Here are 11 things that will not change much in a software business when truly transformative AI superpowers are unleashed.
These laws of nature have existed for many years, well before we agreed on their names and usefulness.
1) PMF – product market fit – When you deliver amazing value to a subset of your potential market, you create efficient growth based on happy customers spreading the word.
2) ICP – ideal customer profile – Most folks in your market won’t want to buy your product, some buy and are crappy customers, others buy and are great customers who stay and pay and tell their friends.
3) Positioning – the human requirement to understand what kind of thing you or your product is and categorize it simply. It’s hard to scale things we can’t describe or are many things to many people.
4) Differentiation – Which one are you? How are you different from my alternatives? This still needs to happen.
5) Problems, Pains, Benefits – There are many ways to describe this, but our painful problems cause us to reach for the benefits that we really want. Why else would we buy and pay?
6) The 80/20 rule – aka the Pareto Principle. Each thing we do or buy doesn’t have the same impact. Some things will always create far more impact than most other things. It’s the 90/10 Rule now and could go higher.
7) Profit – actual cash left over at some point after all your expenses. There are many ways to describe profit (EBIDTA, etc.), but in the end, all software companies will need to make money at some point.
8) Moats – The key to long-run profit is defending the higher value of what your products against cheaper alternatives or other ways to make you irrelevant.
9) LTV and CAC – regardless of your business model, to have a real business, your total customer lifetime value needs to exceed your cost of acquiring a customer by enough to fund your business and your profit.
10) Brands – This will more important in the future as there is an explosion of products and messages (yet again) and we search for ways to connect to the companies, products, people (founders) and what they mean to us.
11) User experience—How humans interact with your product will still matter, including how we choose, buy, get started, use, get the result, and engage with the company. This will change, but it will still matter.
Everything else can change – user interfaces, pricing, business models, automation, personalization, scale, speed, integration, buying methods and more.
But some laws of nature can’t be defied in the future.
