Our Consumer Internet Thesis: Why We Still Believe in Social at Scale

Five years ago, when we closed our $180M Seed Round and formally launched Oroai Ventures, the bet we were making was not primarily a financial bet. It was a thesis — a belief about how the world works and how it will continue to work. The thesis was this: consumer social technology is among the most important and economically valuable activities in modern human civilization, and the companies that build the platforms mediating those activities will be among the most consequential companies in the world. Five years later, I want to revisit that thesis — to examine what has held up, what has required refinement, and why I am more convinced today than I was in 2019 that the opportunity we identified then is still largely ahead of us.

The Original Thesis

When we launched Oroai Ventures, the core of our investment thesis had three parts. First, that the human need for social connection is fundamental, universal, and therefore generates commercial opportunities that are more durable than those created by convenience or novelty. People use social platforms not primarily because they are useful or entertaining — though they are often both — but because they address a deep human need that will not diminish or disappear as technology evolves. This durability makes the consumer social category different from most consumer technology categories, where products are competing against changing preferences and evolving convenience standards.

Second, that social technology was not yet mature — that the platforms that had achieved scale by 2019 had solved only some of the problems in consumer social, and had in many cases solved them poorly or created new problems in the process of solving old ones. The first generation of social platforms built for the world of desktop computing and early smartphones. The second generation built for a world of ubiquitous mobile computing and algorithmic content distribution. The third generation — the one we were positioning Oroai to invest in — would build for a world of digital-native users with sophisticated media literacy, distributed identity, and fundamentally different expectations about privacy, authenticity, and commercial relationships.

Third, that the seed stage was the right entry point for capturing the value created by this third generation of social platforms, because the network effects that determined long-term winners in consumer social compounded from the very beginning and were largely determined before companies reached the growth stage where most institutional capital was focused.

What Has Held Up

All three parts of the original thesis have held up, and in some respects they have held up more strongly than I anticipated when we first articulated them. The durability of the human need for social connection has been demonstrated beyond any reasonable doubt by the past five years. The pandemic stress-tested the consumer social category more intensely than any prior event, forcing billions of people to suddenly conduct the majority of their social lives through digital platforms, and the platforms that understood the genuine human needs underlying social behavior proved far more resilient than the platforms that had merely captured habitual engagement. People needed genuine connection and found ways to create it through social technology; they did not merely pass time on social platforms because there was nothing else to do.

The immaturity of the category has also proved to be a durable truth rather than a transitional observation. The problems we identified in 2019 — the degradation of mental health associated with specific platform design patterns, the manipulation of information ecosystems by algorithmically optimized content, the economic extractiveness of platforms that captured massive value while providing minimal economic benefit to the users and creators who generated that value — have not been solved by the existing platforms. They have, if anything, become more acute, which means the opportunity for new platforms that solve these problems in their fundamental architecture is now larger, not smaller, than it was when we launched.

The importance of seed-stage entry has been confirmed by the investment history of our first five years. Our most significant return opportunities are concentrated in our earliest investments — companies that we backed before their products existed in mature form, before their network effects were established, and before the metrics that would later make them obviously attractive were visible. In every case, the opportunity to invest at a price that reflected the actual upside of the investment was available only at the seed stage. By the time the companies' trajectories were clear, the valuations had already moved to levels that priced out exceptional returns.

Where the Thesis Has Evolved

The most significant evolution in our thinking since 2019 concerns the speed of change in the consumer social landscape. We knew the category would evolve quickly — that was one of our reasons for focusing on seed investing, where new platform paradigms emerge most visibly. But the pace at which behavioral norms have shifted, at which new product paradigms have emerged and matured, and at which the competitive dynamics of social platforms have changed has exceeded what we anticipated.

The short-form video format, for example, went from a niche product experiment to a category-defining consumer behavior in a time period that was shorter than most investors had predicted. The rise of audio social as a distinct category happened faster than expected. The migration of younger users from public feeds toward private and semi-private communication contexts accelerated significantly during the pandemic and has not reversed in the years since. Each of these shifts has required us to update our views on where the most important opportunities in consumer social are located.

We have also refined our thinking on the relationship between consumer social and adjacent categories. When we launched, we defined our investment mandate narrowly around products where social connection was the primary value proposition. We have since broadened that definition to include products where social mechanics are a critical layer on top of a different primary value proposition — social commerce, creator tools with community features, consumer health with social accountability mechanisms, local services with trust-based social discovery. In each of these cases, the social layer is what creates the durable competitive advantage, even though it is not the only value the product provides.

The Investment Horizon

Looking at the current landscape through the lens of our thesis, the investment opportunities we find most compelling are concentrated in several areas. The first is platforms serving communities of users with strong shared context — professional communities, interest-based communities, local communities — where the social mechanics can be optimized around specific shared needs rather than designed for general human audiences. The specificity of these communities makes them harder to build but more durable once established, and the monetization opportunities within focused communities are substantially better than in general-purpose social platforms.

The second area is creator infrastructure — tools that help the growing population of professional and semi-professional creators build sustainable businesses from their audiences. We believe the creator economy is in its second act, moving from platforms that simply enable content distribution to tools that enable genuine creator business development. The companies building the business intelligence, financial services, community management, and direct monetization infrastructure for creators are building in a space where demand is large, growing, and not well served by the current generation of tools.

The third area is private and semi-private social communication — the category we have described in other writing as the messaging renaissance. The migration of social behavior from public feeds to private contexts creates product and infrastructure opportunities that are largely independent of the incumbent public social platforms. Companies building excellent products for small-group communication, interest-based private communities, and ambient social presence are working in a space where the existing infrastructure is inadequate and the behavioral demand is proven.

Key Takeaways

• Oroai's founding thesis — that consumer social creates durable, fundamental value rooted in human social need — has been confirmed by five years of market evidence.
• The problems that motivated the thesis (extractive platform economics, degraded user wellbeing, authenticity deficits) remain unsolved and the opportunity to solve them is larger than in 2019.
• The most important thesis evolution: broadening the definition of "social" to include products where social mechanics create competitive advantage but are not the sole value proposition.
• The highest-conviction investment areas today: focused community platforms, creator business infrastructure, and private/semi-private communication.
• Seed-stage entry remains the only stage at which exceptional returns in consumer social are consistently accessible.

Conclusion

Five years ago, we bet on a thesis. We bet that consumer social technology was fundamental, that it was immature, and that the seed stage was the right place to invest in its next generation. Everything we have observed in the intervening five years has reinforced that thesis rather than challenged it. The opportunity we identified in 2019 is still largely ahead of us, which means the most important investments in consumer social are still to be made. We are as motivated and as focused today as we were when we started. The next five years will be even more consequential than the last five, and we intend to be at the center of them.