Episode summary
Why a $1M Startup Wasn’t Worth Building in the Age of AI
The a16z Show
· · 1 hr 2 min · Hosts: Alex Rampell · Guests: Jean-Denis Greze
Summary
Jean-Denis Greze explains why he shut down a tax startup that was already working: the business had nearly $1M in first-year revenue and could have reached $2.5M to $3M, but he concluded it would not become venture scale in an AI world. His key argument is that incumbents could use the same automation faster than a new entrant could win market share, especially in tax, where customers only buy once a year and word of mouth is weak.
He pivoted into Town, an AI assistant that works from email and calendar, because that market has more frequent usage, more room for product-led growth, and more opportunities to expand into broader workflows. Jean-Denis says Town is not just an assistant, but a “token allocation machine” that finds repetitive, low-cost automations for users, from meeting prep to analyzing restaurant supplier prices.
The episode also argues that AI products will increasingly look less like fixed apps and more like adaptive software built around the user. Jean-Denis says Town competes with OpenAI and Anthropic by staying model-neutral, preserving customer ownership of context and data, and avoiding the rigid, human-heavy forward-deployed engineer model as models get better.
Key takeaways
- Jean-Denis Greze says the SMB tax business was real and growing, but not venture scale because tax is sold once a year and incumbents could copy the AI automation faster.
- He argues Town wins by focusing on email and calendar workflows where usage is frequent, the product can spread through direct user value, and the market is broader than tax.
- Greze says Town is model-neutral, using whichever supplier is best in the moment, because customers do not know which frontier model will lead over the next three to five years.
- He believes the forward-deployed engineer model gets worse as models improve, while Town’s automation layer gets better and more scalable.
- His restaurant example shows the pitch: a routine can cost about a dollar a month and still uncover hundreds or thousands of dollars in savings when it matters.
- Greze says the bigger long-term market is helping businesses use AI more effectively, not just coding, because that is where most company workflows live.
Notable quotes
“this was not going to be a venture scale company”
“You have to think about it's it's your advantage if you're a new entrance is you're faster moving”
“Humans are slow routers”
“I think of our of our product as a token allocation machine”
How the episode opens
I get pinged by Ben Horowitz about like I found this amazing tool. It's called Town. It like changed my life.
I was like wait that's John Denise company but he does SMB tax. That doesn't make any sense. This was not going to be a venture scale company.
No one had built great AI around these very common knowledge worker workflows like meetings, meeting prep, getting people to be prepared for their day. We're trying to build a product that works with people to find more and more opportunities for them to deploy AI to be better at their job. It's going to cost you like a dollar a month to run that thing.
But the interesting thing is the one month out of a year where it finds something. It's going to find like hundreds if not thousands of dollars for you. The product experience can't just be a text box.
You have to just show the value prop to someone and do it for them. We will use whatever supplier we think is the best for you in the moment.
Humans are slow routers. — That's right. And I think the future looks like a lot less human in the loop than we see today. And I think our job is to — Hi everyone. I'm Alex Rampel, partner here at Andre Horowitz and I'm here with Jean Deni, the CEO and founder of Town.
Thanks for having me. — So what I find cool is that we worked together when you were the CTO of Plaid and I had led our investment in Plaid here. — Yes. — And I heard you were leaving and going to start a company. And then I remember you told me you're working on an SMB tax tool.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai startup strategy
- venture scale vs profitability
- killing working products
- ai tokens and agents
- future of shopping and ads
Companies and tickers mentioned
- AMZN
- Plaid
- Town
- OpenAI
- Anthropic
- Amazon
Watch the episode
Watch “Why a $1M Startup Wasn’t Worth Building in the Age of AI” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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The a16z Show, this episode and its artwork belong to Andreessen Horowitz. Octagon is not affiliated with the show; this page is an independent summary.
