Disruptive Interfaces & The Rise of Luxury Software

The battle for brand agents and ultimately platform-level agents to become the default, and a new era of luxury software is upon us.

Edition #18 of Implications.

• This edition explores implications around: (1) disruptive interfaces with the rise of brand and platform agents, (2) the rise of luxury software, and (3) some surprises at the end, as always.

• If you’re new, here’s the rundown on what to expect. This ~monthly analysis is written for founders + investors I work with, colleagues, and a select group of subscribers. I aim for quality, density, and provocation vs. frequency and trendiness. We don’t cover news; we explore the implications of what’s happening. My goal is to ignite discussion, socialize edges that may someday become the center, and help all of us connect dots.

• If you missed recent editions of Implications, check out the latest here. A few highlights include heretical Hollywood possibilities, the era of abstraction, and navigating attention-driving algorithms. OK, now let’s dive in…

Disruptive Interfaces in the Age of AI & Modern First-Mile Experiences

The digital world is like a global game of “slap a hand” where a hand over a hand over a hand happens (in the form of interfaces) in rapid succession until the hand on top wins, only to be beaten by the new hand slapped upon it. The ultimate interface that “wins” will be the fastest, simplest, and most native to our biology. It will know us and always meet us where we are. There will be no more “on-boardings” or learning curves. But what will this ultimate interface to rule them all actually be? Will it be an ambient agent that anticipates our every move and whispers in our ear? Will it sit directly upon our retinas? Will it be integrated directly into our brains? Technology ultimately thrives when it meets us where we are and brings us where we want to be. Let’s review the ongoing battle to be the default interface of our work and lives, and consider the implications.

• “The devil’s in the defaults.” I often recite this famous quip by my friend and fellow product obsessive Dave Morin. It’s probably the most important insight in crafting product experiences. Back in 2018, I wrote about a new battle brewing to be the default of every choice we make: “As modern interfaces like voice remove options, augmented reality overlays our physical world, and artificial intelligence gains our trust by transcending our own reasoning, defaults will rule the world.” For those of you who have worked with me, you’ll know that I’ve been obsessed with interface wars for over a decade. In 2014, I shared some thoughts on how “the interface layer” would commoditize much of the technology underneath. At the time, I explained, “it’s not just about great design, it’s about the integration of the actions that make life easier and the commoditization of the services underneath…a shift in the economy that is driven by designers rather than cable executives, tech titans, and logistics masterminds. The disruptive interface is a “closed” user experience built on top of a wide open and hotly competitive ecosystem of services.”

• Disruptive interfaces , as I have come to call them, are a generation of drastically simpler and more accessible interfaces that ultimately commoditize everything underneath. Even powerful companies that have invested millions or billions in their brands, achieved dominance through network effects, or compete with sophisticated supply chains are vulnerable to losing their pricing power, differentiation, and being all-together excluded from the default interfaces of the future where customers make decisions. Web apps, followed by aggregators, followed by mobile apps were successive disruptive interfaces for many consumer businesses. What’s next?

• GenerativeAI-enabled platform-level Agents are the ultimate disruptive interface. In my January “8 Forecasts & Implications for the Years Ahead” edition of Implications, I shared my view that “locally run OS-native AI models change our everyday lives, and win consumer AI.” But this vision has evolved quite a bit. Let’s imagine how this may all play out…

  • Brand agents come first. The first phase of these disruptive interfaces will emerge at the brand level, where you will be welcomed (perhaps by name!) by digital agents on every brand website you visit. Whether it is Nike or Delta or Whole Foods, you’ll have a dedicated and increasingly personalized agent experience. It will answer questions, perform actions on your behalf, and make recommendations based on what it knows about you. These agents will need to be connected to the customer data profiles that every company manages for their customers. No surprise, I believe companies like Adobe that already power digital experience management are well positioned. One giant remaining question is around personalization, and how every company will deliver a hyper-personalized experience rather than be limited to the information a specific company knows about a specific customer.

