--:-- Scott Belsky: Well, I think that creatives, and I mean, we're all creative, but like creative professionals, they hold dear their ability to achieve what's exactly in their mind's eye. And if you think about it, that's the antithesis of the notion of these generative AI models that essentially are trained on a discrete data set and always essentially output like the center of the distribution of the data that it was trained on. These are also creators who are oftentimes trying to stand out and do something different. And so in some ways, they're frustrated with the average manifestation of their prompt, right? They want something different. Also, I think these creators want choice and models. So one of the concerns I have about the companies that are model companies competing in this space is that if you're a model company, it's hard to offer all the models. One of our major decisions that we've made at Adobe over the last year is to actually become a platform agnostic model company. So we do build our own models in a way that's commercially safe and is important to a lot of our customers. But we're also going to support all the major models and people are going to be able to choose which model they want for which action. And I imagine there will be probably thousands of models, some that specialize in animation or explosions or drone aerial shots or whatever the case might be. And customers, creatives, want to have their choice of what model and they want to be able to use it in their workflows. Creatives have always complained about workflow, right? I mean, the whole notion of work and flow, like flow is the creative state where you can just do whatever's in your mind and work is what gets in the way of that. So if we can remove more of the work from workflow, that's the ultimate holy grail for most creatives. And I think that that means that a lot of these pieces need to be in the same tool oftentimes. Totally. And maybe building on that, where do you see Adobe in that evolution of how creatives interact now with AI? You know, a lot of folks think of some of these AI models as the camera. But of course, there's AI-assisted tools within some of the existing toolset. And so how do you think about where's the right place to expose AI in Adobe's current products? And are there any areas where you think a net new interface makes sense? So we're doing both. We believe that all of our products, including the marketing products, not just the creative products, need to have AI and exactly the right time and place. So whether that means having an agent that critiques your design work or can critique your design work based on a certain persona that you're trying to target with your marketing, that's something that we're surfacing within products like Photoshop as well as the marketing products. The ability to, of course, generative fill, generative expand, like all those sorts of things are integrated throughout the entire suite. But we're also building these net new native Gen.AI products that are really throwing out the playbook of the assumptions of layers and everything else and really just starting from scratch. And we talked about publicly a project called Project Concept, which is basically like mood boarding and concepting in the age of AI. So it can let you start with your work. It can let you source stuff from stock or wherever else. And then it lets you use, it has the Firefly models, but also has the Flux models. And you can just start to go crazy. And the cool part about it is that if you have an image here and an image here, you can use a little eyedropper and take some ingredients and aspects of this image and then apply it to this image and then use that as a prompt for your next image. So it's really like a remix type of product as an example of a native Gen AI product that we're building. So we're looking at both. We're also trying to partner with a lot of folks in the ecosystem. I mean workflows has always been really important in terms of how creatives work So historically we always worked with different sound products We always worked with different motion graphics products And similarly the products that are in the ecosystem we want to like invite into the flow I think that that ultimately makes our customers happy. Awesome. What creative problems do you think AI is unsuited to solve or help? Where does AI stop? This is like one of the greatest questions I think about all the time now. Because AI is only getting better. And yet, what makes creative content really effective is when creative content moves us in some way. Now, what makes something move you? It's usually emotionally triggering. It's usually a story you didn't expect. It's usually something that has to do with the taste and the meaning that was injected into the content by the creator. And AI is not good at that. AI is good at doing things that have been done and applying things to formulas that have been declared as efficient formulas on the internet for telling stories. If you talk to great directors, I spend a lot of time these days really interested in the whole filmmaking and storytelling space, just personally, less Adobe, more personally. When I talk to these directors, they talk about how it's all about the timing, right? You can have one scene with actors, and if it's like one second too long, either the joke doesn't land or it's not emotional or it's not real. And so, so much of that intuition is very much based on this director's personal view on the world. That is not something that I've seen to be replicable by AI. And so I think that these tools need to enable humans to, again, automate more of the work part so they can do more of the flow part. And the flow part, if you could spend 10 times the amount