Paul Ford: Hi, I’m Paul Ford.

Rich Ziade: And I am Rich Ziade.

Paul: And this is The Aboard Podcast. It’s a podcast about how AI is changing the world of software, and the world in general.

Rich: How are you, Paul?

Paul: I’m good. Today we have something very special. Let’s play the theme song and I’ll tell you what we’re gonna do. But we are about to learn something about the most prevalent life form on earth.

Rich: Whoa….

[intro music]

Paul: There is a creature that stalks our entire country. They’re in every shopping mall. They are a topic of endless discussion. We fear them, we love them, and we want to please them.

Rich: What is it?

Paul: The American consumer.

Rich: Oh boy.

Paul: I know.

Rich: They are here.

Paul: And I’ll tell you what, I’ve never been able to understand them. Not one bit.

Rich: Yeah. Are you one of them?

Paul: Of course I am. Everybody is. Everybody thinks they’re not.

Rich: Right.

Paul: Yeah.

Rich: I’m a reader. Yeah.

Paul: I don’t care—

Rich: I have a tote bag.

Paul: Hippies, too. Like, “I don’t care about brands, I just like Birkenstocks.” And you’re just like—

Rich: Yeah, there we are.

Paul: There it is—okay, but that’s, we’re not here to talk about the American consumer. We have a world-class expert, Dan Frommer, who is the publisher of The New Consumer and the writer and the everything. So welcome.

Dan Frommer: Thank you.

Paul: To tell us a little bit, help us understand: You were a journalist?

Dan: Still am sometimes, but yes.

Paul: You mostly wrote articles and now you have your own platform?

Dan: I mostly wrote articles. I spent 15 years as a technology financial journalist writing about the business of tech. Mostly Apple, mostly the smartphone industry, the app economy, all that stuff from, like, 2005 through 2015 and then—

Paul: For lots of big pubs. Quartz and sort of…

Dan: I helped start Business Insider when we were Alley Insider almost 20 years ago, and—

Paul: You were very much a New York City guy. Now you’re in LA.

Dan: I was here for 15 years, then I moved to LA five years ago. And right before moving to LA, I started a new business which I called The New Consumer. I’d been covering tech for so long, but my personal interest is a lot of more consumer-oriented things. Food and beverage, the hospitality industry and you know, CPG—back then we had this boom of direct to consumer brands here in New York. And there’s a lot of people writing—

Paul: Tell the people what CPG is.

Dan: Consumer-packaged goods. So you know everything from paper towels to squeezy olive oil.

Paul: You got Apple, you got the iPhone, their keynotes and you’re like, “God, I just need to do olive oil. I gotta get in there.”

Dan: Gotta do it. Yeah.

Paul: I need to know about squeezy—

Dan: Luggage and direct-to-consumer glasses. No, what was interesting was that, especially here in New York, there were a lot of these companies that were launching seemingly mundane consumer products like glasses and roll-y suitcases and all that kind of stuff.

Rich: Mattresses.

Dan: Mattresses, but operating in a completely different way than their predecessors. They were digitally native marketers. They were actually good at customer service. They had a product value proposition that turned out to be a little too good to be true. Like, the prices were maybe a little too low and the margins were a little too thin. And then the ads got expensive and then they realized, “Oh, we got to rethink all of this.”

But anyway, it was a fascinating time, this collision of consumer and tech through e-commerce, you know, the boom of—this was back when, you know, Amazon didn’t have fulfillment centers in most states because they didn’t want you to have to pay sales tax.

Paul: Right.

Dan: Now you can get an Amazon package in three hours. And that is just a profound shift in how people buy things and spend money. And I saw a lot of people writing about these companies, but not in the way I wanted to. No one was doing actually any analysis of the business models. No one was using math. They were all just talking about how creative and disruptive these companies were. But were they actually? So…

Paul: Okay, so you’re reading lots of profiles of young, exciting founders and going, “Where’s the spreadsheet to back this up?”

Dan: Right, yeah.

Paul: So off you go and you make a kind of a Substack kind of dealio, right? Like, you’re like, I’m going to start this newsletter—

Dan: We don’t use that word. But yes, a professional newsletter membership. [laughter] Yes.

Paul: So a platform.

Dan: Yes. I pick my own fonts, man. You can’t do that on Substack. [laughter]

Paul: Absolutely, absolutely. So wait, it’s not—okay. So you’re on your own platform.

Dan: I’ve always been on my own.

Paul: Actually, that’s important. We just had someone on who is sort of, like, negotiating their Substack world. So you built your, you sort of did your own thing.

Dan: I built my, you know, I used my 2006 WordPress template code and made it—

Rich: Nice.

Dan: Look appropriate. Yeah, it’s called The New Consumer. Newconsumer.com. Actually just started mirroring on Substack earlier this year to see if it juices subscriber growth. And, because they do a lot of…we don’t need to talk too much about Substack, but they do a lot of, but, you know, the listeners might appreciate this take.

Paul: Yeah.

Dan: They do a lot of UX stuff that I would never ever do on my site. Like, kind of dark, dark stuff. Like make it look like you need to subscribe in order to read an article, but you don’t actually.

Rich: Yeah.

Dan: You just have to find the light gray squint.

Paul: Yeah.

