Why Marissa Mayer Is Betting Big On Consumer Tech

0:00Let's talk with Marissa Meyer, the longtime Google executive and former Yahoo CEO about whether new consumer technology stands a chance and where the AI race goes next. that's coming up right after this. Welcome to Big Technology Podcast, a show for cool-headed, nuanced conversation of the tech world and beyond. Marissa Meyer is here. She's the co-founder and CEO of Sunshine, and before that was Google employee number 20, holding an array of executive positions there for 13 years before becoming the president and CEO of Yahoo. Now at Sunshine, she has a new contacts app, a new photo sharing app, and more.

0:36And she's here to talk all about that and plenty more with us today. Marissa, welcome to the show. Thank you so much for having me. Thanks for being here. You know, you're making a bold bet introducing apps in the consumer space where so many venture capitalists and founders seem to have written off the space entirely. Let me just read you what MG Siegler, who's a venture partner at GV, which is formerly Google Ventures, and one of my must-reads says about consumer products today. And I think the folly of starting them, and I would love to get you to respond to that. So MG says, it really just boils down to time.

1:12We all have the apps and services we use on a daily basis. Once one is lodged in that cycle, it's extremely hard to dislodge both because of habits and for social apps, network effects. And whereas 10 to 15 years ago, everyone was gung-ho to try new apps to see what might stick, we're all now stuck with what we have. What do you think about that? Well, I do think MG is right about one thing, which is that consumer apps tend to be stickier than people realize. Yes, there's low switching costs. You can try new things. But people do have their routines, they have their habits, and they do tend to stick with them.

1:47That said, I do think people are really dismissive of the consumer space. People feel like everything's been done. We already have our stuff, as MG says. And I feel like when I've watched the pattern of consumer technology over time, people tend to say that, and then something new comes along. And they say, well, everything was done except for that. And then, you know, then they say, now everything's been done. And then it continues for a while like that. And then, and something new comes along and say, well, well, well, that hadn't been done before. You're right. And that's actually really useful.

2:18And so I think that there is actually more opportunity in the consumer space than people realize. That's one of the reasons why we're very focused on it at Sunshine. And I think that at the core of consumer, what you really need to do is focus on the user needs. What is, what user problem are you trying to solve. And you do need to aim at problems that are pervasive, that affect a lot of users every day, where you feel you can add a lot of value. I think that's really the key. And so a lot of times, these are spaces that might be very crowded. You might have to do some disruption. And they're bigger bets, bigger bets and smaller bets, because it's bigger in terms of the overall target audience and the amount of time and attention you're trying to capture smaller and that sometimes because they're pervasive, there's just a little bit of an amount of time every single day from the user and they're a smaller touch point.

3:13But I think that that's really the key is to not discount the consumer space as done, because I think there's a lot of things that have yet to be invented that are incredibly useful, and instead to focus on those user problems and those user pain points you're trying to solve for and make sure that it's something that's really relatable to a lot of people. Yeah, I'm with you. And I personally would love to see more innovation in the consumer space. These apps are just fun to use. And anyone who says that we're at like, you know, the maturation point for what consumer apps should be is totally wrong because there is so much more to do.

3:45And we're going to talk about your specific apps in a moment. But the interesting thing is, you know, you talk about smaller bets, right? Just a little bit of time. And actually, MG's post was about Be Real, which like was this great antidote to the sort of polished photo sharing that we do and takes like what, like 30 seconds a day to use. And he talked about how that was this big hit and then went away. And he continues his post and talks about like, you know, yes, you can do it like and gives TikTok as an example. And here's what he says. He goes, but TikTok, yes, you too can build TikTok. All it takes is algorithms trained over time on millions of users in China, acquiring another company which was already operating in the U.S.

4:27market and then spending billions of dollars to market it, a meta properties to siphon off users to your network. And even then, it won't work unless your product is actually great. Those millions of users will just churn. So do you think that he's overhyping the challenge? I mean, I don't think that he's right in saying that this stuff is baked, but the challenge is great, right? Because if you think about the consumer apps that have broken through, let's say since I don't know, Instagram, is TikTok the only big one? What's your thought on this? I think that there are in theory that, you know, there are more apps that have broken out in my mind.

