An investor's professional use of a product can be a "canary in the coal mine." For instance, if a small, agile company switches from Adobe's creative suite, it serves as an early indicator that larger, slower-moving enterprises might eventually follow suit.
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Dropbox's shrinking revenue illustrates a key strategic risk. Despite being an iconic product, it became a feature within larger ecosystems like Google Workspace and Microsoft Office. Its failure to expand into a defensible, multi-product platform (e.g., failed Mailbox and Carousel acquisitions) led to its current stagnation.
While other AI models may be more powerful, Adobe's Firefly offers a crucial advantage: legal safety. It's trained only on licensed data, protecting enterprise clients like Hollywood studios from costly copyright violations. This makes it the most commercially viable option for high-stakes professional work.
Dr. Fei-Fei Li states she won't hire any software engineer who doesn't embrace AI collaborative tools. This isn't about the tools' perfection, but what their adoption signals: a candidate's open-mindedness, ability to grow with new toolkits, and potential to "superpower" their own work.
By publicizing its internal AI-powered tools for sales, finance, and support, OpenAI signaled its ambition to enter the enterprise application market, directly challenging SaaS incumbents and causing HubSpot's stock to fall.
For product categories where AI can easily replicate the core technology (like online file converters or headshot generators), defensibility shifts away from tech. The business becomes a pure play on marketing, distribution, and brand, much like succeeding with a new brand of canned water.
Unlike Kodak, which protected its film business and went bankrupt, Adobe integrated generative AI (Firefly) directly into its core products. By embracing the technology that threatened it, Adobe established itself as a leader in AI-powered creativity and saw its stock surge.
In industries dominated by legacy players for decades, buyers lose the 'muscle' to evaluate new vendors. If you see low initial pull despite a strong value proposition, it may mean you need to educate the market on how to buy again, not that your product is wrong.
Despite narratives of being an "AI loser," Adobe's fundamentals are strong. Its earnings per share have compounded at 18% annually since 2019, while its valuation multiple has shrunk by 14% per year. This divergence between performance and sentiment suggests a significant investment opportunity.
Enterprise buyers purchase tools like Slack because employees love using them, not based on clear ROI. This presents a major adoption hurdle for non-viral, single-player products like enterprise search, which must find creative ways to generate widespread user adoption and love.