Dan: Which I would never do on the site that I own and operate. But you know what, people are used to it on Substack. So I figured, let’s test mirroring on Substack and treating it more like Twitter. And that has worked.

Paul: Okay.

Dan: So I will continue to do that. [laughter]

Paul: Oh boy, here we go.

Rich: That’s okay.

Paul: That’s the way we learn. Okay, so I go to newconsumer.com?

Dan: Yes.

Paul: I have a newsletter. I have some data. I have some information. Just sort of describe a little bit about the mission. And then I want you to do something wacky. I want you to define what a consumer is.

Dan: Okay. Yeah. I saw this really fascinating collision between technology and consumer products and consumer behavior happening in the 2010s, say, when e-commerce really started taking off.

Paul: Give me an example. There was that woman who sold the roll-y luggage. That kind of stuff, or what’s the…?

Rich: Away.

Paul: Away!

Dan: That was one example, like, the direct-to-consumer brand boom.

Paul: BarkBox.

Dan: That was happening. All of those things.

Paul: Subscription services.

Dan: Yeah, but that’s when Instagram Stories existed. And then you could buy ads that, you know, and that was kind of TV for the next generation.

Paul: I went to BarkBox’s offices.

Dan: Yeah, I think we all did. Right? That was… [laughing]

Paul: They have a large dog run in the office.

Dan: Amazing.

Paul: Yeah, I just, that threw me. That’s what happens.

Dan: Yeah.

Paul: We don’t have that here, but I would love one.

Dan: What’s the AI equivalent, though, of a large dog run? That’s what we need.

Paul: Oh no, I just think the equivalent is, like, “We have so much money.” When you’re an AI company.

Rich: A massage chair.

Dan: It might be this library here.

Paul: Yeah, OpenAI probably does have a dog run.

Dan: They might. These companies were doing marketing as digital natives. They were speaking a different language online.

Rich: Yeah.

Dan: They were reaching people in a way that felt just a lot different than old-school brands. And so I wanted to kind of really go deep on that. And so I started The New Consumer. Initially it was mostly a website and newsletter. The business has evolved. I’m still a one-person media company, which is fun and stupid. [laughing] I should probably outsource more of the work that I do or at least bring in some partners to tweet for me because, you know, every time I tweet, I make money and I just don’t tweet. So…

Paul: No, this is, this is real. You can’t maintain a whole platform all by yourself.

Dan: It’s true, I’m learning that. But kind of the biggest thing I do now early on, so I started The New Consumer in 2019 and then a year in was COVID. And then I had met this venture fund in New York here called Coefficient Capital. And they invest in next-generation consumer products. They’re, you know, investors in like Magic Spoon Cereal, high-protein cereal, or, you know, energy drinks and that sort of thing and—

Paul: Right. Because there’s that whole corner of VC where they’re like, “Fake meat! Oh my God!” Yeah, okay.

Dan: Well, so they actually, they spent a lot of time looking at fake meat and did not do a deal there. And that was smart.

Paul: Sure. We’ve all spent a lot of time—

Rich: Fake meat has crashed.

Dan: Oh yeah, totally.

Paul: Yeah. Yeah.

Rich: I wonder why.

Dan: It’s not good.

Rich: Oh! Good reason.

Dan: Yeah. You know, in the tech and business world, there was a very famous Wall Street analyst named Mary Meeker.

Paul: Sure.

Dan: And she used to put out these incredible reports every year.

Rich: Yeah.

Dan: 400 slides about the state of the internet, basically.

Paul: And that was really the brand for her, right?

Dan: Absolutely.

Rich: It was like an annual thing.

Paul: She was like somewhere big.

Dan: Well, first she was at Morgan Stanley and then she was at Kleiner Perkins. And my last kind of corporate job, I was the editor in chief of a tech news site called Recode. And at our conference, the code conference, she would roll out this report every year. And it was my job to blog it as quickly as humanly possible to get it on our site.

Rich: Mmm hmm, mmm hmm.

Paul: Well, for people who don’t know, basically what she would do is aggregate data about the industry and just kind of make good, forward-looking predictions. But she had a really good track record of kind of capturing waves and sort of saying, like, “I think we were here and we’re going here.” And she was pretty nerdy. Like, she was just kind of a nerdy person who was really into the data. And so she just had a lot of, just a lot of juice in the industry because when she spoke, people listened.

Dan: There were two things she did that were magic. One was she, and this is what I try to do with my work, is she took a very complex topic and made it extremely simple to understand through a slide, usually a chart, that tells a great story with just a wiggly line. And people don’t appreciate how much you can learn from just a wiggly line that’s moving in one direction, two directions.

Paul: Sure.

Dan: In a circle, whatever it is. And the other thing she did is she would present 400 slides in, like, 30 minutes. She was so fast.

Paul: Yeah.

Dan: And it was awesome to watch live. And so…

Paul: So you get this—

Dan: That really inspired me.

Paul: This half hour gets in your brain and you’re like, “Okay, I know what I’m doing next year.”

Dan: Yeah. And because it was such a long report, it was almost like a stunt how big it was.

Paul: Mmm hmm.

