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Kevin Rose’s Simple yet Effective Approach to Evaluating AI Hardware Investments
Kevin Rose, a seasoned investor and general partner at True Ventures, has a straightforward rule for assessing AI hardware investments: “If you feel like you should punch someone in the face for wearing it, you probably shouldn’t invest in it.” This candid approach stems from his experience watching the current wave of AI hardware startups repeat mistakes he’s seen before. Rose, an early investor in Peloton, Ring, and Fitbit, has largely avoided the AI hardware gold rush that’s consumed Silicon Valley.
Rose’s skepticism towards AI wearables is rooted in their potential to disrupt social constructs around privacy. “A lot of it is just like, ‘Let’s listen to the entire conversation,'” he says. “And to me, that breaks a lot of these social constructs that we have with humans around privacy.” As someone who was on the board of Oura, which now commands 80% of the smart ring market, Rose has witnessed firsthand what separates successful wearables from failed ones – emotional resonance and social acceptability.
The Importance of Emotional Resonance and Social Acceptability
Rose emphasizes the need for investors to consider the emotional impact of AI hardware on users and those around them. “As an investor, you kind of have to not only say, okay, cool tech, sure, but emotionally, how does it make me feel? And how does it make others feel around me?” he explained. Rose admits to trying various AI wearables himself, including the failed Humane AI pendant, but stopped using it after it caused tension in an argument with his wife.
The “tourist use case” – using AI glasses to identify monuments, for example – is not enough, according to Rose. He believes that bolting AI onto everything is “ruining the world,” citing features like photo apps that let you erase people from the background. Rose worries that we’re in an “early days of social media” moment with AI, making decisions that seem harmless now but will haunt us later.
A New Era for Entrepreneurship and Venture Capital
Despite his reservations about AI hardware, Rose is optimistic about the transformative power of AI in entrepreneurship and the venture capital industry. “The barriers to entry for entrepreneurs are just shrinking with every day that goes by,” he observed. Rose predicts that the advent of AI coding tools will enable high school students to build billion-dollar businesses, changing the venture capital equation.
Rose believes that the value proposition for VCs will shift from technical expertise to emotional support and long-term partnership. “At the end of the day, the entrepreneur is going to have issues that are not technical,” he argued. “They’re very emotional problems. And so I think the VCs with the highest EQ that can show up best for the founders as their long term partner – that have been with firms and aren’t hopping around, that aren’t just fly-by-night VCs but have been around and seen these problems at scale – they’re going to be sought after.”
When making investments, Rose looks for founders with a “healthy disregard for the impossible,” as Larry Page once told him. He wants founders who are “swinging for the fences with big, bold ideas that everyone else says, ‘That is a horrible idea. Why are you doing this?’” Rose believes that even if these ideas don’t work, the founders’ minds and approaches are worth backing.
Read more about Kevin Rose’s approach to AI hardware investments and the future of entrepreneurship and venture capital Here
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