GM Readers! ☀️

Welcome to the 3rd issue of Evolving Internet Insights: Brainfood — a weekly deep dive into a relevant emerging tech topic.

Last week, we were both guests on the Money Never Sleeps Podcast hosted by Pete Townsend, who is a managing director of the Web3 Techstars Accelerator. We highly recommend not just a listen to our conversation with Pete, but also the other great episodes on his podcast.

One of the great conversations we had with Pete was when he asked us how we define the “Evolving Internet.”

This week we unpack a v1 of our Evolving Internet Thesis. ⚡️

Thanks for reading!

Liang and Dan 🙌

🧠 Brain Food

One focus topic to feed your brain.

When we think about the Evolving Internet, we think about how the Internet has become the “town square” for innovation and users globally – a place where with each passing day more of the world’s net new value is created and consumed. 

While the Internet has been changing ever since its inception, the Internet of today is going through an accelerated pace of change marked by multiple fundamental shifts across different key user segments that make up the Internet.

The Evolving Internet is made up of three emerging areas.

Emerging Tech 🤖🦾

There are multiple technology disruptions taking place that will change the trajectory of the Internet. We’ve covered many of these technologies, but the two big ones we have covered so far are AI and Web3.

AI drastically reduces and lowers the cost of production. For example, in art and graphics, generative AI tools allow anyone to create high fidelity outputs with just a few keystrokes. Traditionally, humans had to create the art by hand which incurred a bunch of production-side costs (hiring artists, etc). And it’s not just art, generative AI is disrupting content production of every type. Most (if not all) knowledge work and creative work can be distilled down to content of some form (writing, marketing campaigns, graphics, software code, screenplays, etc). AI enables a world with infinite creation at close to zero marginal costs, i.e. at a fraction of the time and cost.

Web3 enables digital ownership at the individual level. Traditionally, content anyone creates on the Internet is governed by the platform that they post that content on. With Web3, users can own their content, works, and digital assets, meaning the implications of that ownership are more far reaching. A simple example of this principle is that a user can prove on the blockchain that they created something first. It is a simple idea that we might take for granted in our day to day, but in a world of AI remixes, deep fakes, and copies and pastes, knowing and being able to prove who created what and when become important to protect the IP of creators and companies, and more broadly, the sanctity of original content.

AI and Web3 are just two of the emerging technologies. There are many others. For example, self-driving cars will disrupt our concept of mobility. Virtual reality/augmented reality (VR/AR) will disrupt our concept of work, entertainment, and our general perception of the world around us – a concept Apple calls “spatial computing” with Apple Vision Pro as its “big bet” in this space.

Unlike the Internet era and the Mobile era where there was one predominant technology shift, in this era, there are multiple technology shifts. And those shifts don’t happen in a vacuum either, each technology will impact and influence each other.

Emerging Users and Behaviors 👩🏿‍💻🧑‍💻 

As each part of the world onboards onto the Internet, user preferences and behaviors are evolving on a global scale. Since products are built for users, catering to evolving user preferences and behaviors is critically important.

Consider that the largest English speaking population on the Internet will be the Indian population. This means that userbase’s culture and norms will dictate how products with global reach are designed.

More broadly, internet penetration is steadily going “up and to the right” 📈 across most countries and regions. This is a stark difference to the early days of the Internet when the user base was more homogenous.

Beyond cultures, there are generational shifts as well. A younger user has different standards and expectations than an older user. An older user might split their time between the analog and digital world, but a younger user will grow up as a digital native where most of their lives are spent on the internet.

These are just a couple of ways to segment the Internet population. Given the billions of Internet users, there are an endless amount of ways to segment, which means there is an endless number of preferences on how each segment wants to access and engage with the Internet.

The opportunities to build for these users and behaviors is limitless.

Emerging Economies 🌐🏦

As more emerging economies engage with the Internet and adopt emerging technologies, they will become a powerful force that shapes the trajectory of the Internet. Emerging economies have a different starting point usually characterized by lack of access to the previous technology paradigm (a common one in developing countries is being able to access the internet through desktop vs. mobile). However, these regions have the potential to leapfrog their “developed” counterparts when it comes to adopting new technologies because innovators are more willing to disrupt the status quo that hasn’t quite worked for them. As emerging economies mature, their large and growing populations represent massive userbases for companies and startups to build products and services for.

We see the rise of emerging economies across the world, particularly with populations that are learning into emerging tech. For example, in LatAm, there is a greater level of enthusiasm for AI.

While today, factors including economic conditions, government policies, and social norms, may have historically stymied internet penetration in emerging economies, it is these same characteristics that catalyze the boundless opportunities to build technologies for these emerging markets.

So What ⚡️🚀

Regardless of what type of business, entrepreneur, or creator you are, the “Evolving Internet” paradigm shift will impact how you create and capture value.

Pete Townsend thoughtfully asked us on his podcast, “what happens when emerging tech meets emerging user behaviors?” and “what happens when emerging economies meet emerging tech?”

We expect all the forces shaping the Evolving Internet to converge, ushering in new products, technologies, ways of life, and paradigms. Trends will surface that redefine and further evolve the Internet. To say this is a massive shift is understating it.

After all, the Internet is a global phenomenon.

🌐🤝🤖

Note on Building and Thinking in Public: This is a v1 of our Evolving Internet thesis. We will continue to update our thinking through this newsletter.

🗳 We’d Love your Feedback

🙏 Shameless Asks

It takes us days to put this together, sharing it takes you 19.45 seconds 😘

An easy way to support us and the newsletter is through the referral program.

⚡️ Share Evolving Internet Insights with a friend and ask them to subscribe

⚡️ Share on Twitter and Linkedin with a short note

⚡️ Share on your company Slack/Teams channels and communities

DISCLAIMER: This post is provided strictly for educational and informational purposes only. Nothing written in this post should be taken as financial advice or advice of any kind. The content of this post are the opinions of the authors and not representative of other parties. Empower yourself, DYOR (do your own research).