5:03I do think that he's right. There's a big barrier to entry in some of these cases, especially when you talk about video, because video is, you know, it's expensive to move around is expensive in terms of user time, in terms of how people consume it. It's serial, as opposed to parallel. So, you know, the way you have to engineer the stream and things like that, just to make sure that you really hold attention is more intense. So I think he's got some good points in terms of TikTok and video in particular. That said, I think that, again, if you look at that core of what people are doing in consumer, what are you helping them do?

5:41And if you're helping them do something that they need to do anyway, and you're helping them do it better and with new innovation, I think that that is really greenfield because I think people are always looking for ways to be more efficient. They like trying things new, right? We are creatures that love novelty. And so I think that those types of things have a real chance of breaking through. And if there's something that helps you handle your everyday tasks and something that we really like to focus on here at Sunshine, I think the odds that it becomes part of your routine and and a critical part of your routine is there.

6:18So, and that's where you've decided to focus. Contacts, birthdays, event planning, photo sharing. I'm a new user of your apps. I just downloaded Shine and Sunshine Contacts. Shine is for the photo sharing and it's auto-generating albums for me already, just like shortly after downloading, which is pretty cool. Now I noticed that Sunshine's been around for a while, like about six years. And I think, was it Lumi Labs beforehand or I'd love to hear your, you obviously went through a journey, you know, between founding the company and deciding this is where you wanted to focus. So can you talk a little bit about that?

6:53Sure. Well, when we first started the company, we knew the broad space we were interested in. We loved consumer applications and we wanted things that were useful every day, but that's a really broad space. So we did a lot of experimentation to really think through where did we want to start? Where could we add value? And we were really interested in people's relationships. How are groups formed? You know, the soccer team, the class at your child's school, you know, your friends from college. How are groups formed? What makes them cohesive? How do they get together? How do you have those shared experiences?

7:30So we got very interested in groups and events, but we realized to do groups and events well, we really needed to help people stay in touch. So we started with contacts because for us, those were foundational. We learned a lot about contacts. Sunshine Contacts today is the highest rated app in the app store for contact management. And we think it's the best, obviously, but it does a great job taking your contacts, deduplicating them, updating them, enriching them. So we find your contacts in the white pages, we find them on Facebook, we find them on LinkedIn, and we also connect them with your email, which is really key because we can get a lot of information out of signatures and out of emails that can really make your address book that much more useful.

8:14So we're really proud of Sunshine Contacts. But as I said, for us, that was a foundational portion of what we wanted to build in that overall pursuit of that everyday utility around groups and events. And so what we launched last week, Shine, is our photo sharing for groups app. It takes basically a time and a place and lets people join an album and share in full resolution their photos. And it's AI powered in that it understands and tries to present photos that are share worthy for automatic upload. and it also does things like reduces duplicates, the same thing we were doing in contacts, we're doing in photos.

8:58And it makes it easier to share photos across people who might not have each other's contacts. It might be a friend of a friend at an event that you're at. And that brings me to events. At the same time that we launched Shine, the app, we also launched Shine on the web, which helps you with event organization. And so there you can set up your event. We have fast, fluid communication around RSVPs. And we also have breathtakingly gorgeous invitations made by generative AI. And so overall, we think that these two work really well together. You can use them separately, of course, but they basically overall help you capture special moments when you're together with friends.

9:36Right. And so I'm putting all these different areas that you're working in together and I'm looking at, okay, so it's photos, contacts, events. To me, it seems like it's almost breaking down what Facebook used to do well and trying to build it back in a different, maybe more of a utility versus a social network. What do you think about that thought? You know, as I said, for us, we're very focused on what we think people need every day, what we think will delight them, what we think will make their relationship stronger. And I do think that there were things and are things that Facebook does really well.

