Character.AI recently shifted gears by introducing ‘Stories’ designed for kids, stepping away from its open-ended chat feature. This change isn’t just about adapting to industry demands, it also reflects a commitment to creating a safer, more structured space for the next generation to engage with AI. As someone who has been bootstrapping startups with a strong community focus, this story caught my attention for its blend of tech innovation and social responsibility.
Let’s examine this strategic pivot through the lens of entrepreneurship and lessons we can take to our own ventures.
What Are ‘Stories’ and Why Do They Matter?
Character.AI's 'Stories' are guided, interactive narratives that feature characters users know and love. Instead of chats that could wander unpredictably, these narratives offer a controlled environment in which kids make choices that shape the adventure’s outcome. This format draws inspiration from interactive fiction, which has recently seen a surge in popularity.
Safety emerged as a prime motivator for this decision. Open-ended chats for minors had faced backlash for their emotional intensity, and even lawsuits tied to mental health issues, including tragic incidents. The pivot to curated, age-appropriate storytelling represents a measured response to rising concerns about long-term AI interaction risks.
Lessons to Learn for Entrepreneurs in Europe
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Know Your Audience Inside Out.
Character.AI’s move signals an understanding that teens need structure rather than open-ended unpredictability. If you're building consumer-facing products, tailoring features around the safety and developmental needs of specific groups, not just the latest trend, can be your startup’s edge. -
Compliance Is Not Optional.
California now regulates AI companions for minors, with similar bills underway in the U.S. and Europe. Entrepreneurs in emerging tech sectors need to anticipate regional regulatory trends. Understanding where laws are headed can shape products before compliance becomes mandatory. -
Reputation Counts.
Once trust breaks, especially in industries concerning minors, recovery could take years. Character.AI chose to take short-term user losses rather than risking a long-term reputational hit, a decision every founder should consider when balancing risks. -
Pivot the Right Way.
Dropping features that seemed central to your product (in this case, chatbots) could be daunting. But if safety, legal risks, or the market environment demands it, embrace nimble thinking and focus on a version of your product that aligns better with today's needs.
What Entrepreneurs Can Take From This
First, if you’re engaging directly with customers, embed safety deep into your product design, not as an afterthought. Whether you’re addressing privacy for an app or creating inclusive educational tools, show you're proactive in protecting users.
Next, consider how guided experiences appeal to younger audiences and parents alike. Think “structured but creative.” For example, if you’re building a product similar to Fe/male Switch, the next generation of startup founders might find value in narratives that guide them through complex concepts like team-building or idea validation. Borrow that structure yet create space for independent learning.
And finally, don’t forget partnerships. Regulatory shifts, growing demand for safer AI, and a commitment to age-specific features mean partnerships between startups, regulators, and industry bodies could multiply impact and credibility.
How to Build a Startup With Impact and Structure
Here’s how you can take inspiration from Character.AI’s pivot:
Step 1: Identify Early Risks
Assess all legal or emotional risks surrounding your product. Implement safeguards before scaling. Begin this process through basic research or by consulting legal advisors.
Step 2: Design Structured Experiences
Even free platforms like Miro or Canva give you templates to map out user journeys. Use these to sketch how customers interact with your product. For younger users, build supportive narratives around their interaction.
Step 3: Make Ethics Part of Your Brand
Instead of scrambling to add safety features later, bake them into the product. Highlight them during branding. Think of this as your “trust factor,” especially when entering competitive industries like AI or EdTech.
Step 4: Prioritize Community Engagement
Create an environment where your customers feel safe engaging responsibly. Platforms like Slack or Discord can be adapted for moderated forums, encouraging positive community behavior.
Common Pitfalls to Avoid
- Ignoring Customer Feedback. Kids, parents, and guardians will give your best beta feedback. If they request more safeguards or simpler interfaces, act immediately.
- Reacting Too Late. Laws and standards for AI are developing fast, especially in Europe. Position your compliance 12 months ahead of deadlines, not weeks.
- Prioritizing Revenue Over Values. Startups grow best when founders take bold, ethical steps even at the cost of potential sales loss, exactly what Character.AI demonstrates.
Key Stats on Safety and Tech:
- Interactive fiction gains: Recent analysis in June 2024 saw global interactive storytelling apps grow by 31% year-on-year, as teens veer toward goal-based narratives over unrestricted platform usage.
