The internet ruined customer service. AI could save it.

Every customer deserves a concierge

America | Tech | Opinion | Culture | Charts

In 1750 BC, a merchant named Nanni sat down in the ancient city of Ur and dictated the world’s first known customer complaint. Inscribed in cuneiform on a clay tablet the size of a human palm—a tablet that’s now held in the British Museum—Nanni unleashed his fury on a merchant named Ea-nasir, who had promised fine quality copper ingots and instead delivered “ingots which were not good.” “What do you take me for,” Nanni wrote, “that you treat somebody like me with such contempt?”

Nearly four thousand years later, Nanni’s feeling is universal. Everyone reading this has been Nanni at one point or another. You, reader, have been on hold for 45 minutes waiting to talk to a human who can solve your problem. You’ve been transferred to another department. You’ve screamed “representative” into an automated phone tree. You’ve rage-typed into an unintelligent chatbot that isn’t programmed to know what you’re angry about. The medium might have changed, from clay tablets to phone trees to ticket queues, but the emotion is ancient and unaltered: what do you take me for, that you treat somebody like me with such contempt?

And here’s the strange thing—as businesses have gotten better at everything else, customer experience has gotten worse. That’s one of the great ironies of the internet age. The internet helped commerce scale infinitely: one-click purchasing, next-day delivery, oceans of choices for practically any consumer good. But it made the experience of being a customer a lot worse. The more customers a business services, the less attention any individual customer gets: because while logistics can scale exponentially, devoted customer attention—real attention, to make sure you’re happy with the experience—can only scale linearly. That is to say, with the number of humans that the business employs.

For any business that sells goods online, the inevitable fact is that customer service is a cost center to be minimized, not a relationship to be deepened. Each customer becomes a ticket number, a case ID, a position in an endless queue. This isn’t because businesses today care less than businesses did 100 years ago or 4,000 years ago. It’s simply because devoted attention doesn’t scale.

Until now.

Your product won’t sell itself

AI’s Oppenheimer Moment

There are two types of consumer businesses

You can think of there being two types of consumer businesses.

The first type is what we’ll call the scale business. That’s where the internet lives. That’s Amazon, Uber, Airbnb, your airline, your telecom, your bank. These are the businesses that serve tens or hundreds of millions of people every year. They’re simply extraordinary at logistics, price, selection, and convenience: and above all, they understand the art of scale.

But the sheer volume that they have to manage means that each individual customer relationship is thin. That’s a mathematical necessity; it’s just how it has to be when you’re dealing with unimaginable numbers of people. You get IVR phone trees, ticket queues, decision-tree chatbots. And the result is that however much people might need or enjoy the services that these companies provide, they hate the customer service that they receive—to the point that “dealing with customer service” is a near-universal signifier for “an annoying burden that I have to put up with.” And that makes sense: each day the equivalent of at least 366 human lifetimes are wasted just having to deal with the headache of being a customer. About a quarter of Americans say they’d rather shave their head than deal with customer service.

But for a certain small slice of people, there’s another type of consumer business. We can call it the concierge business. This is your Hermès, your Porsche, your luxury hotel, your executive physical, your Global Services hotline. And this type of business is organized around the figure of the concierge—a person who knows you, remembers your preferences, and anticipates your needs. “You liked the Bordeaux the last time; perhaps you’ll enjoy this Touriga Nacional?”

The concierge is the highest form of customer experience ever devised: ambient, proactive, personalized, continuous. It’s not episodic in the way that “customer service” is for the masses. You don’t only talk to the concierge when something goes wrong and you’re upset. The relationship is ongoing. You feel less like a harried customer and more like an old-school aristocrat waited on by a cast of servants.

And that feeling of distinction is a big part of the appeal. The concierge experience isn’t just functionally better, but socially better too. It signals that you are not part of the unwashed masses, navigating a phone tree. You exist in a separate, more civilized world, where someone knows your name and your preferences and treats your time as valuable. That sense of exclusivity is something luxury brands cultivate very intentionally: the concierge doesn’t just serve you well, it makes you feel different.

