Watching the generative AI space shape up over the past few months has reaffirmed my belief that as product cycles mature, different types of builders have leverage at different points in the cycle. And, in this first stage in generative AI, technologists and product selectors will likely have the biggest impact on which companies emerge as winners.
Product technologists and designers typically hold power early in a product cycle as new capabilities and product patterns emerge and stabilize. Technologists and product selectors are kings at this stage because of the rapid feedback loop between new capabilities exposed by technology and new compositions of those capabilities delivered to customers by product selectors. This is too early for a purely GTM-oriented founder, as the underlying technology and product patterns have yet to stabilize; Word of mouth is the main driver of customer adoption. This corresponds to what Carlota Pérez would call (in Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages) the “installation phase” of a new technology, when exuberance drives the rapid installation and adoption of new technologies, led by markers and technologists.
Later, as product patterns become commoditized and the goal is to maximize market share for products that already work, marketing-oriented founders have the upper hand. That’s why GTM-oriented founders dominate markets like SaaS: the underlying triggers have stabilized and hardened, and there’s a lot of competition (it’s crowded), so the battle turns from a feature war to a game of GTM execution. Finally, as marketing patterns and best practices stabilize and markets consolidate around a few winners, business development and corporate development leaders (in start-ups and operators) gain influence.
These two cycles (directed by marketing and business development) correspond to the “deployment” phase outlined by Pérez, where new technologies are widely deployed in industry and society, offering benefits more widely than in the installation phase ·lation
Learning from other fast growing markets
Of course, the frenetic pace of development within the generative AI space is not new. These same dynamics (at the same rate) were also played out in the early days of the Facebook Developer Platform and the iPhone App Store. During this time, in 2008, we were building Social Deck and quickly grew to over a million users within a month of launch. We achieved this by inventing and leveraging new capabilities on mobile, such as SMS notifications and an address book for social graphs, and also by inventing new product patterns (there were no real-time multiplayer or social apps on mobile back then). At the time, knowing how to “build for mobile” was a competitive advantage that only a small number of technical and product-oriented founders understood, and I came to believe from this experience that having differentiated technology and products is what all big companies built.
However, when we started our second mobile company, Snowball, in 2014, we found that many of the same efforts fell flat. We invented new capabilities (intercepting and routing notifications) and introduced new product patterns (extending the home screen and notification feed to Android), but none of these were enough to drive innovative product growth. Upon reflection, I realized that in 2014 the mobile product and platform surface had largely stabilized, and there was neither the speed nor the importance of changing capabilities to unlock product-led growth. What was needed at that time was experience in GTM and distribution, which is why product-led companies like ours and Cover were overtaken by our distribution-oriented competitors.
Generative AI is in the installation phase
We’re seeing the first phases of this cycle play out in GenAI – the underlying technology capabilities change weekly, and so engineers and technologists are at a huge advantage. They can evolve product patterns and improve value and customer experience on a weekly basis. In recent weeks, for example, we’ve seen the introduction of multimodal input and web browsing to ChatGPT, and the introduction of the ChatGPT plugin architecture, which broke the assumption that the right third-party integration point to the OpenAI ecosystem was for wrapping products around its API. If a founder can’t quickly adapt to these changes, they won’t be able to keep up with the market.
Relatedly, new product patterns are often completely different from existing product patterns, but this is not always obvious early in the cycle. This can make it appear as if incumbents have an advantage over startups. For example, we are seeing large language models (LLMs) embedded in email, spreadsheets, documents, and other knowledge worker artifacts; however, we have not yet asked whether these artifacts make sense in a world of widely deployed LLMs. Why does a GPT model write an email for Alice only so that another GPT model can summarize that email for Bob?
(For more on product design for generative AI, read my article below probabilistic products.)
Now is the time for programmers and product designers in generative AI
If there’s a lesson to be learned here, it’s that founders need to carefully assess what stage a market is in and think about how it matches their superpowers. In generative AI, where application architecture is unstable and likely to change as platforms and underlying capabilities evolve rapidly, it’s the perfect time to be technical/product-oriented founders who can quickly redesign their experiences to incorporate the newest features of the platform. and product patterns.
Furthermore, this market is likely to be dominated by these types of founders for longer than most, because the surface of the GenAI platform is being uncovered more than designed (ie platform features are emergent, unlike something like the iOS API which is built into a fixed wa).y). Because we still don’t fully understand what these platforms are capable of, any attempt to codify ideal use cases and user behaviors is very likely premature.
All this means: if you’re a programmer or product designer, now is the perfect time to build. What are you waiting for?!
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The success of any tech company is dependent on a founder’s ability to recognize opportunities, and then create solutions to capitalize on these opportunities. At Ikaroa, we believe that founders must be able to align their unique superpowers with the need of the product cycle. The product cycle refers to the cycle of product research, development, testing and marketing, and all stakeholders must understand the steps and opportunities associated with each phase.
In order to be successful, founders should be able to look at the big picture and identify the skills necessary for each stage of the product cycle. For example, during the research phase, a founder should be able to analyze customer needs and create solutions that meet customer needs. During the development phase, a founder will need technical knowledge and experience to design and build a product. During the testing phase, a founder should be able to evaluate a product’s performance and find ways to improve the product. Finally during the marketing phase, a founder will need marketing skills to promote the product to customers.
At Ikaroa, we understand that the success of any product hinges on the ability of a founder to effectively use their superpowers and use them to their advantage in the product cycle. Therefore, we believe that a founder should be able to consider the product cycle holistically and be mindful of their strengths and weaknesses while creating solutions. Additionally, our team provides the technical and marketing know-how to identify the needs of customers and to address these needs in the most effective way.
By aligning a founder’s superpowers and product cycles, companies can ensure that they are creating products that address customer needs and are able to reach their goals in the most efficient and effective way. At Ikaroa, our team has the experience, dedication and creativity to help founders do just that. We provide a comprehensive suite of services to support the full product cycle, ensuring that businesses develop meaningful and profitable solutions.