Dan: People would kind of drop everything and read it immediately. And so I was very inspired by that. She actually stopped doing them the year we started doing them. So anyway, I was chatting with the VCs at Coefficient and they said, “You know, we really would love a partner to help us make like the Mary Meeker report for consumers.” And I said, “Oh, man. Like, that’s what I want to do, is make the Mary Meeker report for consumers.” So we started that in the, in 2020. It has—Mary Meeker’s was called Internet Trends. Ours is called Consumer Trends.

Paul: Whoa. Whoa! [laughter]

Dan: Very original. Wow. Very creative.

Rich: Had that branding offsite.

Paul: No, that marketing agency gave them about $80 grand. They came back with that.

Dan: Yeah. Add a zero. [laughter] Yeah. Oh, man.

Paul: All right, good.

Dan: So anyway, so we started doing that in 2020. We’ve done 15 of them now.

Paul: Those are on your website. I can go look—

Dan: Newconsumer.com/trends. They’re all free to read.

Rich: So it’s not an annual thing.

Dan: No. Well, so we do a big one every year, which we just launched. So if you go there now, you’ll see our 2026 report.

Paul: Awesome.

Dan: And then we do kind of a mid-year big report, too, which is kind of half—okay, how’s everything going that we kind of looked at?

Rich: Gut check.

Dan: And then we dive deep on a lot of topics that are kind of in this collision of tech and consumer. So TikTok Shop is something, for example, that came out of nowhere two years ago and is now supposedly going to do $15 billion in sales this year in the U.S. alone.

Rich: Whoa!

Paul: That’s where I buy everything. TikTok Shop.

Dan: A lot of people buy a lot of cheap…

Rich: Stuff.

Dan: Trash. [laughter]

Rich: Plastic spatulas.

Dan: Yeah, it is wild. Or topics like Amazon, which is fascinating because, you know, there’s this narrative that, like, oh, people don’t like Amazon. People freaking love Amazon. People love Amazon.

Paul: People on BlueSky don’t like Amazon.

Dan: Exactly. Well, this is what we try to—this is what we try to poke at is, like, “What do the masses—”

Rich: “What’s really happening?”

Dan: Yeah. “What is really happening?” Because—

Paul: Okay, what is, what is a consumer, Dan? You gotta, stop with the what, tell me! Just what—what is it?

Dan: Look, it’s kind of a lame word, but it’s someone, it’s a person.

Paul: Okay. With a wallet.

Dan: Specifically, probably about things that they put in their body and that they spend money on. And those are what we focus on.

Paul: And we’re looking, how many of them are we…. How many of them are there?

Dan: The U.S., there’s, I think, about 3…I don’t know the exact number, but there’s between, I think, 330 and 350 or 60 million people in the U.S., and there’s about 120, 110 million households. So…

Paul: Okay.

Dan: Yeah, that’s about. I just made up those numbers, but that’s somewhere in there.

Rich: If you’ve got Apple Cash in your pocket and you’re 14, you’re a consumer.

Dan: Yeah.

Paul: Great.

Dan: Babies are also consumers, but not necessarily in their own… They do make some decisions about what they put in their body, but not all of them.

Paul: Let’s do this. Give us one fact, doesn’t have to be AI-related, from the report.

Dan: Yeah.

Paul: And then let’s talk about how you got to that fact.

Dan: There’s so much in the report. I would say one of the things that I try to understand are how people who grew up with the internet, digital natives, act differently than people who did not grow up with the internet.

Rich: Yeah.

Dan: Because it is such an extreme factor in the data we see and how people conduct business and how they think about technology and the future. So here’s a stat, like, part of my work, let me just describe kind of what I do a little bit. There’s kind of three main ways that we get data for our report. One is that we try to curate and triangulate as much publicly available data that exists. There’s, you know, the government puts out a ton of data. There’s companies that put out data, you know, through SEC filings or whatever, you know, IPO filings, all kinds of things. And we try to understand what’s going on through as many different sources as we can, because everyone has kind of a different view of the world, and no one’s as perfect. And so if you can get three or four pictures of the same thing, then you have a better understanding of what’s actually going on. The other is that we—

Paul: Well, just give me an example. Like, soybean yields? Like, what are we talking?

Dan: Well, no, like, just spending.

Paul: Okay.

Dan: Like, how much people spend. How much people spend online, how much people make, how much different types of people make money.

Paul: Some broad economic indicators.

Dan: Exactly.

Paul: Okay, so starting there.

Dan: But also how many people shop on Instacart every month or something like that. Like, every three months we get a stat from Instacart about online shopping, which, why do we care about online shopping? Because it’s a different user interface than the grocery store. So people are going to see different things that can be more personalized, more customized. As we recently learned, the prices can be personalized, which people get really mad about anytime there’s dynamic pricing, and it’s a different way to discover brands and products than you could in a physical store. So that’s why I care about how much online grocery shopping people are doing.

The last two things we do, we also partner with a lot of data companies. There are a lot of companies out there that sell data to companies and hedge funds and whatever. And, you know, they are very happy to, to see us as kind of a lead-generation partner.

Rich: Way to show off what they’ve got, yeah.

