VWV Volumes #29: Analyst-in-Training Ethan Wei on The Future of the Internet Experience
Ethan Wei discusses the shifting dynamics of the mature internet sector and the evolution of user experience in the startup ecosystem.
In the last few years, the startup ecosystem has silently inched its way toward an inflection point: full internet penetration. Embracing full connectivity is great — the internet has democratized access to education, community, and healthcare.
Still, there’s only so much time in a day. The vast majority of Americans already spend over 6 hours per day online, and the rest of the world isn’t lagging far behind. The software industry’s market size will soon plateau, converting the startup ecosystem from positive-sum to zero-sum.
The Maturing Internet Sector
Once the software industry reaches full maturity, Internet incumbents become more powerful. Startups no longer have the potential to capture a new market; instead, they must steal away users from current products. VCs will no longer be able to take risks on the promising financials in an industry; instead, they must buy into the company’s ability to outperform existing solutions. That’s why this trend is important. In a plateauing sector, access is no longer the bar for success; user experience is.
Thus, we’re witnessing the emergence of companies aiming to make the next leap forward in user interfaces. The next generation of internet users will likely have radically different computer interactions compared to us, both from a hardware and software perspective. Companies seeking to innovate seem to be divided into two categories: the incrementalists and the maximalists.
Incrementalists vs. Maximalists
The incrementalists are pushing the boundaries of our current internet, trying to bridge the gap between the internet experience today and the internet experience of the future. The Arc Browser by The Browser Company is the best example of this. While the Arc Browser is different in design compared to any other modern browser, it’s still fundamentally powered by Google Chrome and has the same basic functionality as all the other browsers. Augmented reality devices can also be grouped in this category. Products like the Apple Vision Pro are significant but not radically different from AR technologies that have been implemented in recent years using LiDAR sensors.
On the other hand, maximalists aim to create completely new form factors and methods of interaction for user interfaces. Humane, Tab, and Rewind are all startups trying to establish a completely new norm of human-computer interaction using AI. Rather than a screen, their thesis is that completely voice-controlled interactions will be more effective and useful for the future of computing. Similarly, immersive technologies like Meta’s Quest headsets are building a completely virtual interface for the internet. While these companies are taking a much riskier approach to innovation, they have the potential to define new categories of products, similar to how Apple largely defined the early smartphone revolution with the iPhone.
Regardless of the approach, it’s clear that user experience will start to take precedence over access in mature industries. For example, the mature airline industry offers little room for new entrants. Most new startups in that sector offer improvements complementary to existing airlines rather than being a competitor to the major airlines themselves. Products like faster TSA check-in, better aircraft wifi, etc. are typically more successful, because small improvements are not enough to sway customers away from incumbent airlines.
Closing Thoughts
In the internet sector, we’ve already begun to see murmurs of the industry maturing. Platforms like YouTube and Amazon dominate the streaming and e-commerce markets, respectively. Social media companies like Meta and TikTok have billions of users. These companies have established themselves as the go-to choices for users, making it difficult for new startups to break in.
As a result, successful companies of the future will need to find overlooked improvements in the internet experience, either by providing interfaces that provide easier access points to the internet, or by making the software experience as seamless as possible.
About the Author
Ethan is a first-year from Southern California who's deeply interested in consumer products and human-computer interaction. In the past, he's worked as a PM Intern at EV charging startup EV Connect, an Operations Intern at Meta, and a Strategy Intern at UCLA. At Brown, Ethan is involved with Brown Taiwan Society, Brown Consulting Club, and is a Venture Partner for Contrary. In his free time, you can find Ethan watching basketball, tinkering with 3D printers, and searching for good restaurants.