The difference between the concierge business and the scale business, by the way, isn’t a moral one. Bernard Arnault cares as much about making money as Jeff Bezos. The difference is just about ARPU. A dedicated, high-quality concierge costs real money—humans are expensive, of course, but they’re especially expensive when you account for the costs of training and institutional memory. At different ARPUs, “customer service” takes on an entirely different function for a business. For a scale business with a low ARPU, customer service is just a cost center; for a luxury business, customer service is everything.

Hermès can afford to give you a concierge, because you’re one of a relatively small number of people who are able to spend five or six figures a year there, and because the “personal touch” is at the core of what Hermès provides. Delta and Verizon can’t make the same call. So the rich get the concierge; normal people get the phone tree. That’s the basic deal for the consumers of scale businesses: you get the scale pricing, but you lose the intimacy. And that essential tradeoff has governed consumer business for decades.

But something fundamental is changing.

What happens when attention is free?

There’s a conventional narrative about what AI will do to customer service, and it goes something like this: AI will replace human customer service agents; companies will save money; headcount will go down. And I think that in the broad strokes this narrative is true. The portfolio company that’s at the heart of this shift is Decagon, and we’re seeing that their agents are able to successfully resolve a huge amount of customer inquiries, resulting in higher customer satisfaction and significant reduction in costs. Customer service agents can now focus on the most important problems. In the aggregate, this usually means that Decagon’s customers, massive scale companies like Delta or Hertz, can economize on customer service spend while creating a concierge-like experience.

But I think that the conventional narrative stops before getting to the really interesting second-order effects. And the second-order effects are where it gets really interesting.

Throughout economic history, we see a really reliable pattern play out. Alex Danco identifies it correctly as the Jevons paradox. When the cost of something drops dramatically, if demand for that good is sufficiently elastic, then we don’t just consume the same amount of that thing and pocket the savings. We consume vastly more of it.

And I think people are underrating the enormous amount of latent demand for “really, really good customer service”—for concierge-level service—in our scale-dominated economy. I think that every consumer of a scale business knows what I’m talking about. We want to be treated like people, not like case IDs.

Before, this just wasn’t possible in a scale business, for the reasons I mentioned. Everyone knows that better customer experience drives retention, increases lifetime value, and builds brand loyalty. Delta and Verizon don’t want to make you hate them. But they just can’t afford to provide excellent customer service at scale. The bottleneck is high-quality attention. You just can’t hire enough people, train them well enough, give them enough context, and keep them engaged with every customer until they’re as happy as can be. For any business without an absurdly high ARPU, the economics just don’t work.

But AI collapses the cost of high-quality attention. When you have hyperintelligent AI that is ultra-cheap, always on, and can run infinite parallel instances—each with a full memory of the customer’s history, preferences, and context—then the entire logic of customer engagement flips in an instant. The question is no longer “can we afford to pay attention to this customer?” It’s “what becomes possible when the marginal cost of a customer interaction approaches zero?”

The answer, I believe, is that every business becomes a concierge business. When attention becomes abundant, customer experience undergoes a fundamental transformation.

Think about what a great concierge does. They don’t wait for you to come to them with a problem; they notice that your payment didn’t go through and reach before you get frustrated. They don’t interact with you at moments of maximum tension; your relationship with them is ambient, ongoing, an integral part of the texture of your customer experience. And, above all else, they know you: they know your history, your preferences, your communication style, that you hate shellfish and prefer window seating and had a bad experience in Bermuda last year.

AI will make all of this possible at scale for every customer at every business. The “customer service” relationship stops being episodic, reactive, and generic, and becomes continuous, proactive, and deeply personalized.

That is the concierge model. And it’s what’s going to define the future of essentially every scale business.

And here’s what might be the most underrated part of this shift: when the concierge knows you and is always on, the distinction between “support” and “commerce” dissolves. A great concierge at Hermès isn’t just a fancy customer support rep; he’s a salesman in disguise. They know your taste so well that their recommendations feel not like a sales pitch but like a favor. That’s the model that AI could unlock for every business. Customer service, done well, has always been a revenue opportunity hiding in plain sight; but until now the costs of hiring a capable human have made it feasible only for high-ARPU businesses in the luxury sector. Now AI can make it available for every business. At the limit, “customer service” and “commerce” meld into the same thing.

I don’t think that all of this is going to manifest magically in the next month or the next year. But I think it’s clear that this is where the relationship between businesses and customers is going. It’s not just “better customer support reps,” but a different category of experience entirely.

