The Return of Analog: Why Gary Vee Thinks AI Makes Real-World Businesses More Valuable

Gary Vaynerchuk has made a career out of saying things that sound contrarian until they become obvious. In the early 2010s, he told brands to take social media seriously when most Fortune 500 CMOs thought Twitter was a fad. In 2017, he was preaching about voice search and smart speakers while the marketing world was obsessed with chatbots. His track record isn't perfect — he's been early on plenty of trends that fizzled — but his hit rate on macro shifts is unusually high.

So when Gary Vee appeared on TBPN and laid out a thesis that runs directly counter to the dominant tech narrative, it's worth paying attention. His argument, distilled to its essence: AI makes digital content infinite and free, which means scarcity — and therefore value — shifts to the physical world. The more capable AI becomes at generating text, images, video, code, and music, the more valuable real-world experiences, physical products, and in-person interactions become.

It's a thesis that challenges the assumption at the heart of most tech investing: that the future is purely digital. And it has profound implications for founders, investors, and anyone deciding what to build next.

The Core Argument: When Digital Becomes Infinite, Physical Becomes Scarce

The logic of Gary Vee's thesis follows a simple economic principle: value is a function of scarcity. Things that are abundant are cheap. Things that are scarce are expensive. AI is making digital content abundant at a speed and scale that the economy hasn't absorbed yet.

The Digital Content Explosion

Consider what AI can now generate at near-zero marginal cost:

• Text. Blog posts, marketing copy, emails, reports, social media posts, scripts, product descriptions — all can be generated in seconds. The cost of producing written content has collapsed by 90% or more.
• Images. Photography, illustrations, product mockups, social media graphics, advertising creative — all can be generated from text descriptions. The stock photography industry is in structural decline.
• Video. While still early, AI video generation is rapidly approaching usability. Within 1-2 years, generating short-form video content will be as easy as generating images is today.
• Music and audio. AI-generated music, podcasts, voice cloning, and sound effects are already being used in production contexts.
• Code. AI coding assistants can generate functional software, reducing the cost and time required to build digital products.

When all of these digital outputs become effectively infinite and free, what happens to their value? It crashes. Not to zero — quality, curation, and brand still matter — but dramatically downward. A blog post that cost $500 to commission now costs $5 to generate. An advertising image that cost $2,000 to produce now costs $0.20. A product mockup that took a photographer a day now takes an AI 30 seconds.

The Scarcity Shift

As digital content becomes abundant, scarcity migrates to things that AI cannot generate: physical experiences, human presence, material objects, geographic specificity, sensory richness, and temporal uniqueness. You can't AI-generate a meal at a great restaurant. You can't prompt-engineer the feeling of a live concert. You can't generate a sunset over the Pacific viewed from a specific beach at a specific moment.

Gary Vee's argument is that this scarcity shift will create a revaluation of physical businesses. The experience economy — restaurants, events, fitness, retail, entertainment, hospitality — doesn't just survive the AI revolution. It becomes more valuable precisely because everything else becomes less scarce.

The Experience Economy Gets Supercharged

The experience economy is a concept that's been around since Joseph Pine and James Gilmore wrote about it in 1998. Their thesis: as goods and services become commoditized, consumers increasingly value experiences — memorable, personal, engaging encounters that create emotional connections. The coffee isn't just coffee; it's the Starbucks experience. The concert isn't just music; it's the shared energy of 50,000 people.

AI supercharges this dynamic by commoditizing the digital layer even further.

The $500 Dinner Experience

High-end dining has been one of the fastest-growing segments of the food industry, and Gary Vee argues this acceleration will continue. When AI can generate unlimited digital entertainment, the premium people place on a remarkable meal in a beautiful space with attentive human service increases. It's not just about the food — it's about the irreducibility of the experience. You can't download it. You can't generate it. You have to be there.

The numbers support this. The fine dining market grew 12% in 2025, compared to 3% for casual dining. Omakase-style restaurants — where the chef curates a personal, multi-course experience — have waiting lists measured in months. Chef's table concepts, where diners interact directly with the kitchen, command premium pricing that continues to increase.

Boutique Fitness and Wellness

AI can generate personalized workout plans, nutrition advice, and meditation guides. It cannot replicate the energy of a packed cycling class, the accountability of a personal trainer who knows your name, or the community of a climbing gym where regulars know each other. Boutique fitness concepts — SoulCycle, Barry's, F45, and thousands of independent studios — continue to thrive because they sell something AI can't generate: physical presence, community belonging, and embodied experience.

The boutique fitness market has grown at a 7% compound annual rate even as AI-powered home fitness platforms have proliferated. The reason is clear: the digital alternatives (Peloton, Apple Fitness+, AI personal trainers) are good at delivering workouts. They're bad at delivering community, social motivation, and physical space — which, it turns out, are the things most people actually want from fitness.

