Andrew Chen says AI apps now follow a new smile curve as models improve
andrewchen · x · 2026-07-29
Andrew Chen argues that AI has created a new kind of “smile curve” for retention and usage.
- In earlier eras, smile curves showed up in social networks, Uber-like apps, and SaaS collaboration tools as usage or revenue compounded over time.
- In AI, the curve is driven by foundation model progress: a product may feel mediocre at first, then become much better after a model upgrade.
- Once the product starts fitting into a real workflow, usage and spend can rise over time until it becomes indispensable.
His takeaway: in the AI era, something that initially seems meh may eventually become must-have.
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