Dan: Totally. And then the third thing, and probably the most important thing, is we conduct an original survey every few months of 3,000 Americans. Online—we work with one of the most reputable survey companies, Toluna. I write the survey, they field it to what we hope is kind of a nationally representative sample. So that’s a lot of the data that I will be citing today is my own, because I get to write the questions and really kind of almost push people in weird ways to understand how they’re thinking about everything from vitamins and supplements to AI and the future. So—

Paul: Give me a question. How do you write a good question?

Dan: Okay, so here’s a question. We always ask, “Where do you feel most like yourself, online or offline?”

Paul: Okay.

Dan: And that is one where there is a vast generational difference between people who grew up with the internet and people who didn’t. More Gen Z and Millennials, which are people from Gen Z, I think goes all the way down to maybe 13, but we start our survey at 15. And then millennials go up to age, like, 44, something like that.

Paul: Yeah.

Dan: So more Gen Z and Millennials feel most like themselves online than offline. And then if you look at Gen X and above, it’s the exact opposite.

Paul: Okay.

Dan: Like, 90% of people over 75 don’t think of themselves as online.

Rich: Sure, sure.

Dan: But that dictates how they think about other things. Those younger generations are much more willing to, and we can get into details, but much more willing to trust technology, to trust AI tools with things like their medical information or data, or much more willing to test new services. They think about their health in different ways. They think about all sorts of things differently.

So it’s not always the case. Sometimes the youngest people think differently than the cohort before them, et cetera. But that’s a lot of the things we try to understand, especially as you know, and my partners are investors in brands that are targeting young consumers. If you can understand how the next wave of shoppers is going to operate and you’re building brands that you hope will have a 30-year lifespan, it’s better to pick those people who are going to be entering their prime in the next few years than people who are going to be retired and not shopping and that sort of thing.

Rich: We’re going to jam AI into this conversation the same way I sometimes jam a slice of ham into a cheese sandwich, or…

Paul: Wow, that is a metaphor.

Rich: A Nutella…sandwich?

Paul: I’m allergic to hazelnuts.

Dan: Really?

Rich: I’ll work on this metaphor.

Paul: Yeah. It’s a sad one. I miss a lot.

Rich: Oh, I got it. Peanut butter and bacon. Have you heard about this?

Paul: Yes.

Rich: All right. But we don’t—

Dan: The third-fastest-growing sandwich, this—no, I don’t know. [laughing]

Rich: Oh, geez. I was gonna say, here we are.

Dan: I should know that.

Paul: That was a 10-year-old classic on Pepperidge Farm raisin bread. Just looking into the distance now.

Rich: Before we nudge you into, obviously we’re interested in—AI is here and it’s everywhere.

Dan: Yeah.

Rich: So I’m sure it’s seeped into your analysis.

Dan: I have a whole bunch of stuff to tell you.

Rich: Give us a highlight that’s not AI that just is just, people should hear about this.

Dan: So something that was interesting, we’re spending a lot of time understanding things like longevity and how long people want to live and things like that.

Rich: Oof. This gets heavy.

Dan: Yeah. A third of Americans say that they are in health-optimization mode.

Rich: [deep sigh]

Dan: And when it comes to health, it’s become—and actually this is kind of interesting. So we ask, “Do you consider yourself someone who is actively trying to live longer?”

Paul: Okay.

Dan: And it’s about half of people.

Paul: Yeah.

Dan: But it’s, it’s higher among younger people, like six, almost two thirds of millennials say, “Yeah, I’m actively—” And also higher among rich—

Rich: Yeah, they’re trying to take care of themselves.

Dan: Yeah. And then most people see health as a status symbol, too. So that’s the thing too, where, you know, being fit and healthy is not just something that drives people to spend money on supplements and stuff, but it also is driving kind of status, too.

Paul: You know what’s interesting listening to you talk is that earlier you’re talking about where people are getting—where people are getting their information is as important to brands and to sort of consumer-focused businesses as much as the product itself. Right?

Dan: Sure.

Paul: Like, it’s not like, “I’ve made something really good. I want to tell you about it. And it’s, you know, it’s got these features. I’m going to create this sort of..” The where and the how is just as important. Right? And I don’t think people always think that way. They don’t think about the channels of information. The way I learned about this was Barnes & Noble endcaps. For people who don’t know, when you walk into a Barnes & Noble and there’s like, there’s the end of the row, there’s always those books that are sitting there. You can pay to get your book in those places. Right? Like, that’s just, those are endcaps.

Dan: Man, the things that you not only can pay for, but almost have to pay for in retail stores, if people truly understood how little of the store is actually, like, kind of an editorial decision? [laughter]

Paul: Yeah.

Dan: I think they would be bummed out.

Paul: I think that is real. Do you, so, I mean, but you’re kind of, you’re wading into those waters all the time, right? Like, that’s…

Dan: Totally, yeah.

Paul: Yeah. What would surprise you, like, if you—what would surprise people if they walked into a grocery store?

Dan: I mean, just, like, a lot of this stuff—actually, some of that stuff is there because the store has invested in the brand. [laughing]

Paul: Oh, really?

Rich: Sure.

Dan: Some of that. But yeah, all those brands pay to be there. It’s very hard to be a brand in a grocery store. Like, you have to do a lot of trade spend. Nowadays you have to buy ads on their website to be a good brand. Like, there’s a lot of—

Rich: It’s not like it’s an optional thing. You kind of have to.

Dan: You kind of have to.

Rich: Yeah.