- Regulations in Europe: France and Germany are already testing frameworks that mirror California rules on AI companions for minors. If adopted, expect implementation within Q2 2025.
Character.AI’s shift isn’t just about protecting minors, it tells every entrepreneur that creating impact-driven startups demands agility and careful strategy. Whether you're building something as complex as an AI-driven platform or expanding in deeptech sectors like CADChain, the message is clear: structure, safety, and values win over unchecked growth.
Start small if you need, let your community mold your early designs, and don’t underestimate Europe’s appetite for responsible innovation. Change will come fast, prepare even faster.
FAQ
1. What change did Character.AI recently make to its platform for kids?
Character.AI replaced open-ended chat with interactive ‘Stories’ for users under 18, offering guided narratives featuring familiar characters. This shift ensures a safer, more structured environment. Read more about the ‘Stories’ feature
2. Why did Character.AI decide to discontinue open-ended chats for minors?
The company faced backlash and legal action due to safety concerns and mental health risks tied to open-ended AI interactions, including potential emotional harm and addiction issues. Learn why Character.AI made this change
3. What type of experiences do the new ‘Stories’ offer?
‘Stories’ feature choose-your-own-adventure format where teenagers make decisions to shape narratives, creating structured yet creative digital experiences. Explore how ‘Stories’ work
4. What prompted this shift from open-ended chat to guided storytelling?
Character.AI prioritized user safety after evidence emerged linking unrestricted chatbots to emotional risks and concerns about addiction, particularly for minors. Learn why safety influenced this pivot
5. How does this change align with current regulations?
California has recently regulated AI companions for minors, and similar legislative proposals are being introduced federally. Character.AI aims to anticipate compliance with these laws. Read about California's regulation
6. Did Character.AI anticipate user backlash from teens?
Yes, they expected user churn but took the decision to pivot confidently, prioritizing long-term trust and safety over short-term platform loss. See Character.AI’s position on backlash
7. How does the interactive fiction trend impact Character.AI’s decision?
Interactive storytelling apps are gaining popularity globally, with a year-on-year growth of 31%, making it a timely shift for the company to explore structured formats. Discover insights on interactive fiction trends
8. Can minors still access other features on Character.AI?
Yes, kids can still explore multimodal AI features, like AvatarFX and community feeds, alongside engaging with ‘Stories’. Learn about other features
9. How has the shift benefited teens according to feedback?
Some teenagers appreciate breaking free from AI dependence, hoping structured experiences like ‘Stories’ will be safer and less addictive. Read teen reactions
10. What can entrepreneurs learn from Character.AI’s approach?
Entrepreneurs should embed safety into product designs early, anticipate regulatory trends, and emphasize values even above revenue to build long-term credibility. Learn lessons from Character.AI’s pivot
About the Author
Violetta Bonenkamp, also known as MeanCEO, is an experienced startup founder with an impressive educational background including an MBA and four other higher education degrees. She has over 20 years of work experience across multiple countries, including 5 years as a solopreneur and serial entrepreneur. Throughout her startup experience she has applied for multiple startup grants at the EU level, in the Netherlands and Malta, and her startups received quite a few of those. She’s been living, studying and working in many countries around the globe and her extensive multicultural experience has influenced her immensely.
Violetta Bonenkamp's expertise in CAD sector, IP protection and blockchain
Violetta Bonenkamp is recognized as a multidisciplinary expert with significant achievements in the CAD sector, intellectual property (IP) protection, and blockchain technology.
CAD Sector:
- Violetta is the CEO and co-founder of CADChain, a deep tech startup focused on developing IP management software specifically for CAD (Computer-Aided Design) data. CADChain addresses the lack of industry standards for CAD data protection and sharing, using innovative technology to secure and manage design data.
- She has led the company since its inception in 2018, overseeing R&D, PR, and business development, and driving the creation of products for platforms such as Autodesk Inventor, Blender, and SolidWorks.
- Her leadership has been instrumental in scaling CADChain from a small team to a significant player in the deeptech space, with a diverse, international team.
IP Protection:
- Violetta has built deep expertise in intellectual property, combining academic training with practical startup experience. She has taken specialized courses in IP from institutions like WIPO and the EU IPO.