of time you have every day on the flow part, you can do even more meaningful, more incredible stories. And if I were to sum up my declaration about my thesis for the next 10 years, it's going to be that taste will outperform skill. Because skill is going to be offloaded to compute. And what's going to differentiate everything you do in life? Taste. Do you think there are any use cases where you could have 100% generated, fully personalized for Scott Belsky entertainment experiences where there's no human interfacing? Well, first of all, let's start definitely for marketing purposes. So we have a product called GenStudio now. You take a campaign that you made, right? And then you say, great, I want to mount this folder of 10,000 images. I want to employ this copy agent to make 10,000 slogans. And then I want to create this in 120 languages. And then you push the button. And then literally it creates like 160,000 assets that you can then drive across platforms and do A-B testing and automate this and whatever else. Like that is the future. And when you think about all the production costs that is currently spent on stuff like that, it's just insanity, right? So there's no reason why that should be done manually. That should be done through AI. And with the human labor you free up from that meticulous production work, you're going to come up with, instead of one campaign to test, you're going to come up with 100 campaign ideas. You're going to raise the ceiling of what's possible, right? Now, on the entertainment side, it's a little different. I happen to believe that part of the entertainment sensation is a shared experience. I can't talk about House of Cards with you if we saw a different House of Cards, right? And I will stop talking about it because I'll know that you saw a different one and it's not a shared experience. I would anticipate a hybrid. Back in the Behance days, we always thought about building networks as like the 99-in-1 model. 90% of people consume, 9% sort of curate, and 1% create. And if you think about it, if you apply the same thing into this new world we're in, I imagine that 90% of people will just consume content and want a shared experience. Maybe 9% of people will be like, oh my gosh, imagine if that episode ended this way and they might engage in the tools that you allow them to with character, IP, in whatever licensing we have to make a variation. Or maybe the 9% are the ones who curate and decide what's worth prime time for the 90% to see. So I think it's going to be a similar model, but I just don't think that everyone will have a personalized movie. Yeah, no, I agree completely. I think I could watch an endless supply of Star Wars content. Streaming, just in your eyeballs, right? But if I don't have a place, if I don't have like podcasts, as much as I enjoy watching it, I also enjoy listening to podcasts and reading Twitter and Reddit, et cetera. And if I don't have that shared experience, but you can sort of amplify that shared experience if I can remix the ending of Rogue One or you name it. I mean, one other like thought experiment, which I'm sure people have thoughts about, but I've been thinking a lot about the history of what happens in periods of abundance for any sort of item. So when shoes become ubiquitous and commoditized, what do we end up doing? We end up seeking more scarce versions of shoes by buying higher price shoes that are branded. And same thing for handbags and same thing for cars. Like when anything becomes commoditized, humans seek the scarce version and are willing to pay more. And so what happens when content is commoditized? I mean, historically, it hasn't been commoditized. It was super expensive to make entertainment content. Now that it's not, will humans react in a similar way? Will we start to seek the more scarce, higher premium, higher taste version of the entertainment content or not? I think that's an interesting debate, but I personally would be bullish on the best storytellers in the world in a world where anyone can be a storyteller. Fascinating. You talked about ad creatives and marketing use cases. From your purview at Adobe, you get to see what the entire media landscape or entire user base of Adobe is doing. What has been the general reactions across the spectrum towards AI? Like which use cases are really diving in, which are more hesitant and why? Well, we're at a moment in time right now where there definitely are two factions on either side of the spectrum. On one side of the spectrum, there's a good swath of the creative professional community, especially illustrators and graphic designers that are extremely threatened by this technology, really worried about the implications and have become basically anti. And I just think that you can never fight the advance of technology, right? But what you can do is find ways to make it work for you. And we're involved with the conversation with that community. And I think that they'll start to tinker and recognize that there may be appropriate ways or ways that they're comfortable with leveraging it while also retaining their craft. On the other side, you have these kind of AI creative hackers who have basically discarded all their traditional tools and are like all in. And to them, it's like sacrilegious to use a product that is traditional. They just want to totally go pure AI. And it's fun to see them work within those creative constraints because they are constraints. You know, it's really hard to do in AI. It's like really hard to make an ad and describe the text and get it right. It's so much easier just to literally take it into Photoshop and write the text, right? But you can try and you can spin your wheels. There's that faction. But I don't know what the numbers are, but