OpenAI will replace a lot of software we use today. But I think there is a kind of apps that will will actually benefit from it: Luxury software. We've got things like fancy cars, designer clothes, and big houses. Luxury software? Not so much. But I think that's about to change.
The perfect example might be Superhuman. I believe what makes Superhuman special is not just how quickly you can go through your inbox. When you use Superhuman, it feels like you're using digital equivalent of a Porsche. There's a delight in every detail. You can feel the considerate design choices. The 'Sent from Superhuman' signature’ is also a flex.
Let’s look at another example. Rize is a fairly expensive automatic time-tracker. It targets people who want to get the most out of every waking hour. They've got a big community of 4,000 on Discord. You know the crazier part? It’s made by just two people!
RIZE is a perfect example of luxury software. It makes your routine tasks fun via gamification, provides you with beautiful charts you can share for signaling, and tracks your time automatically with AI – all making it feel high-end. I see a lot of my friends in startups sharing their RIZE charts on social media. Watching them do that got me to try RIZE, and now I'm subscribed too.Most of the major tech players view these products as mere toys.
Tools like Rize have a relatively small market. And they lack moats that attract investors, like unique technology or network effects.Yet I think this is where small teams should focus on. Most people aren't trying to build the next unicorn. They just want to make money doing what they love.
But why are we seeing luxury software become a viable business model now?
I believe it’s GPTs.
YouTube made dramatically cheaper to distribute videos to millions of people. Nowadays, people making videos just focus on creating awesome content, and YouTube takes care of the rest. This big change in how videos get out there has made a lot of content creators pretty wealthy.
A similar thing is happening to product development. GPTs are lowering the cost of building products by probably over 90%. This lets product makers target niche audience and still create a profitable business.
More people will also want luxury software. A lot of solo entrepreneurs and small teams are now hitting tens of thousands of monthly revenues. In the physical world, people buy fancier cars when they make more money. So, as we start to see more software millionaires, I bet they'll spend more on fancy software too.
I would love to know how other members in the community think about this trend!
No.
I don't think luxury software will or even can be a thing.
Software has vanishing marginal costs of replication.
Therefore, mass adoption of a consumer app will make way more revenue than high price low volume apps (b2b is a different story because of the ticket sizes).
But this means, mass market companies can afford better designers and better engineers and ultimately create the better product. That is why there will be no luxury software. If you pay more for a product, you want a better product. Otherwise the flex does not work and just makes you look dumb.
Additionally, most of the time, you also interact with software either alone (no one to flex to) or the other users are part of the value (a luxury instagram with no one to like your post does not make sense)
RIZE is pretty standard consumer saas pricing.
Superhuman only works because there is a subset of e-mail power users with requirements (i.e. shortcuts) that the mass market explicitly does not want (they want a clickable ui). So they found a niche with a higher willingness to pay. With the hefty pricetag, you could argue it's luxury software, but my guess is, it's mostly sales people and enterprise customers. And then we talk a b2b not a luxury use case. And it's in a similar ballpark as Figma, Adobe and other b2b saas.
In the end the market dynamics of software (such as in media) inhibit the emergence of luxury software.
The only "luxury" apps I can see are such where low adoption of select people are part of the value prop. E.g. Elite Dating Apps. But here, The community rather than the software is the product.
Thanks for sharing this. It was a really insightful read and helped clear up a lot for me.
‘With the hefty pricetag, you could argue it's luxury software, but my guess is, it's mostly sales people and enterprise customers. And then we talk a b2b not a luxury use case. And it's in a similar ballpark as Figma, Adobe and other b2b saas.
From what I've seen among my startup circles in S.Korea, Superhuman is pretty popular among the C-level executives. Superhuman has been testing a new 'Superhuman for Sales' feature. It looks like Superhuman is just starting to target the sales people and enterprise customers.
Can confirm. I’m a founder and operator of an agency but have a lot of projects where I have multiple emails, lots of filtering to set up, and I’m a power user (ie hotkeys are my life). Superhuman is amazing. I’ve got my partners using it and our sales director. As soon as it’s more cost friendly I’d like to upgrade a lot of others to the platform.
For what it’s worth, I turn off the Sent with Superhuman. But god damn do I love it.