The Great AI Unbundling

🌈 Abstract

The article discusses the history and significance of the spreadsheet software, particularly Microsoft Excel, and how it has paved the way for the rise of the B2B SaaS (Software as a Service) industry. It also draws parallels between the ubiquity and versatility of Excel and the current emergence of AI chatbots like ChatGPT, Claude, and Gemini, suggesting that they will similarly spawn a new era of startups.

🙋 Q&A

[01] The defining software product of the last several decades

1. What was the defining software product of the last several decades? The defining software product of the last several decades was the spreadsheet, particularly Microsoft Excel.

2. How did spreadsheets, starting with VisiCalc, transform how professionals did their jobs? Spreadsheets, starting with VisiCalc, transformed how professionals did their jobs by becoming an essential tool that people bought computers just to use. In the 1980s, companies fought a full-on battle for spreadsheet dominance, with products like IBM's Lotus-1-2-3 and Microsoft's Excel gaining ground.

3. How did the release of Windows 3.0 in the 1990s impact Excel's dominance? The release of Windows 3.0 in the 1990s led to Excel becoming the dominant spreadsheet program, and it has remained so since then.

[02] Excel's accessibility and power

1. What makes Excel a good product for beginners? Excel is a good product for beginners because it's easy to get started, as all you have to do is start typing in a cell.

2. What makes Excel a great product for expert users? Excel is a great product for expert users because it is incredibly powerful, allowing them to do everything from complex financial modeling to data analysis and visualization to building video games.

3. What was Excel originally designed for, and how has its versatility made it a ubiquitous, general-purpose tool? Excel was originally designed for business users working in finance and accounting roles, but its versatility has made it a ubiquitous, general-purpose tool used across various industries and workflows.

[03] Excel's role in the rise of B2B SaaS

1. How has Excel been "unbundled" into other apps over the last 15 years? Over the last 15 years, Excel has been unbundled into a host of other apps, such as Asana, Looker, and QuickBooks, as it became ubiquitous enough for users to know they wanted purpose-made alternatives for specific workflows.

2. What was necessary for this unbundling to happen? For the unbundling of Excel to happen, it needed widespread adoption with power users who began using it for niche workflows that it wasn't originally designed to support.

3. How did the development of purpose-built tools for these workflows lead to the growth of the B2B SaaS market? As power users realized that parts of their workflows were inefficient or lacked necessary features, the need for purpose-built tools emerged, creating the opportunity for the B2B SaaS market to develop into a $327 billion market.

[04] The rise of AI chatbots and their impact

1. How do AI chatbots like ChatGPT, Claude, and Gemini compare to Excel in terms of accessibility and power? Like Excel, AI chatbots like ChatGPT, Claude, and Gemini have a blend of accessibility and power, and they are also trending toward the same level of general-purpose ubiquity, but in far less time.

2. What are the "atomic units" of AI-based software that users are becoming familiar with? The "atomic units" of AI-based software that users are becoming familiar with include prompting, context windows, few-shot learning, and multi-modality.

3. How can the use of AI chatbots lead to the development of new startups? As users develop workflows and opinions on how those workflows could be better, easier, cheaper, faster, and more secure, it creates opportunities to unbundle those workflows into separate, purpose-built apps, leading to the development of new startups.

[05] The rise of "AI wrappers"

1. What is the perception of "AI wrappers," and how does the article argue against this perception? The term "AI wrapper" has been used pejoratively, implying that no one will use a purpose-built AI tool when they can use a chatbot like ChatGPT or Claude for the same result. However, the article argues that the opposite is true - ChatGPT and Claude increase the demand for wrappers as people use them to find use cases that a general-purpose tool isn't designed to accommodate.

2. How can ChatGPT and Claude be used to find startup ideas? The article suggests that if you're using ChatGPT or Claude repeatedly and the outputs are impressive, there's a chance it could be its own app, making ChatGPT and Claude great places to find startup ideas.