Dan: It’s a game, like everything else.

Paul: And it’s for us, like, we’re kind of B2B people.

Dan: Yeah.

Paul: And we realized, we started to dabble and see if we could make a consumer product. And there was this moment where I realized, like, the way you make a consumer digital product is you raise a lot of money and then you give it immediately to Google and Facebook in the form of ads. [laughter] And literally like maybe 8 out of every $10 you might spend, $2 is for you to build your product and $8 is to market it. And the only ways to market it tend to be those, like, platforms like that. And it just feels so off. Right? Like, it’s just like, “Really, I just, I’m just gonna feed the same fire with all the…”

Dan: Yeah. Totally. The other thing that always surprised me is learning, like just you can build a very, very large business through the U.S. grocery industry, but it is so geographically distributed, because it has to be around the country, that on a per-store basis—like, we’re, you know, doing, doing tech stuff, you were like, “Oh, we’re supporting millions or billions of active users.” And it’s like some companies are very happy to sell two of their products per week in any store. Like, that is, and that’s the kind of thing where you’re, like—

Paul: Because there’s thousands and thousands of stores.

Dan: Yeah, right. So if you’re selling, you know, other categories, it’s, you need to sell 20 a day or, or hundreds a day. But many categories, like, 6 a week is really good.

Paul: How do you get your groceries?

Dan: How do I get my groceries? Well, I love grocery shopping, so I go to at least one different store.

Paul: See, that’s why, like, walking with you through a Kroger must be a trip.

Dan: Absolutely, yeah. In fact, people like, sign up to do that.

Paul: Really?

Dan: I should charge for that. I have friends that I only see when we do grocery walks.

Paul: You should do tours.

Dan: I should, yeah.

Paul: That’d be amazing.

Rich: We have to—he’s from LA. We have to ask about the $20 strawberry.

Dan: Oh, well, they have those here, too. Well, I don’t, but I also go to Japan a lot and there, the $20 strawberry is the cheap strawberry. [laughter]

Paul: You get that at the 7-11.

Dan: Yeah, right. Yeah. The $400 strawberry.

Rich: I’d love to wade into Japanese consumerism. It’s a fascinating thing to me. It’s like a whole other world. But I would love—give us your headlines. I mean, AI is here and it’s everywhere. I mean, we could, we could pretty much pick anyone out of any industry or any sector or any profession, and we could talk about the impact of AI. Like, it’s just everywhere. I don’t have a good handle on what it means in the consumer space or the consumer mind. So give us what you’re seeing. It’s so early.

Paul: But I also think tech, like, it’s understood as an accelerating technology that helps you deliver things more quickly. And it’s sort of getting baked into a lot of stuff that we build for pretty obvious reasons. Sometimes it’s bad, sometimes it’s good.

Dan: Yeah.

Paul: But we Have a very clear profile of where it fits in our world. Right? And I’m wondering what non-technology people are making sense of…

Dan: Yeah.

Paul: When they’re getting hit with, you know, Claude.

Dan: Let me, let me talk for a couple minutes and give you, like, kind of five nuggets here. How would that sound?

Paul: I love nuggets.

Dan: Okay, cool. So basically everybody knows about AI. Almost every, like, more than 90% of people have heard of AI, which is higher, you know, in a survey, there’s always people who click the wrong thing because they’re not paying super close attention. But that is higher than the people who are aware of Doritos, of TikTok, of Viagra, of Ozempic. Like, there is extremely high awareness of AI.

Paul: Man, they beat Doritos.

Dan: They beat Doritos.

Paul: Yeah.

Dan: Which is wild. People are using it. You know, specific tools, like ChatGPT is obviously the kind of biggest consumer AI tool right now.

Rich: Yeah.

Dan: Other than—part of the issue is, like, how do people define AI? Is Alexa AI? Am I allowed to say that on a podcast? Did I just turn on, like, 17,000 people’s ovens or something like that?

Paul: Yes, absolutely. But that’s the fun part, right?

Dan: So what is AI? That’s something that is a little tricky to define—

Paul: Hey, Siri!

Dan: [overlapping] But when you ask about specific— [laughter]

Paul: Yeah, go ahead.

Rich: Let’s just turn them all on.

Dan: Yes, exactly.

Paul: Cortana! That didn’t do anything. [laughter] Go ahead, go ahead.

Rich: Crickets.

Dan: When you look at it, especially by generation, like, almost two thirds of Gen Z and Millennials use ChatGPT in the last month in our survey, they tell us that.

Paul: Two thirds. Okay. So 66.6%.

Dan: Well, it’s, like, 60…so it’s a little less than that.

Paul: No, no—

Dan: 62% of Gen Z and Millennials say they used AI in the past month, and this was our survey in November. And that tracks with some of the data they’ve shared through some of the academic research they publish, where there’s just an astonishing number of people using AI on a weekly basis.

Paul: This has been, I mean, just mass adoption is here and you kind of have to deal with it.

Rich: It’s a brush fire of adoption. I mean, we’ve never seen anything like it.

Dan: It’s a real thing and I think people are genuinely using it. Like I, you know, I use it all the time, but I’m a nerd. And also I’m studying it.