The Decagon bet

And that’s why I’m so excited about Decagon.

We first invested in Decagon at inception, when Jesse Zhang and Ashwin Sreenivas—two repeat founders who, in a nice bit of serendipity, met at a ski retreat organized by a16z—set out to build something that went beyond the first-generation AI chatbot. From the earliest days, what stood out about Jesse and Ashwin was that they weren’t just thinking about deflecting tickets, or replacing the marginal customer service rep, or trading quality for slightly better margins. They were thinking about what the business-customer relationship should look like in a world where high-quality attention is practically free.

In the time since, Decagon has rapidly become a leading conversational AI platform for enterprise customer experience. They’ve grown from zero to powering concierge customer experiences for more than a hundred major consumer-facing enterprise customers—from Avis and Hertz to Block’s Cash App, Mercado Libre, and Oura Health. Customers are seeing deflection rates above 80 percent, meaning that the vast majority of interactions are handled without any human intervention. And, crucially, customer satisfaction scores are going up. When Chime deployed Decagon’s AI agents, they reported a greater than 60 percent reduction in contact-center operating costs and a doubled Net Promoter Score, the universal metric for customer satisfaction and loyalty.

That last detail matters enormously. The conventional fear about AI in customer service is that automation means a worse experience, that you’re trading quality for efficiency. But Decagon is showing the opposite. AI can actually deliver a much better experience than the legacy model, because they combine instant availability with deep contextual knowledge and near-infinite high-quality attention.

But the reason I’m really excited about Decagon isn’t just “better chatbots” or “better customer service reps.” The really interesting stuff, the really high-value stuff, comes from everything after the initial use case. Because Jesse and Ashwin aren’t talking about “cheaper customer service”: they’re talking about infinite, hypercapable, and hyperintelligent concierges for every customer at every business. They’re talking about a future where businesses can combine the massive scale of Amazon with the ultra-attentive concierge service of Hermès.

If the Decagon bet works—and the early evidence is very encouraging—then the AI concierge doesn’t just sit inside the customer service org like it has in the past. It becomes the primary interface between a business and its customers, in the same way that the concierge is the primary interface for existing concierge businesses in the luxury economy. That’s a much larger market than “customer service automation.” That’s the relationship layer for all of commerce.

Here’s how I’m thinking about the magnitude of what’s happening. In the 1990s and 2000s, email “replaced” physical mail. But because the cost of sending an email was zero and it arrived instantly, email didn’t just do what physical mail did but much cheaper. It assumed a totally different role in people’s lives. It created use cases that were inconceivable in the era of stamps and envelopes. The volume of correspondence exploded, and the nature of correspondence changed.

The same thing is happening right now with customer attention. If you think AI is just going to “replace” the call center agent, you’re stuck thinking about first-order effects. AI is going to create an entirely new category of customer relationship that was previously impossible, just like how email created an entirely new category of communication. When you can pay near-infinite attention to every single customer, every business becomes a concierge business. The concierge—that type of intimate, proactive, and personalized experience that is today an exclusive property of the luxury economy—becomes the default for all commerce.

Nanni, in 1750 BC, had to carve his complaint into clay and send it across Mesopotamia, hoping that Ea-nasir might eventually read it and feel shame. In 2026 AD, we’re still basically doing the same thing: firing our complaints into the void and hoping someone on the other end might care. But after four thousand long years of customer pain and frustration, I think that AI is finally bringing that era to a close. The future of commerce is concierge.

Why the World Still Runs on SAP

Charts of the Week: Monitoring the Situation in Hormuz

This newsletter is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. Furthermore, this content is not investment advice, nor is it intended for use by any investors or prospective investors in any a16z funds. This newsletter may link to other websites or contain other information obtained from third-party sources - a16z has not independently verified nor makes any representations about the current or enduring accuracy of such information. If this content includes third-party advertisements, a16z has not reviewed such advertisements and does not endorse any advertising content or related companies contained therein. Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by a16z; visit https://a16z.com/investment-list/ for a full list of investments. Other important information can be found at a16z.com/disclosures. You’re receiving this newsletter since you opted in earlier; if you would like to opt out of future newsletters you may unsubscribe immediately.