Pop-Up Retail and Experiential Commerce

Traditional retail continues to struggle against e-commerce. But experiential retail — stores that are destinations rather than distribution points — is growing. Pop-up shops, brand experience centers, and concept stores that offer immersive brand encounters are attracting both consumers and investors.

The thesis: when you can buy anything online instantly, the reason to go to a physical store changes from acquisition to experience. Stores become places where you discover, interact, and connect with brands and products in ways that a website cannot replicate. Nike's flagship stores, Apple's town squares, and countless independent retailers are investing in experiences that justify physical presence.

This applies to merchandise and brand expression too. When digital content is infinite, physical objects that represent your identity and affiliations become more meaningful, not less. A TBPN hoodie you wear to a tech meetup is a physical signal of community membership that no digital alternative can replace.

Live Entertainment and Events

The live entertainment industry is booming, and Gary Vee argues this is directly related to the digital abundance AI creates. Concert revenues hit record highs in 2025, driven by both premium pricing and expanded capacity. Sports attendance is strong. Comedy shows sell out instantly. Music festivals attract larger crowds each year.

The common thread: live events offer something that AI-generated content fundamentally cannot — temporal uniqueness and shared human experience. You had to be there. No two shows are identical. The energy of a crowd is irreducible to digital formats. And as people spend more time consuming AI-generated digital content, they crave the authenticity and impermanence of live experiences more, not less.

Why VCs Are Quietly Investing in "Boring" Physical Businesses

Something surprising is happening in venture capital. After two decades of near-exclusive focus on software and digital platforms, a growing number of prominent VCs are investing in physical-world businesses. The investments don't make TechCrunch headlines, but they're significant in both size and strategic intent.

The Investment Thesis

The logic follows directly from the scarcity argument:

1. Software margins are compressing. AI makes it cheaper to build software, which means more competition, which means lower margins. The "software is eating the world" era created enormous value, but that value is being redistributed as AI commoditizes software development itself.
2. Physical businesses have natural moats. A great restaurant in a prime location, a beloved fitness studio, a well-located event venue — these businesses have geographic defensibility that software businesses don't. You can't disrupt a neighborhood bakery with an AI startup.
3. Consumer spending is shifting. Younger consumers consistently report that they value experiences over things, and AI is accelerating this preference by making digital "things" (content, media, entertainment) essentially free.
4. Technology improves physical business economics. The irony: AI makes physical businesses more efficient (AI-powered inventory management, scheduling, marketing) while simultaneously making them more valuable (by increasing the scarcity premium of physical experiences).

Examples of the Trend

• Multi-unit restaurant groups are attracting growth equity and venture capital at higher multiples than in previous years. Investors recognize that strong restaurant brands with loyal customer bases have durability that software startups often lack.
• Community fitness concepts are raising Series A and B rounds from traditional tech VCs. The combination of recurring revenue, strong unit economics, and community-driven retention makes these businesses attractive to investors familiar with SaaS metrics.
• Local media and events companies are finding investors who see opportunity in the hyper-local, physically-grounded media that national digital platforms can't replicate.
• Specialty food and beverage brands that emphasize craftsmanship, provenance, and physical retail presence are attracting investors who see premium physical goods as benefiting from the digital abundance dynamic.

Counter-Arguments and Limitations

The "return of analog" thesis is compelling, but it's not without significant counter-arguments and limitations.

Physical Businesses Have Real Constraints

The reason VCs historically avoided physical businesses is that they're hard to scale. A software company can serve 10 million users with the same code that serves 10. A restaurant that serves 200 people needs an entirely new location to serve 400. Physical businesses are capital-intensive, labor-intensive, and geographically constrained in ways that software businesses simply are not.

This means that even if the thesis is correct — even if physical businesses become more valuable — they may not be venture-scale opportunities. The best restaurant in the world is still one restaurant. The returns profile of physical businesses is often better suited to private equity or traditional small business financing than venture capital.

The "Experience Premium" Has Limits

Not everyone can afford $500 dinners and boutique fitness memberships. The experience economy, at its current price points, is primarily a upper-middle-class and affluent phenomenon. If AI's primary effect on the economy is to eliminate middle-class jobs while increasing the value of luxury experiences, the social implications are concerning. The thesis works for premium businesses. It's less clear what it means for the broader economy.

AI Could Eventually Create Physical Experiences

While AI can't currently replicate physical experiences, VR, AR, and robotics are advancing. A future where AI-driven virtual reality provides experiences that feel genuinely physical isn't impossible — it's just not imminent. If VR crosses a quality threshold where virtual experiences feel "real enough," the scarcity premium of physical experiences could diminish.