- She is known for sharing actionable strategies for startup IP protection, leveraging both legal and technological approaches, and has published guides and content on this topic for the entrepreneurial community.
- Her work at CADChain directly addresses the need for robust IP protection in the engineering and design industries, integrating cybersecurity and compliance measures to safeguard digital assets.
Blockchain:
- Violetta’s entry into the blockchain sector began with the founding of CADChain, which uses blockchain as a core technology for securing and managing CAD data.
- She holds several certifications in blockchain and has participated in major hackathons and policy forums, such as the OECD Global Blockchain Policy Forum.
- Her expertise extends to applying blockchain for IP management, ensuring data integrity, traceability, and secure sharing in the CAD industry.
Violetta is a true multiple specialist who has built expertise in Linguistics, Education, Business Management, Blockchain, Entrepreneurship, Intellectual Property, Game Design, AI, SEO, Digital Marketing, cyber security and zero code automations. Her extensive educational journey includes a Master of Arts in Linguistics and Education, an Advanced Master in Linguistics from Belgium (2006-2007), an MBA from Blekinge Institute of Technology in Sweden (2006-2008), and an Erasmus Mundus joint program European Master of Higher Education from universities in Norway, Finland, and Portugal (2009).
She is the founder of Fe/male Switch, a startup game that encourages women to enter STEM fields, and also leads CADChain, and multiple other projects like the Directory of 1,000 Startup Cities with a proprietary MeanCEO Index that ranks cities for female entrepreneurs. Violetta created the "gamepreneurship" methodology, which forms the scientific basis of her startup game. She also builds a lot of SEO tools for startups. Her achievements include being named one of the top 100 women in Europe by EU Startups in 2022 and being nominated for Impact Person of the year at the Dutch Blockchain Week. She is an author with Sifted and a speaker at different Universities. Recently she published a book on Startup Idea Validation the right way: from zero to first customers and beyond, launched a Directory of 1,500+ websites for startups to list themselves in order to gain traction and build backlinks and is building MELA AI to help local restaurants in Malta get more visibility online.
For the past several years Violetta has been living between the Netherlands and Malta, while also regularly traveling to different destinations around the globe, usually due to her entrepreneurial activities. This has led her to start writing about different locations and amenities from the POV of an entrepreneur. Here’s her recent article about the best hotels in Italy to work from.
About the Publication
Fe/male Switch is an innovative startup platform designed to empower women entrepreneurs through an immersive, game-like experience. Founded in 2020 during the pandemic "without any funding and without any code," this non-profit initiative has evolved into a comprehensive educational tool for aspiring female entrepreneurs.The platform was co-founded by Violetta Shishkina-Bonenkamp, who serves as CEO and one of the lead authors of the Startup News branch.
Mission and Purpose
Fe/male Switch Foundation was created to address the gender gap in the tech and entrepreneurship space. The platform aims to skill-up future female tech leaders and empower them to create resilient and innovative tech startups through what they call "gamepreneurship". By putting players in a virtual startup village where they must survive and thrive, the startup game allows women to test their entrepreneurial abilities without financial risk.
Key Features
The platform offers a unique blend of news, resources,learning, networking, and practical application within a supportive, female-focused environment:
- Skill Lab: Micro-modules covering essential startup skills
- Virtual Startup Building: Create or join startups and tackle real-world challenges
- AI Co-founder (PlayPal): Guides users through the startup process
- SANDBOX: A testing environment for idea validation before launch
- Wellness Integration: Virtual activities to balance work and self-care
- Marketplace: Buy or sell expert sessions and tutorials
Impact and Growth
Since its inception, Fe/male Switch has shown impressive growth:
- 5,000+ female entrepreneurs in the community
- 100+ startup tools built
- 5,000+ pieces of articles and news written
- 1,000 unique business ideas for women created
Partnerships
Fe/male Switch has formed strategic partnerships to enhance its offerings. In January 2022, it teamed up with global website builder Tilda to provide free access to website building tools and mentorship services for Fe/male Switch participants.
Recognition
Fe/male Switch has received media attention for its innovative approach to closing the gender gap in tech entrepreneurship. The platform has been featured in various publications highlighting its unique "play to learn and earn" model.