10:14For us, we're not so much following that template as opposed to just looking at people's everyday tasks and overall what's getting in the way. And I think we can all agree today, photo sharing is really broken. The number of times you might say, oh, let me take that on my phone too. Or, you know, don't forget to send me that photo when you're parting, you know, at the end of time together. You know, those types of things. And the odds that you get the photo is probably pretty low. Maybe for some people it's higher, but I think that it's overall pretty low. And so we wanted to say, look, if a photo really belongs to the time and a place and the people who are there, it should be easy, especially among friends and people who are connected, even through other people, to seamlessly share those photos.

10:58And at the end, you know, right now, AI is working on things like global facial recognition. or for a lot of us, we spend a lot of our time pinching and zooming and trying to make sure that we have the, the, the, the shot that has the right expression, the eyes open, all of those types of things. And those are all things that Shine can do easily and well. Right. And, you know, I won't press the issue too much, but it does seem like, you know, the one thing that really set me off on this path was seeing birthdays there. It's like, well, photo sharing, it actually used to be that you would share that in your newsfeed birthdays, you would see it on the right rail.

11:31Like there really is this opportunity for an unbundling of some of the bigger, you know, social utilities that we've had for a while. And that's kind of where, where this might come in. And then it sort of leads to my next question to you, which is that this is, there's, there's a huge AI portion to what you're trying to do. I think you talked about it a little bit, whether it's like finding the right photo, you know, figuring out who to share, deduplicating, like these are all something you need, something that's artificially intelligent to do, I imagine. And it's interesting because if you're starting these new consumer apps, the other question is, is big tech just going to do what you do?

12:08And so I'd love to talk to you a little bit about that. The first big question, you know, having set that up to you is, do you think this AI moment is going to make big tech even stronger than it is? Or do you think it will give startups like yours a chance to like really fill in some of the gaps that they haven't tended to for a while now that they've gotten bigger and slower? I think that overall, it's a great opportunity, a great moment for startups. I think that, yes, big tech is providing an amazing platform. The AA models and the LLMs that we have today enable us to do things that we could only dream of just a few years ago.

12:49But I think that in terms of the fact that we can access APIs for these things, we can apply them to specific domains and specific problems. I think it really allows a startup to build that much more quickly, build that much more intelligently. And the type of focus that comes with being in a smaller company and much more strategically focused on something is a great opportunity for startups. So yes, I do think this is a moment when big tech will thrive for obvious reasons related to AI. But I also think it's a great moment to be in the startup world, building something that's really relentlessly focused on a specific domain.

13:34And I think this gets to a really good point, which is that a lot of people say, don't even bother trying to compete in AI because it takes so much compute and the models are so expensive to train. But there are applications, it seems like you're saying, that you can build on top of these very expensive models and actually do things that are unique and differentiated without having to spend, let's say,$100 million on trading your own LLM or text recognition model. Yes, I think that foundational AI has a huge barrier to entry, but I think applied AI, taking these models and applying them in a specific space in a specific way is a really terrific opportunity right now.

14:14And I also think that the fact that there's lots of different types of AI being developed by big tech is helpful. And what's nice is I personally don't necessarily think that the winner in LLMs will necessarily be the winner in visual creation. And so as a startup, the fact that you can pick whichever model or whichever offering an API you feel fits your needs best is great. where in some cases the big tech companies are going to end up using just their own models and not necessarily being able to use what they see as best of industry, I think overall could be limiting for them. And so I like the fact that we're able to shop different models and ultimately find the one that fits our needs best.

14:58Right. And so you've been within Google. There's this like perspective out there that like a second, the second, like some startup does something right, Google or Facebook or, you know, you name it, we'll copy it. So like Google obviously does photo sharing with Google Photos, contact management. I mean, like as you open up Sunshine Contacts, you're like the first two things that you're plugging into are Gmail and Google Contacts. Is there something that having been inside the company that gives you confidence that they just aren't able to or won't end up taking the features that you've built and then baking them into their own apps?