Paul: But yeah, and you have a publishing—you have a lot of applications. Not that you’re using it to write your stuff, but a publishing platform person who does a lot of stats is going to find a lot of applications for these technologies.

Dan: Totally. Yeah.

Paul: Where do you think they’re using it?

Dan: I think so, well, what we know from the public research that Airb—that Airbnb, that ChatGPT—

Rich: That’s one of the strangest Freudian slips I’ve ever heard.

Dan: Yeah. Weird.

Paul: Yeah. Your inner life is really something. [laughter] “Oh, wow. Airbnb instead of ChatGPT.”

Dan: You know, those Brian Chesky thirst trap Instagram posts are really getting to me. [laughter]

Rich: Seeping into your brain.

Dan: Yeah.

Paul: There’s too many Brians, too. We got a real Brian glut going on.

Dan: This is like the Y Combinator elite confusion. Yeah. I use it for a lot of different stuff. I also learned to not trust it with important things and everything like that.

Rich: Yeah.

Dan: I think, you know, and shopping is a category where obviously my interest is. And in the official data, like, I think it was only like 2% of queries are about specific products. But that, I think, underrepresents how much people are using it for advice on things that end up driving purchases.

Rich: Sure.

Paul: I’m going to bet it’s driving a lot of mortgages. Right? [laughter] Like, I think—no, for real, like, because it’s good. Like, “How do I buy a house?” Like, it’ll do a credible job.

Rich: It’ll say, you know, “I don’t know the economics of whether I can afford that house. Walk me through it.”

Paul: Yeah.

Rich: And it’ll ask you your income. It’ll ask you—it’ll do a quick run.

Dan: It peer pressured me into buying a plane ticket the other day at a specific price, and it was right. I’m probably going to switch insurance companies because of it. Like, all kinds of stuff that it has advised me on.

Paul: Which people may not even think of as shopping or being a consumer, right?

Dan: No. And it’s hard to attribute that, you know, as, I’m sure everyone here has dealt with ad tech, as a, you know, as a founder or participant. And, like, attribution is super hard when all you have right now is an app and an UTM code. There’s, you know, and that’s why they’re trying to close the loop with this instant checkout that Shopify has signed up to be a part of. Walmart has signed up to be a part of, inside of ChatGPT.

Paul:  And Etsy, too.

Dan: And Etsy, too, which is actually live now. And then others will come, but—

Rich: We’re running fast here. You can make—and I’m saying, I know. I’m aware of these capabilities, but let’s say them out loud for the audience. You can buy stuff inside of the chat?

Dan: Now you can. Yes.

Rich: So—

Dan: I think only Etsy.

Rich: Yeah, okay.

Dan: Yeah. But soon Shopify will enable it for any store that wants to be part of it. Walmart, Target, Instacart, it’s all coming.

Rich: I’m looking for a spatula set. Today it already shows pictures of products and you can click out to the web. You’ll be able to make the purchase. There’ll be a cart inside of ChatGPT.

Dan: Yes.

Rich: Wow.

Dan: And it will be able to drive attribution there. And then we’ll have a bigger sense of how—so right now it’s a very small portion of commerce, but it is growing.

Rich: Yeah.

Dan: So that’s interesting to me.

Rich: Yeah.

Dan: And then I’m also interested in kind of how AI will affect people’s jobs and careers, how it will affect society, et cetera. And also just kind of how people think about it. That was one of our survey questions. We always ask, “How does the concept of AI make you feel?” And the answers are, always kind of the top two are hopeful and worried.

Paul: Sure.

Dan: And the people who answer them are very different. Younger people are much more likely to say hopeful than worried, and older people are much more likely to say worried than hopeful.

Paul: That’s true about everything.

Dan: But it feels like Millennials have the highest expectations for AI than of anyone else, which are people kind of between 30 and 45, 29 and 44, specifically in our survey, but—

Paul: That’s because it gives them awards.

Dan: It gives them awards… [laughter] Because I think also, like, in terms of jobs, they’re the ones who are using it perhaps to their advantage right now.

Paul: Right, right.

Dan: And are also not like, worried about their career vaporizing if they get—

Paul: I mean, I think there is something too. Like, that particular cohort, right, is now at the manager level.

Dan: Yes.

Paul: And so they’re getting, they’re a little more senior and they’re like, “Oh, this thing really helped me boil down that PDF, and I was so bored by that.” Whereas Gen Z is just sort of like, “I gotta answer these phones and help people with shoes.”

Rich: It’s also related to their openness about tech in general.

Dan: Yeah.

Rich: And that, you know, when you’re older, you’re more like, “Argh, get off my lawn.” You know, that that posture is different with any change, period. And Millennials grew up with these phones in their pockets, for the most part.

Dan: And are not as burned out by the concept as Gen Z is. Like, Gen Z seems to be a lot more cynical and less trusting than Millennials are.

Rich: Okay, that’s interesting. Explain—dive into that distinction.

Dan: Well, for example, we ask, “How do you expect the rise of AI to impact your career and earning prospects?” And Millennials are the highest percentage of people saying very positively. 40% of them say very positively. Another 26%, 27% say somewhat positively. So there’s a very high positivity there. Gen Z lower in both of those. Only 27% say very positively, and 23% say somewhat positively.

