Casey Winters Riffs on Whether Consumer Is Back and What It Means for Product Leaders? 🤔

Casey Winters Riffs on Whether Consumer Is Back and What It Means for Product Leaders? 🤔

Ravi Mehta teams up with Fareed Mosavat once more. This week, Ravi and Fareed are joined by Casey Winters, former CPO at Eventbrite and growth expert at Pinterest and Grubhub.

🔍 The Big Question for Today: Is consumer tech experiencing a resurgence? With the advent of AI, some believe we're on the brink of a consumer tech revolution. But is this really the case?

🤷 Is consumer back? Sort of… 🤷

The Good News 🎉 People are spending more time online and are more willing than ever to try new products, including paid products. The days of freemium being the only way to acquire customers is seemingly behind us. And, the rise of AI has opened up exciting opportunities for product-minded founders to create value for consumers.

The Bad News 😬 The landscape is dominated by big players like Apple, Amazon, and Epic, making it hard for new entrants. Plus, the journey from seed stage to a mass-market consumer platform is long and fraught with risk. As a result, we’re still seeing few and far between VC backed consumer start ups. But, just because consumer is largely not investable, doesn’t mean it isn’t vibrant and growing.

🤖 AI is Changing the Game, But Not the Rules 🤖

AI is creating new opportunities in consumer tech, but it doesn't change the fundamental rules of the game. You still need a product that performs well and can leverage existing growth channels.

“There's basically been a pretty big dearth of consumer style businesses since 2016. Certainly over the last five years, there's been relatively little to look at. The question is, does AI change this? … I think my default answer is no, it doesn't.

I think when new technologies come out, certainly at the platform shift level like AI seems to be, there's a lot of word of mouth growth, but I think if we look back to the last couple of platform shifts that we've been a part of, which is mobile and the internet, the word of mouth doesn't last. That word of mouth needs to sequence to like a scalable growth loop, and I just don't know where the growth loops for consumer products are going to come from.” - Casey

📦 The Real Challenge is Distribution 📦

Distribution remains a significant hurdle for consumer tech. With big incumbent players dominating the space, new entrants need to think small initially, achieve a tight product-market fit, and then scale from there. Casey isn’t seeing any new low CAC channels that work at scale, but if you find one, let us know!

💡 Bootstrap and Think Small Initially 💡

For consumer entrepreneurs, the advice is to bootstrap and start small. Find an area where you can build something really interesting and get to a tight product-market fit. Then, grow from there primarily on word of mouth and leverage lower barrier to entry channels like TikTok search algorithm to throw gas on the fire. Then, figure out the scalable channels over time. Not every business needs to be venture scalable out of the gate.

🏆 High Bar for Product Quality 🏆

The bar for product quality in consumer tech is higher than ever. A great product is not just for generating word of mouth, but it also creates a better ability to leverage the current growth channels that exist - virality, content loops, or paid acquisition.

Not All Verticals Are Equal…

💼 Potential of Prosumer Products 💼

Prosumer products, which blend professional and consumer features, could be a promising area for growth. These products need to retain and monetize users effectively to compete in the current market.

🎮 Game On 🎮

Gaming is hot, but there’s a debate on whether to go multiplayer vs. single player. The gaming industry has seen some significant successes, with small teams creating viral games. However, it's a boom-and-bust industry, making it a risky venture.

When bootstrapping a consumer business, starting with a single-player product can be a smart move. These products don't require a large installed base or active user base to deliver a good user experience.

But, multiplayer also has its advantages in stickiness, but these require significantly more start-up capital.

Intrigued? Tune in to our podcast for the full discussion and get ready for part 2 of our conversation with Casey Winters.