AequitasPhoebe Gates wants her $185 million AI startup to succeed with 'no ties to my privilege or my last name': 'I have a chip on my shoulder' | Fortune
Phoebe Gates cofounded Phia, an AI shopping assistant, with her Stanford University roommate Sophia Kianni. The shopping assistant plugs into browsers like Chrome and Safari to compare prices and surface deals across tens of thousands of retail and resale sites in real time. It essentially serves as your own personal deal finder: say you’re looking at a $200 dress from Anthropologie, Phia can find and compare prices at second-hand sellers to help customers find a better price.
That’s actually a neat premise. Fashion isn’t my cup of tea, but otherwise that sounds useful (albeit not very unique; shopping assistants are a dime a dozen).
Shareholders will expect their 185 million to turn into “more.” Someone will have to pay for this “more.” The business model will therefore boil down to either selling user data or companies paying to be given preferential treatment by the system. Probably both.
Furthermore, such services do not create any added value for the economy because, like advertising, they merely ensure that money is spent at B instead of at A. They are not productive and can be used much more efficiently by the bigger players.
That’s not right economically. If you were going to spend $200 at store B and now spend $150 at store A, that’s an efficiency of $50. You’re saying that looking for deals isn’t a market benefit, and it absolutely is. Now, their cut of it is of no benefit, and fuck AI. But the service is productive.
But then the seller is missing out on those $50, which they can’t spend anywhere else. From an macroeconomic perspective, the effect is zero. Like advertising, it only serves to allocate resources, not to create value. What’s more, it’s mainly large companies that benefit from something like this. Firstly, because of scale effects, and secondly, because they can sustain price dumping for longer than smaller companies.