but like Gmail is Paul’s own email for a long time. And then I amusingly, and Paul can correct me, I’m pretty sure you sent her on a link. And like the first comment was like, this is really neat. It would be great if it was not your email, but my own. I don’t know if it’s a true story. I’m pretty sure. Yeah, I’ve read that before. So scratch your own itch, fine.

Bret Taylor
Like don’t listen to anybody. In fact, but if you’re trying to start, you know, an enduring company, solve an important business problem. And I do think that in the world of agents, the software industries have shifted where you’re not just helping people be more productive, but you’re actually accomplishing tasks autonomously. And as a consequence, I think the addressable market has just greatly expanded just because software can actually do things now and actually accomplish tasks. And how much is coding autocomplete worth? A fair amount. How much is the eventual, I’m certain we’ll have it, the software agent that actually writes the code and delivers it to you, that’s worth a lot. And so, you know, I would just maybe look up from the large language models and start thinking about the economy and, you know, think from first principles. I don’t want to get too far afield, but just think about which parts of the economy will benefit most from this intelligence and which parts can absorb it most easily. And what would an agent in this space look like? Who’s the customer of it? Is the technology