Products are out, brains are in
As software production costs approach zero, the value proposition of software will shift from functionality to the quality of decision-making behind it. Enterprises and smaller companies alike will prioritize trusted vendors capable of sound judgment and foresight over self-built solutions. Decision quality, rather than the software itself, will become the key differentiator in a commoditized market.
- ▪The marginal cost of software production is trending toward zero, challenging traditional pricing models.
- ▪Enterprises will favor software providers they trust to avoid liability and ensure long-term reliability, similar to how investors choose fund managers.
- ▪Decision quality at scale is becoming a critical, non-fungible asset in business, as execution becomes automated but judgment remains human.
- ▪Historical data can support adequate decisions, but the best decisions in uncertain environments require real-time judgment and contextual understanding.
- ▪In competitive scenarios, outcomes will be determined by the cumulative impact of high-quality small decisions made by teams using superior mental models.
Opening excerpt (first ~120 words) tap to expand
Products are out, brains are in 15 May, 2026 Often, something that should be free is expensive. Ex: bottled water, pre-washed lettuce, filing your taxes, and a bunch more stuff. Soon, software may become one of those things. The question is: as the marginal cost of software production trends toward zero and the number of capable tools in any given category multiplies, does software still command the prices it does today? Or does the cost of software just freefall? My guess is no to both. The cost probably goes down, but it doesn't death spiral. Instead, the primary reason people buy software will change. Rather than buying it because they can't build it themselves, they may buy it because they don't want to build it or they don't have the time to spin it up or maintain it.
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