a16z's David George: product cycle is 9-10/10 right now, capital cycle only 6/10
a16z · x · 2026-10-02
a16z's David George lays out his "product cycles vs capital cycles" scorecard for 15 years of tech:
- AI is unique: money directly buys capability. "Throw endless money at ServiceNow or Salesforce and they'd get messed up; put $40B into training these models and they get much better."
- Scoring the cycles: 2021 was 1/10 (late SaaS, late cloud, post-mobile; no room for anything new). 2010 was 8/10. Right now the product cycle is 9-10/10.
- Capital cycle: 7/10 in early 2023, now 6/10 — "okay, but not great." Ideal is a 10 product cycle with a 10 capital cycle (rock-bottom valuations), but they almost never coincide.
- Takeaway: what drives venture returns over 10 years is the product cycle, and it's near its peak.
Conversation with @jaltma.
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