15:32I mean, I think there's always a concern that you could have someone who fast follows or copies something that you're successful in. But I think that the type of focus that a startup can bring is really valuable. Being really relentlessly focused on that. That's how, of course, Google got it start being really relentlessly focused on search. Even Gmail that launched 20 years ago this week, like ultimately was really, it was a search based lens on email, which it turns out is really useful. And people hadn't thought of email that way in the past. But taking that lens where you have a lot of deep learnings and insights about your users and applying that to a problem, I think ultimately is how you stay ahead, even if you have a much larger company competing with you.

16:20Looking at this type of startup, if someone didn't know the context here, they would be like, oh, this is like a pretty like pretty easy to see the path that this startup takes off and then it gets acquired within Google. Is this, are you going to stay the course alone? Or if, you know, let's say Sundar calls up and says, we want to acquire this and come in and run some of our consumer products. Is that something you're open to? Oh, you know, for me, this adventure, obviously, what I mostly focus on is impact. I want to have a large group of users, a large user base, that's using the products and finding value in it every day.

16:57I think if we're successful in that, there's all kinds of opportunities. But for me, what really intrigued me and brought me to being an entrepreneur was the act of building a company. Not necessarily building a feature or building a team. I really love the design problem of working on a company as a whole, right? Having a product, a business model, a team, a culture that all works together to build something that can provide a lot of value and stay on the test of time. So our hope would be to be able to continue independently. I've learned in business, you should never say never. But our goal is to really build and design something that has that type of strength.

17:37Okay. So let's talk a little bit about some of these models that you may or may not be building on top of, beginning with open AI. What's your view of the state of open AI right now? Obviously, there's been some turbulence, but it seems like that's potentially behind it. But the technology thing really becomes interesting now because you have this GPT-4 model that's out there. They might be on their way to releasing GPT-5 sometime this year, but the competition is really good. So what would you say is the state of the company right now? I think that OpenAI, at least in my view at the moment, has the lead both in text generation, chat GPT, as well as with Dolly.

18:19But obviously, it's a fiercely competitive space. And I think that those things can be won and lost quickly. And there's a lot of really able competitors. Obviously, I've been close to Google and have a real fondness for it. But I think in terms of the stable of talent they have, as well as the type of data they have to run on, I think that, you know, you can't count them out. Yeah. And so I've heard you talk a little bit about which model will win. And you did draw a parallel between what's going on with AI bots now or AI models in search. and I was like kind of surprised to hear you talk about search.

18:56You talked about how search was effectively commoditized, but every now and again, there would be one answer that Google might give that was better than the others and that helped build Google's like long-term trust. And right now we're in this moment where these models, these AI models are on their way to commoditization. So I'm curious like what you think will enable these models to differentiate themselves. Is it that better answer every 30 tries or something or is it something else? I think that brings me back to the first question you asked in the podcast around the stickiness of consumer apps.

19:29I think that one of the things we learned as we built Google and it grew is that, yes, there was kind of a head of queries, the queries that people do all the time, and it didn't matter what search engine you used for those. They were all pretty much the same. It's the long tail of queries, deep research queries, queries that people had never done before, where Google's flexibility and depth and comprehensiveness and speed really set us apart. We get much better answers there. That said, when we saw it, the difference between us and even the second best search engine was sometimes pretty narrow, 3%, 5%, as you said, at which point in time you're saying, well, look, you're really only getting a better answer with Google once out of every 20 tries or one out of every 30 tries.

20:16And two things we saw. One, once you become part of someone's routine, the odds they keep turning to you as their search engine is really high. So as I said, consumer apps are stickier than people realize. The other is that people are so grateful when they get a novel, insightful answer or result that it builds a huge amount of allegiance. The fact that you can just really nail someone's query, you know, one in 30 times, one in 20 times. that stands out in their mind. Google brought them something that no one else was able to bring them. And the type of allegiance and loyalty that builds among consumers and users is really quite profound and I think in many ways underestimated.

20:58And I think we're going to see the same thing happen in some of these chat interfaces. If you start to realize, wait, I just like the types of answers. I get better here. I get better insights. I get answers that speak to me more, that express themselves more in language that I can use if I'm asking the model to write something for me, things like that. I think that those can be quite profound. I noticed that even in Gmail, we'll do the auto-compose. And I was talking with a friend of mine, and we were talking about the fact that we would never write yeah in an email, yeah, comma, as an answer, but it frequently composes that.