The "Boring Business" Risk

The "boring businesses are undervalued" thesis tends to attract investors who underestimate the operational complexity of physical businesses. Running a restaurant, managing a fitness studio, or operating event venues requires domain expertise that many tech investors lack. The history of tech money entering physical industries is mixed — sometimes transformative (Sweetgreen), sometimes disastrous (numerous ghost kitchen startups that failed).

What This Means for Founders Deciding What to Build

If you're a founder in 2026 trying to decide what to build, the return-of-analog thesis offers a useful framework — but not a simple answer.

The Framework

Ask yourself: is the value I'm creating reducible to digital content? If yes, AI is coming for your margins. If no — if your value proposition depends on physical presence, human connection, sensory experience, or geographic specificity — you have a natural moat that AI strengthens rather than erodes.

Hybrid Models Are the Sweet Spot

The most interesting opportunities may be hybrid models that combine physical experiences with AI-powered operations. A restaurant that uses AI for inventory optimization, demand forecasting, and personalized marketing — but delivers a fundamentally human, physical dining experience. A fitness studio that uses AI for member engagement, class scheduling, and progress tracking — but provides an in-person community that no app can replicate.

These hybrid businesses get the best of both worlds: the operational efficiency of AI and the scarcity premium of physical experiences. They're harder to build than pure software businesses, but they may be more durable and defensible in an AI-abundant world.

Don't Overthink the Binary

The "digital vs. physical" framing is useful as a mental model, but reality is messier. Some digital businesses will thrive despite AI abundance — particularly platforms, marketplaces, and distribution channels. Some physical businesses will fail despite the scarcity premium — particularly those with poor execution, wrong location, or insufficient capital. The thesis identifies a macro trend, not a guarantee.

What matters most is still what has always mattered: building something people genuinely want, executing well, and adapting to changing conditions. AI changes the competitive landscape, but it doesn't change the fundamentals of building a great business.

Whether you're building in the physical or digital world, the TBPN community is where founders go to sharpen their thinking. Show your affiliation with a TBPN sticker on your laptop — it's a physical signal in an increasingly digital world, which is kind of the whole point.

The TBPN Gary Vee Interview: Key Takeaways

Gary Vee's appearance on the Technology Brothers Podcast Network was one of the most-discussed episodes of 2026. Beyond the analog thesis, several other points resonated with the TBPN audience:

• On patience in business: "Everyone's trying to build the next billion-dollar AI startup. Sometimes the best move is buying a car wash and running it well for 20 years." This resonated with a tech audience tired of the unicorn-or-bust mentality.
• On content strategy in the AI era: "Volume is now free. Quality is still hard. But TASTE — knowing what's good — that's the real scarcity." Gary argued that AI eliminates the production bottleneck but increases the importance of editorial judgment.
• On community value: "The tech industry keeps trying to build 'community features' in apps. Real community happens in rooms, at events, in physical spaces where humans can smell each other." This connected directly to TBPN's own live show format and community events.
• On investing in "vibes": "The next decade's best investments will be in businesses that create a feeling you can't screenshot." This captures the essence of the analog thesis in a single, memorable sentence.

Frequently Asked Questions

Does the "return of analog" mean tech is less important?

No — it means tech's role is shifting. Technology, including AI, makes physical businesses more efficient through better operations, marketing, supply chain management, and customer engagement. The thesis isn't that technology becomes less important, but that the endpoint of value creation shifts from digital products consumed on screens to physical experiences enhanced by technology behind the scenes. The most valuable businesses will use AI extensively in their operations while delivering value through physical, human, and experiential channels.

Is this thesis relevant for all physical businesses, or just premium ones?

The thesis is strongest for premium and experience-focused physical businesses — fine dining, boutique fitness, live entertainment, specialty retail. For commodity physical businesses — basic fast food, budget retail, routine services — the dynamics are different. AI may actually increase competitive pressure on commodity physical businesses through automation, delivery optimization, and price comparison tools. The scarcity premium applies most strongly to physical experiences that are unique, memorable, and difficult to replicate.

How should founders apply this thesis when deciding what to build?

Start by asking whether your value proposition depends on things AI can generate (content, code, design, data analysis) or things it cannot (physical presence, human connection, sensory experience, geographic specificity). If your core value is AI-generable, expect margin compression and increasing competition. If your core value is physical and experiential, you may have a natural moat that strengthens as AI makes digital alternatives more abundant. The strongest position is a hybrid: physical experiences powered by AI-optimized operations.

What examples does Gary Vee cite of physical businesses that will become more valuable?

Gary Vee highlights several categories: high-end restaurants and dining experiences, community fitness studios, live entertainment and events, specialty retail with strong in-store experiences, and local media and community organizations. He also points to "boring" businesses like car washes, laundromats, and storage facilities as examples of physical businesses with durable demand, geographic moats, and operational simplicity. His key argument is that these businesses benefit from both the direct scarcity premium (physical experiences become more valued) and indirect technology benefits (AI improves their operations and marketing).