Paul: I buy it. A third of your life has, at least, has been the Trump presidency. And you’re just watching America just go through it relentlessly. And there’s lots of reasons not to be optimistic. Like, you’ve just got a lot of signal that things may not be aligned in your interests.

Dan: Similarly, we ask, like, “Do you think AI will make life better or worse for the next generation of Americans?” And Millennials are, you know, 70%, 69% say better, and then only 46%, 47% of Gen Z. So there’s like, a real drop off that, and then if you go the other direction, even lower.

Paul: Like, and this is—I mean, give me a sense that the survey is 3,000, I think you said?

Dan: 3,000 people. Yeah.

Paul: Sort of from everywhere, or…?

Dan: That’s the goal, yeah. To be as geographically distributed—

Paul: Okay. And the survey firm, they’re like, “Here’s who we got.”

Dan: Yeah. This is the company that does the main consumer confidence survey. Like, they do the big surveys.

Paul: Okay.

Dan: And they have millions of people in their panel, and you can do infinite targeting and all that kind of stuff. That is time consuming and inexpensive. So we don’t do that. But we try to have a nationally representative by age, and then we try very hard—and then by gender, and then we try very hard also to have, like, income splits and geographic splits and all that kind of stuff.

Rich: Sure.

Dan: So I could tell you, like, how the Northeast and South feel differently about different things. We see actual real differences in what online payments tools they use. There’s kind of Venmo in the Northeast, CashApp in the South vibe happening. That’s a real thing.

Paul: Whoa. Okay.

Rich: I would have guessed that.

Paul: I would not have guessed that.

Rich: Yeah.

Paul: I just would have thought Venmo for everyone. But I live in a bubble.

Dan: You live in a bubble. And this is, to me, the most interesting thing about this is learning where I live in a bubble and where I don’t live in a bubble.

Rich: Sure. I want to go back.

Dan: Let’s do it.

Rich: To Gen Z.

Paul: To the 1990s?

Rich: Why… [laughing] Cocaine! What did we learn? Gen Z souring is fascinating to me. Usually, as new tech shows up, younger people don’t have baggage. They don’t have, they’re not curmudgeons about things, and they embrace things and they kind of roll with it. And yet we’re seeing a turnaround, a reversal, so to speak, from Millennials to Gen Z.

Paul: Why are they so grumpy?

Rich: Why?

Dan: Why so that’s called qualitative research, and I need to do some of it. I don’t know. I wish I knew.

Rich: Yeah. Were you surprised by this result?

Dan: I mean, an economist can give you a very thorough explanation, I think, for why the job market right now for new graduates is not what it was for Millennials.

Paul: Yeah, but that would be exhausting.

Dan: But that would be boring.

Paul: We don’t want to talk to economists. [laughter]

Dan: Well, here’s, I think, like, Millennials grew up with the internet and saw it as an enabler in many ways, and it shrunk the world and it gave us jobs and it created new industries, and it made a lot of people a lot of money. And Gen Z is coming into the tail end of that now.

Rich: Yeah.

Dan: And they grew up during COVID. They played a lot of video games. More than two thirds identify themselves as a gamer.

Rich: Sure.

Dan: And I think they’re just more skeptical. Like, whereas a Millennial may see a perfect Instagram moment as the ideal, the Gen Z wants the really jagged TikTok video, and thinks that’s really cool. So this was one of the things we really wanted to understand in our survey. We had seen in the past where Gen Z was more worried about AI than Millennials. We want to understand why. And someone was like, “You know, it’s because of the environment, man. Like, they just don’t want the water and the power to be…” [laughing]

Rich: Yeah.

Dan: And so this, this last survey, I was like, “I don’t think that’s true.”

Rich: Yeah.

Dan: “What actually is it?” So we then we asked, anyone who said that they were worried about AI, we asked them why they were worried about AI, and we put that as one of the possible reasons is, like, the environment stuff. No, no one, no one chose that. It was, it was like job stuff. It was like, “We don’t—I’m worried it’s going to cause job losses.”

Rich: Yeah, yeah.

Dan: And then spread misinformation and blah, blah, blah. So it’s not, has nothing to do with the cooling and the water.

Rich: It’s about their own personal goals.

Dan: Totally, yeah.

Rich: I mean, that’s—”It’s going to affect my life. I’m going to university, I’m going to graduate, and I’m going to have a harder time.”

Dan: Yeah.

Rich: Because these things seem to be able to do everything.

Dan: Totally. And it is really hard. Like you know, all the stuff that we did in school to prove our, that we were learning stuff.

Rich: Yeah.

Dan: Like you don’t, you can fake all that now. Which is crazy.

Rich: Yeah. I just want to speak to the Gen Z generation directly for a moment and just to give them some peace of mind that many Millennials are screwed as well.

Dan: [laughing] Yeah.

Paul: A lot of them—

Rich: The Millennials think they get to close the door behind them. But this thing is going to have a far-reaching impact beyond just—

Dan: Oh yeah, all those VPs that you report three layers into? They’re all screwed.

Rich: Oh! Middle management, Gen Z?

Dan: Forget it.

Rich: It’ll take care of them, too. Don’t worry about it.

Paul: I mean, Gen X already knew it was going to turn out really badly. [laughter] So look, let me do this because I want to, I’ve got this audience on this podcast and a lot of them are, literally, a lot of them are product managers who work on websites and their websites sell things and promote things. Right?

