A16Z has been on a tear recently with blog posts and podcasts chock full of insights.

Yesterday Ben Evans published an interesting article examining Alexa and the ecosystem. In it, he examines whether Alexa has reached any kind of useful fit for Amazon:

Amazon, on the other hand, sells things. Its TV shows help it sell things by driving Prime, which pulls your purchase of children’s shoes or soap into Amazon. It’s not yet clear what Alexa does for this. Indeed, the bear case for Alexa is that Amazon has succeeded in selling a huge number of glorified clock-radios - today, the survey data suggests that people mostly use these for audio (music and podcasts), the weather and kitchen timers, plus maybe trivia questions and controlling a smart light. If that’s all that people ever do, then as far as Amazon is concerned, Alexa is at best just a form of marketing.

It’s a great article. I’ve written a quick summary / notes for my own purpose:

  • Amazon has figured out a way to sell 100m units of something that is internet connected and has a direct connection with end users. They understand that because of aggregation theory, this gives them control and in turn, optionality.
  • Amazon doesn’t yet know what to do with this, and is furiously experimenting with different use cases that can have a stronger product/market fit with consumers. It’s current use cases - acting as a smart speaker, and connecting to smart devices - probably isn’t it.
  • One of the problems it has to solve along the path is building a voice app platform that makes it (a) easy for humans to interact with and (b) a healthy marketplace for developers to compete for user’s attention and ultimately, dollars.
  • If it cannot figure this out, it probably runs the risk of becoming the Blackberry of smart home devices.