  • Platform level agents will emerge that surf the web and negotiate with brand agents on our behalf, and seek to disrupt the cacophony of agents that don’t know us with one that does. The only thing better than many agents is one agent we know and trust. Personally, I want a highly personalized agent that knows everything about me, without compromising my privacy. I want my agent to sync with every data source in my life, but live “locally” (on my device, without adding any privacy risk to the equation). In such a world, this agent will tell me what to buy and where to buy it with the greatest and most objective quality and price comparison engine imaginable. My AI agent will block every spammy text for me, will sort through my email and deliver a daily briefing synthesizing everything it knows I care about, and will help me make decisions better than any person could. It will truly know me. For this world to happen, the LLM’s-powering such capabilities will need to live on my device and be fully enriched and interconnected to everything else on my device. Once this happens, I suspect LLMs in the cloud will serve a different and higher order purpose than answering random questions and conducting the glorified internet search. The LLMs running locally on our phones will be fine-tuned to our own desires and be 10x better for everyday consumer needs.

  • The reality of platform-level agents is getting closer, and the use cases are getting clearer. If you’re paying attention to research papers emerging from Apple’s fast-paced LLM catch-up efforts, you’ll notice that researchers developed ReALM — AI that enables Siri to understand what's on your screen, perhaps even better than GPT-4 ever could. ReALM apparently turns whatever’s on your screen into a payload of highly descriptive text that helps Siri understand whatever you’re looking at - across any app you’re using - so you can get highly personalized assistance across multiple different apps and contexts. The major implication here is that, if the “winning” AI is the AI that has the most context and user history, then OS-level app-transcendent AI is poised to outperform AI constrained within any single application.

  • What underlying AI platforms will power all of this? Many people (and the flows of venture capital hype) seem to assume that just a few massive LLM companies will win the consumer AI application game, much like Google Maps and a couple other map providers became the ultimate winners (and underlying APIs) for all location-based consumer applications that enhance our everyday lives. But it is increasingly clear to me that consumer AI will be all about personalization, trust and privacy, and cost efficiency. It is also increasingly clear that these models will become rapidly more capable, cheaper, and more efficient to the point of running locally for many of the everyday use cases that currently occur in the cloud.

• The exceptions will be agent experiences that are luxury or otherwise distinctive experiences for brands. There are times when you won’t want your hyper-personalized know-it-all agent to traverse the digital world on your behalf. Sometimes you’ll want serendipity and discovery. You’ll want to be engaged in a different way. After all, experiences that are special carry a premium to them. In the next section we will discuss the concept of “luxury software” which relates to this future world where we engage ourselves in digital experiences beyond games and entertainment not only for efficiency but also for the premium of joy.

The Era of Luxury Software

I’m not sure what it is about culture and human tendencies, but we tend to crave scarcity, craft, and story in whatever categories become commoditized. Now that shoes are cheap and ubiquitous, we buy expensive shoes with brands that mean something to us. We frequent special restaurants with hard-to-secure reservations despite the prevalence of fast food. And we ascribe so much value to branded and scarce objects that entire empires like LVMH and Hermes among others have been built by carefully managing the dynamics of supply and demand for their finely crafted goods. But noticeably missing, beyond the shine of Apple’s devices, is a burgeoning industry of luxury software. While infinitely replicated bits are the ultimate commodity, software increasingly defines our identity these days. I anticipate an era of luxury software ahead of us that upgrades our work and life. Let’s discuss and explore:

• Software has long been considered either a complement to hardware, or something that solved a problem. Software developers generally seek to achieve the “minimum viable product” requirements before entering a market. But, in a world where software seems increasingly commoditized with a plethora of options across verticals (not to mention the ability to use AI to simply replicate software instantly), I see signs of “luxury software” emerging for the more discerning customer. This is an incredible business opportunity for software companies (or hardware companies that try to compete with their digital experiences, like auto and appliance makers) given the higher margins that luxury-anything commands. This is also an opportunity for consumers, like many of you readers, who want better digital experiences across your everyday digital life and wish to flex your taste or sophistication while you’re at it. Much like a consumer commodity like shoes creates a market for brands like Nike and Christian Louboutin, what might luxury software look like in our lives?

