Why this VC thinks 2026 will be the ‘year of the consumer’

Investing in consumer technology startups has fallen sharply since 2022, as financial turmoil and rising commodity prices have made VCs skeptical about spending money on consumers. Over the past few years, many AI investments have focused on winning business customers, who offer fat checks, multi-year contracts, and fast-track processes.

But one VC sees the consumer sector poised to rebound in 2026.

“This is going to be the year of the consumer,” said Vanessa Larco, a partner at the marketing firm Premise and a former associate at NEA, on this week’s episode on the Equity podcast.

Larco says that while businesses have significant investment and the desire to implement AI solutions, adoption is often difficult because they “don’t know where to start,” Larco says.

“The interesting thing about the consumer and prosumer … is that people already have an idea of ​​what they want to use,” Larco continued. “And they buy it, and if it meets the criteria, they just use it.”

In other words, adoption is fast, and AI startups don’t have to wonder if they’ll actually find a commercial market or if they’ve just hit it big.

“If you’re selling to consumers, you’ll know very quickly if it’s worth it or not, and you’ll know very quickly if you need to change or change some of your products or stop them and start something different,” Larco said.

And in today’s anxiety-inducing economy, consumer technology products that can expand are proving to be the most resilient in the market.

There are early signs that consumer technology is having a moment. Late last year, OpenAI launched apps in ChatGPT, allowing users to shop with the Target app, check the real estate market with Zillow, book tours with Expedia, or create a Spotify playlist, all through the ChatGPT chatbot.

“AI will feel like concierge services, that will do everything you can think of,” Larco said. “The question is, which of them should be specific, and which should be general purpose?”

Or to put it differently, as OpenAI is working to create ChatGPT a new way to use the Internet for consumers, companies whose legacy – like Tripadvisor or WebMD – will continue to exist in themselves, and what will be consumed by OpenAI?

Although Larco thinks that 2026 will be a “terrorist” year for M&A, he is interested in investing in startups that “OpenAI does not want to kill.”

“OpenAI doesn’t control real-world things,” he said. “I don’t think they’re going to compete with Airbnb because I don’t think they’re going to want to manage houses…

Aside from the fact that startups can fill the gaps, Larco is looking at what would happen if OpenAI “decides to pull an Apple or Android where they’re going to take a 30% cut of all the traffic they send you.”

“Does Airbnb want to play football with it?” he asked.

Overall, Larco predicts new revenue streams and new business opportunities will emerge from consumers’ evolving online experience.

‘Social needs to change’

While scrolling through Instagram about Trump’s arrest of Venezuelan leader Nicolás Maduro, Larco noticed something. He came to the platform to hear about the growing crisis, but was overwhelmed. AI made by Maduro slop.

While virtual reality has become more and more popular on social media, this was one of the first major cases where AI-generated abstraction muddied the waters of truth.

“At that point, I was like, if I’m just going to watch videos and pictures made by AI, I want it to be funny,” he said.

Larco says he’s been inundated with impressive AI videos on social media that people just think are AI at this point, and he’s not alone. When we all start to think that nothing we see on the Meta or TikTok platforms is real, the question will be, where do you get the real stuff?

Larco says others can fill the gaps in where to find real, non-AI platforms Reddit and Digg try to prove personality. But for Meta? Maybe it’s just an entertainment company, a platform for user-generated short films.

“I think we should continue to get your news from (Meta),” Larco said. “You’re only getting funny videos from there. It’s not social media, it’s sports and entertainment.”

‘Some things are better with words than screen’

When Meta got Manus the AI ​​starter last week, many saw it as a business drama. Larco thinks it could be a strategic move to improve Ray-Ban’s Meta smart glasses, something the VC likes a lot because it allows him to answer calls, respond to messages, take photos and videos, and ask Meta AI questions, all without taking out his phone and walking around the screen.

Larco says he thinks AI-based voice assistants are “just around the corner,” fueled by advanced technology and powerful computers.

“Some things are better with voice than screen,” he said. “And because sound is absorbed, we need a screen as a support.

Finding answers to his kids’ questions about the tallest building? It’s definitely a word. Pulling out her phone to type a question now feels “old fashioned,” Larco said.

“I think it’s going to be really interesting for manufacturers because they’re ultimately going to pick and choose what’s best for the application,” he said.