I would say like it's 10 and 10 and then 80 in the middle. I think the 80 in the middle are like, listen, I want to do the best work possible and I want to do the least mundane and repetitive work possible. And they're very much embracing these tools when it's appropriate. I want to step back a little bit to Behance founding experience. So it wasn't the traditional way that at least we think about starting companies. You bootstrapped for the first five years as you got the company off the ground. And then later in the journey, decided to raise venture funding. I'm curious, going back, would you have taken the same approach? How do you think of that in retrospect? I think about this a lot only because I get asked this question and I'm like not sure if it was a best or worst practice. I mean, we nearly died five years bootstrapping. The fact that we didn't meant that we could raise our first round was from Union Square Ventures leading five years into the business when we were break even. So we actually only had to sell a very small portion, relatively speaking. And then when we got acquired, that played a real factor because our acquisition, apples to apples, I was like, oh gosh, like it's actually the same outcome as if we took two more rounds of funding and that much more dilution and that much more market risk. So I definitely played a role, a beneficial role. At the same time, there were some sideways lost years of Behance in that five years. There were a couple of years where we were not able to afford the talent we should have been hiring. We were not able to level up the team the way we should have. And I was, for some reason, very proud of being a bootstrapped company and having control over my own destiny and that sort of thing. It was a stupid ego thing because when my team started coming to me saying, I literally can't do the best work of my life here because I don't have the resources to invest in this opportunity. When we started to grow and we couldn't scale, I felt like an idiot. I was like, oh my gosh, like why am I depriving this team? And that's when we went and raised our round. So the one thing I would say is this, though. Resourcefulness is a far more powerful capability than resources. Resources, when you have them, you throw them at problems like carbs. It feels good, but dissipates quickly. Whereas resourcefulness is like muscle. When you develop the capability to address challenges in the hard way, that sticks with you over time. And I think that capability developed during that five years was valuable to us. Yeah, you mentioned the messy middle. And of course, you wrote a book on this. And so maybe unpacking that part of the Behance journey, when you faced the initial spark of excitement, and then a little bit of plateau, how were you able to keep the team motivated? How are you able to make the hard decisions about what features to deprioritize? I'm sure there were probably, you know, push and pull signals to potentially pivot some that you had to navigate. What are some of the lessons for the folks in the room who maybe had an initial spark, but are now sort of questioning whether that's enough to pull them to greatness? The Messy Middle Project was inspired by the fact that we don't talk about these questions. As a tech community, we typically focus on the romanticism of the start, and then these like glorious finishes, whether they're gloriously great or bad. That's the soundbite. Now, of course, there is a lot of really messy stuff that happens in the middle that all of you are also probably in the middle of. When it comes to this question, though, of when you should quit or when you should stick with it to me and to my friends who gone through this as well it all about this measure of conviction based on what you now know When you start and you starting from a place of ignorance you imagining this great product that solves this huge problem and everything goes up and to the right And that's a very easy period of the journey to have a ton of conviction in. And that's actually what helps us quit our jobs and unplug from the reward system of society and jump into starting a new business with tremendous amounts of risk. When you start to get shoulder to shoulder with customers, I think we all end up realizing to some degree that the thing we had in mind is at least 30 degrees off of product market fit of what the customers actually want. Why? Well, oftentimes customers do things in very strange ways. Like they won't use an enterprise product, even if it makes their life better, because they won't get as much credit with their boss. And so they'll do it the old way so that they look like they're doing the work that merits the credit. It's like weird, silly things like this that actually are the difference between utilization and not utilization of a new product. But no entrepreneur in the beginning has this belief that, oh, we have to stroke people's egos in the enterprise to get this product to be utilized. Like, we're all more rational and we're like, oh yeah, if it's a better product, people will just use it. So there's a lot of things like that as this one silly example that we learn in the process of shoulder-to-shoulder to customer that help us lose conviction. And as we're losing this conviction, it's always the question of, oh my goodness, what do we do? or sometimes we actually gain conviction, but the product in our mind keeps changing based on what we're learning. So when you're at that moment where you're like, okay, should I pull the plug and try something different? I mean, there's, by the way, there's no pride in sticking with something that's not working. That's just silly. It's a waste of time. So I always ask founders like this conviction test. I'm like, all