• Where will we see luxury software transform markets? Already, in the consumer productivity space, we’re starting to see “luxury” email clients, calendars, browsers, and search engines emerge. While all of these capabilities are freely accessible to consumers and rather commoditized, companies like Superhuman for email, Cron (now Notion) for calendars, Arc for web browsing, and Perplexity for search have emerged as higher-end alternatives that also carry some degree of status for their users. Since we’re discussing luxury goods, it is worth wondering what exactly is the subconscious social flex associated with these brands? Perhaps it is the users’ value for their own time? Perhaps it is a statement, much like using an Apple product, of the user’s value for aesthetics and superior digital experiences? Perhaps certain design elements of software are only revealed after a certain degree of use and accomplishment, thus becoming a vanity metric? I think the concept of luxury software will really hit us in the automobile industry, where cars are becoming a combination of batteries and screens. As this happens, the software experience will increasingly differentiate auto brands (and we are increasingly asked to upgrade our auto software to unlock self-driving capability among other features). Will ultra-luxury cars welcome you by name and have a digital experience that is highly tuned to your taste and preferences? Also, new consumer software companies have the opportunity to leverage playbooks from established brands that build things with atoms for the world of bits. Perhaps certain hints of color or use of exclusive typography will start to differentiate certain software experiences? Perhaps some software will become scarce? For example, how might the Supreme brand be applied to digital products? Perhaps you need to be at the right place (or URL) at the right time to get access to a product? Just because software can be distributed and scaled efficiently and infinitely doesn’t mean it has to be.

• In the world of luxury software, designers will shift from being “interface builders” to “software artists.” I like this framing shared by another reader of Implications, Valerie Tetu, when I was teasing this upcoming edition on the platform formally known as Twitter. Indeed, the luxury goods makers of software are user experience and interface designers. The degree of polish, innovation, constraints, and social flex that they apply to both the pixels as well as the interactions will differentiate luxury software from its commoditized competition and build a form of brand premium that customers will be increasingly willing to pay for. Yet again, the common theme across many Implications editions of designers playing an increasingly role for the next generation of digital companies emerges.

Highlights From Action Digest

Some of you may have read Making Ideas Happen, a book I wrote in 2010 focused on the best practices of creative leaders and teams. Or you may have used some of the Action Method paper products I designed with my friend and Behance co-founder Matias back in 2006 to help creative teams (especially us) get our act together! Well, a small team has assembled to reboot this research and products designed for action, and I am thoroughly enjoying these. A few highlights worth checking out:

• 🫡 The rogue notetaking method that launched an Academy-Award winning screenwriting career.

• 💣 A counter explosives expert teaches us why our greatest ideas have the highest odds of dying and how to save them. 

• 🥫 An unorthodox approach used to save a failing soup company teaches us how to harness the most underrated ingredient for achieving tough goals.

• 📝 Two evidence-based notetaking systems that are precision engineered to enhance learning and creativity.

• 🤔 Explore the bizarre work habits of an award-winning mathematician to see why working less and saying no to self-control might unlock your best work. 

Ideas, Missives & Mentions

Finally, here’s a set of ideas and worthwhile mentions (and stuff I want to keep out of web-scraper reach) intended for those I work with (free for founders in my portfolio, Adobe folks…ping me!) and a smaller group of subscribers. We’ll cover a few things that caught my eye and have stayed on my mind (including the new Beyonce album, our over-emphasis on models, and data provocations on debt, bundles, and dopamine), as well as areas of interest as an angel investor. Subscriptions go toward organizations I support including educational initiatives at the Museum of Modern Art. Thanks again for following along, and to those who have reached out with ideas and feedback.