As AI makes it easy to generate 'good enough' software, a functional product is no longer a moat. The new advantage is creating an experience so delightful that users prefer it over a custom-built alternative. This makes design the primary driver of value, setting premium software apart from the infinitely generated.

Simply offering the latest model is no longer a competitive advantage. True value is created in the system built around the model—the system prompts, tools, and overall scaffolding. This 'harness' is what optimizes a model's performance for specific tasks and delivers a superior user experience.

As foundational AI models become more accessible, the key to winning the market is shifting from having the most advanced model to creating the best user experience. This "age of productization" means skilled product managers who can effectively package AI capabilities are becoming as crucial as the researchers themselves.

Instead of simply adding AI features, treat your AI as the product's most important user. Your unique data, content, and existing functionalities are "superpowers" that differentiate your AI from generic models, creating a durable competitive advantage. This leverages proprietary assets.

A truly "AI-native" product isn't one with AI features tacked on. Its core user experience originates from an AI interaction, like a natural language prompt that generates a structured output. The product is fundamentally built around the capabilities of the underlying models, making AI the primary value driver.

The novelty of new AI model capabilities is wearing off for consumers. The next competitive frontier is not about marginal gains in model performance but about creating superior products. The consensus is that current models are "good enough" for most applications, making product differentiation key.

Frame your product's value not around the underlying AI, but around the premium insight it unlocks. The key is to instantly provide an answer—like a valuation or diagnosis—that previously required significant time, money, or human expertise.

With nearly every public B2B company now featuring AI, the novelty has worn off. 'AI washing' by adding a simple co-pilot is no longer a differentiator. To succeed, companies must use AI to create genuinely disruptive products that solve problems in ways that were previously impossible.

Instead of focusing on AI features, understand the two mental shifts it creates for customers. It either offers a superior method for an existing, tedious task ("a better way") or it makes a previously unattainable goal achievable ("now possible"). Your product must align with one of these two thoughts.