So the world’s changed. You’re seeing the world change. The consumers are changing a little bit. AI is showing up. There are new ways to sell stuff and do stuff. Like, aside from subscribing to The New Consumer, which obviously they should do, what do you think they should be doing? Like, I got this website, we’re integrated with Shopify. Should I just like kind of lean back and let ChatGPT take it, or should I be figuring out how to engage with this? What would you tell me to do?

Dan: I think that it is important, important to learn the language and speak some of it. You know, I think just hiring really good social media managers who can play the game and are results-driven I think is important. You know, there is an art to it, but there’s also math and ROI and you know, make sure that you’re not just goofing around. The other thing that we really learned is that sentiment is not reality. Like, people say they’re miserable now, but they’re spending money like they never were before. And so you kind of have to ignore all of it.

Paul: Are they telling you they’re miserable in the survey or…?

Dan: I mean, actually our survey looks a little different than this, but if you look at like the main, the highest-quoted consumer sentiment survey from the University of Michigan, the American consumer on average says they’re worse now than during the, during the great financial crisis. Then after 9/11, like all these times when things were legitimately bad. And right now things are actually—look, there are people who are hurting. No doubt. And—

Paul: No, but just in aggregate. They’re just slamma-jamming their credit cards on Amazon.

Dan: Yeah. The holiday shopping numbers exceeded expectations, and you saw headlines for weeks, like,”Gen Z slashing their shopping budgets.” No, it didn’t happen.

Paul: Interesting.

Dan: So a lot of things people say, they’re just saying and they’re not doing. So also, that is the truth, too.

Paul: Okay, so we’re complaining, but spending.

Dan: 100%.

Paul: Okay.

Dan: Yep.

Paul: Honestly, that’s true of you and me, Rich. [laughter]

Dan: Same.

Paul: Yeah, exactly. I complain and I spend. So really your advice is, and it’s the same advice we give, which is like, now would be a good time to learn to use the tools and it would be good to get people who are conversant. And—

Rich: We say this a lot.

Paul: Communicate.

Rich: Yeah. Don’t resist. Learn, understand.

Dan: Make it great.

Rich: Make it great.

Dan: People are going to love it.

Paul: Yeah.

Rich: Okay.

Paul: Well, my goodness, consumers. I know them a little bit better now. I do. I thought I knew them, but I know them a little bit better. I didn’t know about all this. Gen Z, they’re all just crabby. They look crabby when they… Yeah, yeah. [laughter] You walk down the street and they’re like, “Ugh, God.” I just thought it was me.

Dan: You know who loves AI? My four-and-a-half-year-old son. You show him a picture of him as a Lego and he’s the happiest guy on the planet.

Rich: Ah, that’s wonderful.

Paul: I’ll tell you what loves AI is the group chat. The group chat loves AI.

Rich: Yeah.

Paul: Maybe not for anywhere else, but the group chat is like, “Hey, I put you in this,” and yeah, okay, you really did. Thanks. That was 200 bottles of water. It was worth it.

Rich: It feels shameful to pitch Aboard right now. A business to business platform that ships software faster and better with AI.

Paul: No, but what we learned is that Gen Z will tell us they don’t want it, but they secretly do.

Rich: Well, they don’t have the budgets anyway. Millennials! You want to save your job? Check out aboard.com.

Paul: That’s right. And if you want to—okay, so before boy, you went straight to the marketing. Dan, help people, if people want to get in touch with you and if they want to see this report, what do they do?

Dan: They go to newconsumer.com and it’s right there.

Paul: Man, we shilled you hard on this bad boy. [laughter] We did good by you.

Dan: Thank you so much.

Rich: Get us a bundt cake, Dan.

Paul: Seriously, get that VC firm to host an event. All right. So that, okay, so it’s there. You can go see it.

Dan: Yeah.

Paul: That’s free? Freely available to all?

Dan: It is. Yeah. But if you like it, maybe become a member.

Paul: Wow.

Rich: Then you get the juice.

Paul: Well, then you graduate from mere reader to consumer.

Dan: And you can do office hours and maybe we’ll do a grocery tour someday, so…

Paul: I gotta tell you, man, I think that that would be monster social content.

Dan: I think we should do it.

Paul: Dan in the grocery store, being like, “Okay, here’s how this got here?”

Dan: Yeah.

Paul: [chef’s kiss noise] I would watch that all day long. That’d be great.

Rich: Okay, Dan, this is great. Thank you for doing this.

Dan: My pleasure. Thanks so much for having me.

Paul: If anybody needs us, hello@aboard.com, and yeah, Dan, thanks. And safe travels back to LA.

Rich: Everyone have a safe, lovely holiday.

Paul: We did it. We ended on a nice commercial note.

Rich: Yes. And be safe out there. Happy New Year, and we’ll see you on the other side.

Paul: A lot of good podcasts coming. Are they gonna be better in this one? Probably not, but maybe. We’ll see. Gotta keep listening. Gotta keep listening. And a lot of new stuff happening with our platform. We’re very excited. We got clients and we’re going to have more, and we hope you become one of them. So hello@aboard.com if you need us.

Rich: Have a lovely week. Bye.

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