right, knowing everything you know right now, either do you believe you just have the wrong solution and you have a good sense of what it is, but you still have conviction in that long-term view that this industry will change as a result of what you're doing? Or have you literally just lost conviction in the problem in and of itself? It's a false premise, or it's the wrong problem, or it's the total wrong solution space. And, you know, like, hey, if you've lost conviction based on what you've learned, like, quit. Try something different. Otherwise, stick with it, because that's just par for the course. So at the end of the year, you wrote some predictions about where you thought tech and AI were headed into 2025 and beyond. And I want to pull a few of those out and talk to you about them. One of them was a prediction towards more homegrown or DIY software, both on the consumer side and the enterprise side. So like consumer side, if family game night and create a game to play with your friends or your family. or enterprise software who's deciding that custom software built with AI tools is actually more efficient and more helpful than some of the third-party tools. For the companies in the room, both consumer companies and A2B tooling companies, how do you think they should reorient themselves around that evolution? Well, it's interesting. Since I wrote that, I got a lot of feedback. And my thinking has evolved a little bit. I think right now all the rage is DIY software. Replit, cursor, whatever, like being able to go in and say, I want this. And then it like pumps out this kind of half-baked app, right, that you could use for certain purposes. But it still requires a lot of final mile work to get it to really work. And that could be a threat of all of us building software if everyone can just build their own software based on the code that's on the internet or whatever. I'm actually more interested these days in what I've started to call conformative software. And what I mean by that is it's software that actually gets to know you and meets you where you are. If you think about it, software has always been generalized as much as possible for everyone. If you want a big TAM, you make the lowest common denominator app that everyone can use. And then you end up listening to requests from power users. You need to monetize. You need to add more features and capabilities. You need to make it enterprise-grade. And before you know it, you've made it complicated. And then some new startup supplants you, and everyone flocks to the simple product. And then the process repeats itself again and again and again. And that's what Silicon Valley is, right? I think it's interesting that this next generation of software may actually conform to each of us. So we may come on and the onboarding for you and me might be different. The tool set might be different. The purpose that you come into the product with and I come into the product with may dictate an entirely different experience. And that could be an agent-driven experience, but it could also be a new variant of UI that is driven by AI, right? So the UI actually conforms to the needs of the user and everyone has their own sort of tailor-made bespoke experience of this one piece of software that people are using. I think that's a much more likely future. And it's not like one SaaS company is going to enable that for people. Like everyone's going to be able to do it because we're all going to have customer data to leverage for personalization. We're all going to have these agents and LLMs that are personalizing the experience. And I think designers are starting to crack these like AI-driven personalized UIs right now. I think that's a huge part of the future. So I guess my thought for all of you is since you're building products that are going to be thriving in that era, think about your different personas and think about what different accommodating or conforming experiences you could offer that might make different personas thrive in your tools. It's a real TAM expander. It's interesting to think about the idea of generative UI and back to the conversation we were having before about creatives and what does that mean for a designer, a UI, UX designer, product designer, in terms of having the guardrails around that within your app ecosystem. Yeah, it's going to be pretty wild because the UIs that we put out there now, oftentimes as design teams, we're like very pure about. But as for those of us that use Amazon a lot, it's like Amazon's not a beautiful UI. It's just like super damn effective. And so you can imagine certain products be open where there's going to be a huge red button, and there's going to be three things flashing, and we're going to be like, oh my gosh, this is the ugliest thing I've ever seen, except I know exactly how to use it. And of course, voice is one of the areas that a lot of people are... I'm curious if you have any thoughts in terms of how voice may impact some of our consumer experiences in a more pronounced way over the next couple of years. Yeah. I'm excited about voice for the things that we know we want, but I am not excited about voice for any form of discovery in products that we need. Most product experiences and e-commerce experiences are so discovery-driven. So it's really hard to have discovery in voice, right? That's always been my concern there. I do think that voice is a very disruptive interface because it obfuscates choice away from the consumer, which some companies could use. I mean, if you can imagine if we're all going to be wearing these AI-enabled headphones and you say, I want a car, And it's like, great, I will have a car downstairs for you. You're not even going to be able to choose between Waymo, Uber, or Lyft