21:38And you're like, look, it's little things like that where if over time, the time savings and just knowing you well enough to know that you would always write yes comma as opposed to yeah comma those types of little things make a big difference in terms of how at home you feel with the technology how much you feel like you can rely on the technology the type of time savings it gives you how well it understands you and so sometimes it's those little things around the edges the 3 of queries where you're much better the little things that you say well look i might speak that way but i would never write that way um having technology that really understands that and brings that to bear ultimately can make the difference, especially in a very competitive space like this.

22:17Yeah. And those Gmail auto replies or auto completes, they're unfailingly polite. I feel like they've taught me to become a more polite emailer, which I appreciate. And maybe it's pouring fruit because here we are talking after a cold email. So thank you, Gmail, on that front. Another thing that you brought up, which is a way that these bots can differentiate themselves, is personality. And it does seem like all these bots right now have the same personality. It's, I don't know, it's kind of boring. They're all pretty boring. They're very helpful, but they're, they're not like someone you're like someone I'm already anthropomorphizing these things, but you know, they're, they're not someone you're excited to talk to.

22:59You're like, oh, okay, let's see if this is useful. Like the one that's taken a shot at doing a personality is Grok from Elon Musk and it's pretty cringe. So talk a little bit about that. I'm curious to hear your thoughts on like, is the laggard here just going to open up and try to make a more personable bot or kind of like a psychobot that doesn't have any guardrails? Like I'm personally, I, maybe I'm alone, but I'd love to have one that like, we'll just talk about anything with you and use this intelligence that it has baked in to like really do some of the wacky stuff it did. For instance, when Kevin Ruse was talking with Sidney and the Sidney bot tried to break up his marriage.

23:39It's interesting. In the early days of Google, I talked to a Hollywood producer who was doing some side collaboration with Google. And he felt really strongly that search engines were going to have to develop a personality. That people were going to say, oh, I'm choosing between Google or Yahoo or Microsoft. And that there was going to have to be flavors the same way there is on like CBS, ABC, NBC, right? In terms of like what shows they would carry. And, you know, there's something about what he said that made sense to me, but in my view, it didn't play out that way at all. And I think it's because, you know, for you when you're, you know, a search engine is fundamentally almost like a teacher, right?

24:23It's bringing you information. You need to trust it. It needs to have a personality that has integrity, that's trustworthy. but a lot of times you don't necessarily want it to be super personality rich. You really want it to be efficient and pretty much to the point. And I think that there, the fact that it was somewhat, you know, Google in his presentation did sort of fade into the background, right? It might be something that you guys know, more bland than a Hollywood producer might have actually envisioned was actually helpful. And I also think that it put the focus on the quality of the answers we you're providing.

24:58I think there's a couple of things that are going to happen in the AI space, if I had to guess. I think that we will see that when you're doing work and really conversing one on one with the AI, I think you're ultimately going to want to have low personality, not necessarily objectionable personality. You want to feel understood, but you don't want that necessarily to get in the way and be distracting because overall, it makes you less efficient. I think if you're asking AI to write on your behalf, it's going to become very important that it understands how you like to express yourself. If it does, it will result in fewer edits and a better first draft of a product, things like that.

25:45And so I think that you'll see a few different places in terms of how the AI is deployed by different people. And it may be that they're one and the same, that the chatbot you're conversing with to teach yourself is the same as the chatbot you're using to write as it is today. And there's one that kind of has the right type of interface and the right way of expressing yourself that's very comfortable in both regards. But my guess is it's that latter task where you're asking the AI to act more like an agent on your behalf, really representing you. I think it's going to be really important for people that in that world that they have a they are able to have a presence that isn't cringe that feels very comfortable to them and so I think there the personality piece will be more important and I definitely want to talk about agents as well as Google you were the person that hired Sundar Pichai so why don't we do that right after the break did you know your credit card points and miles can lose value to inflation credit card companies often reduce the redemption value of your points and miles.