FLASH: Sam Altman Talks Instant Checkout in Awesome Stratechery Interview
Merchant alignment, ChatGPT Trust Incentives and ChatGPT Ads
A lot of ChatGPT Instant Checkout naysayers use two arguments against the release:
Socials tried and failed - Instagram, Facebook, Twitter and other social networks have tried a checkout (marketplace in my vocab) and retreated, how will this be different?! (note: they conveniently leave out TikTok Shop which is estimated to have GMV of $33-40b which is a heck of a bad job at failing š)
Trojan Horse for Ads - Ok, this checkout isnāt biased TODAY, but eventually just like Amazon w/ sponsored listings, Google with PLA, eBay with sponsored listings, eventually it will become āAd slopā.
Ben Thompson @ Stratechery Enters the Conversation
Iāve been a Stratechery fan and subscriber since the first 10 issues. Itās a weekly-ish publication by an analyst named Ben Thompson and also now has a podcast version. The podcast version is the best for the interview segments as I like to hear the voices vs. reading a flat transcript, therefore hereās a video of a short snippet of the podcast that is < 6mins and worth a listen.
Iāve been DYING for someone at OpenAI to be asked these two naysayer questions and dang if Ben didnāt just jump right in and knock both of them out of the parkā
Instant Checkout
Yeah. I think one thing thatās interesting about Instant Checkout, there was some, speaking of analogies, there was discussion when you launched that about how some of the social networks have abandoned in-app checkout just because it didnāt convert as well, the e-commerce sellers want them on their site. Is that a matter of, thatās almost like a bit of incumbent overhang, they have certain things that work and you feel you can do it better, youāre providing so much value to the long tail thatāll be worth it and if youāre going to prioritize who offers Instant Checkout, assuming everything else is the same, youāre not going to be biased in your results, then folks have no choice but to get on board?
SA: Two things there. One, I donāt know why the other sites have abandoned instant checkout, because I think it is one of these things that is just like, as long as you let the merchant have the direct relationship with the consumer, which we do, I think itās just better, that oneās just better for everyone, itās a better user experience, itās better for merchants. That one, maybe we will learn some lesson that everybody else learned and weāre just wrong about this, but that one seems really good.
On the second part of the question. I was going to say, if we ever start doing anything that is not our best effort to get the user the best answer we can give them to their question, trust in ChatGPT, which is extremely high on the whole, would fall precipitously. So we have such an incentive not to do that.
There is a reason people love ChatGPT in a way that they donāt love other large tech companiesā products and I think it is, even when ChatGPT screws up, hallucinates, whatever, you know itās trying to help you, you know your incentives are aligned.
Yeah. I think what occurs to me, Iām extremely excited about this, I love anything long tail related. My business is long tail in many respects, and one of the reasons I was always a big Meta defender is because I think the value they provide, the long tail, is huge. It lets merchants find customers, show them products they never wouldāve known they wanted otherwise. One of my surprises about moving back to America, I thought Instagramās ads were good, now theyāre really good, itās actually unbelievable how much stuff Iāve just bought for the house and things like that.
It feels like ChatGPT provides the inverse ā it lets consumers with a vague idea of what they want actually hone in on specific products that they didnāt know existed, and the way I think about this is, because you want to be trusted 100%, youāre not going to take anything really from those transactions. If I find a customer and they really want me to go to the website to transact, youāre going to be fine with that. Tech companies throw off a lot of consumer surplus, thatās fine. Where you can monetize is if itās a product, to your point, thatās available on 10 retailers, well, if youāre a retailer that uses it to Instant Checkout and ChatGPT gets a little bit of that, then theyāre the ones that are prioritized. I mean, thatās the way Iām thinking what youāre doing.
SA: First of all, on the Instagram ads point, that was actually the thing that made me think, okay, maybe ads donāt always suck. I love Instagram ads, theyāve added value to me, I found stuff I never wouldāve found, I bought a bunch of stuff, I actively like Instagram ads. I think thereās many things I respect about Meta, but getting that so right was a surprisingly cool thing for me. Other than that, I viewed ads on the Internet as sort of like a tax.
Well, I think thatās the problem is I think search is mostly a tax. Usually the organic results will have what you want, and then Iām going to buy ads to be on top. Iāve always defended Meta, Iām like, I think actually this is the ad model we should be happy about.
SA: I agree with that.
So how do you think about your possibilities with business in that context?
SA: I mean, again, I believe there probably is some cool ad product we can do that is a net win to the user and a sort of positive to our relationship with the user. I donāt know what it is yet, Iām not like, āHere is our ad modelā already.
But affiliate seems like a clear win, itās not like you have to worry about cannibalizing your ad business.
SA: Yeah. That seems like a clear win.
Transcript snippet and full transcript
The whole transcript is here and the Instant Checkout snippet isā
Conclusion - Sam Altman: 2 // Naysayers: 0
Socials tried and failed - Sam cleverly goes into this by avoiding talking about the fails, and instead talks about their thinking: Consumer trust is key and building an ecosystem with the merchant in the loop.
Trojan Horse for Ads - The statement above already blows this away, but in the instagram convo he explicitly says if they do ads it must must must be value add - to me this is some interesting surfacing of things in the discovery process (Instagram/tiktok examples) OR donāt forget Fidji built the Instacart ad system) - value add in the Buy process -e.g. Hey you are buying X, get Y for a discount - more of an add on type thing.
What do you think? Did he put these two issues to bed for you? LMK in comments or chatā
I think everyone walks a fine line from CX and monetization and I haven't seen the OpenAI Charter declare we will never own the check out, this was just the first GTM motion and it's a few weeks old. It is almost like the old affliate model like you stated previously, but that crew is pretty agile and I think right now they want more agents not more revenue.