anymore. It's going to be a third-party marketplace of APIs competing to satisfy your request. So it effectively removes the brand power, which is a very disruptive thing. That actually, this sort of ambient computing idea dovetails nicely into one of your other predictions for 2025 in an area that's near and dear to my heart, talking about AR. And you said that the legs for AR are now beginning to take form in some of the work that folks at Adobe are doing on the software side with Arrow and Project Neo. And then, of course, on the headset side with Orion and Apple Vision Pro. And you predict that we're sort of on the precipice of a big wave towards AR over the next three years, much like what we're seeing in AI. And I'd love to hear you unpack that a little bit more. And then if there's any kind of use cases for AR, maybe also coupled with AI that you think are really compelling. Well, it's, I mean, one of those sometimes in your career, like patterns hit you hard. And for me, the pattern that's hitting me hard right now is that I remember in 2015, 2016, the conversation around AI and its relevance and how transformative it will be in 2015 and 2016 is very similar. to the conversation right now about AR and immersive experiences, in my opinion. We don't know exactly when. We don't know exactly how. But we do know that the ultimate interface is like an inch away from our retina. And it's just so clear that's going to be so transformative. And back then, people always debated, is it next year? Is it three years from now? A lot of the startups that I saw back in that time in the AI world failed because they were too early or they misgenerated AI. So it's an interesting moment. But I would argue that in five to seven years, AR immersive is going to have all the buzz of AI today. I believe that at that moment when that happens, I think that context-aware OSs, like location-based OSs, where the stuff that I need to know right now based on the fact that I'm with you, that you're you, that I'm me, and I'm at A16Z, those are the context pieces that inform my interface right now. And it's fascinating to think that's the OS in some ways, is that context. And the context will probably be informed by AI. So I'm really excited. With my Adobe hat on, what we're trying to do is build the best in class 3D creative tools, both for video as well as for imagery, because we believe that people are going to want to contribute in that space. And as soon as it becomes mainstream, like every company in the world is going to want to have a really high-end photorealistic 3D environment. So I think it's going to be big. but it's a few years off for sure. What is maybe a contrarian view you have about AI that you're surprised is a contrarian view in the landscape of the conversation? I don't know how contrarian this is, but I think that most models will be commoditized, number one. Just, I mean, what is it? Chat GPT 3.5 is now like 98% cheaper than it was when it launched, and 4.0 is already like 90% cheaper. I mean, it's just, it's so dizzying. As a result of that, I believe that these model companies that are currently powering all these products are going to have to go up the stack to capture the value in the business. And as a result of that much like the Flashlight app was a profitable application until Apple shipped the Flashlight right I mean I think that similarly there going to be this large swath of applications that are wrapper apps whatever that are going to be just absolutely blown to pieces But even developer applications and products I mean, they have to go up the stack. And if you've raised billions of dollars to build these fundamental models that are ultimately commoditized, AWS did that. I mean, they went up the stack and started to build developer tools and new capabilities. And that was how they captured the margin of the business. So I do think that that's the case. Maybe that's not completely contrarian, but there are still tons of excitement about these model companies. And I just think they're going to be ubiquitous. I guess another thing I would just quickly say is also how much is going to happen on device. And if you think about it, the on device models are also becoming more powerful. The distance between the frontier models in the cloud and the on device models for a lot of categories of usage is actually narrowing. And so at some point, if 90 something percent of all the stuff that people want to do in your products is routed to a local model, then you're not paying any more cogs. These models are not making any more money, the big ones. So I also think people are underestimating the speed of local model meeting the bar. In your analogy of flashlight and iPhone, you are sitting at the iPhone company in this creative landscape. And so I'm curious for a room of folks building in and around the creative space, if you were then wearing your investor hat or builder hat, where do you think there are good fertile areas to build and where would you avoid incumbents? Well, I think that the two areas that I would be most interested in, which are actually maybe similar to the answer before AI, but one is network effects. Now, network effects also means data in the world of AI applications. So having data of what your customer base, how they're using a product, like what they need, how to make it better. But I also mean it from the standpoint of individuals. If you can understand me better than any other third-party product, I'm going to stick with yours. If you understand me across platform in a way that other products can't because they're only one platform, you're going to have me as your customer. I'm a big proponent of this notion in the consumer world of preferences being the ultimate moat. I think
