Omakase software

I was talking with a VC the other day about the middle falling out. I realized that it kind of needed a formal definition, if not for my own uses.

Defining ‘the middle falling out’

My assertion right now is that there are going to be 2 types of business that truly thrive in the age of AI:

1. The mega-platforms
2. Niche builders

I’ll take this polarizing perspective for the purposes of this article.¹

The mega-platforms

These are companies like Cloudflare, Amazon, Databricks, Shopify or etsy. They all of these companies fit this mold..²

Fundamentally, they provide raw materials that users can leverage.

They provide raw materials to niche builders.

Niche builders

Niche builders are those that are connected to end users that don’t want tools, necessarily, they want solutions.

An example company here is a niche seller on etsy that sells sweaters for kittens. She’s found a micro-niche that serves a small community that is deeply passionate about sweaters for kittens.

A less charicatured alternative is that I, as an individual, can build an application on lovable to serve as my family’s chore chart for my children where as in the previous generation of software, I might have bought a SaaS for this (or never built it at all.)

Opportunity for taste-making

The conversation with the VC was around the topic of whether or not this polarity is actually the future or not. I posited that there’s an argument against the opportunity for taste-making.

They asserted that I was wrong. That people don’t always know what they want and they lean on people to ‘taste make’.

A couple of days ago I came across the following.

omakase software

in a world where anyone can build anything, most won’t. if previous consumer behaviour tells us anything, it’s that we value convenience and and others’ taste way more than we think. even in systems designed for flexibility like notion, people buy templates

to be able to make anything is too much choice, which is its own kind of friction. most of us don’t want infinite freedom, we want a strong opinion to follow³

It’s the same conversation.

So I dug a little deeper.

What’s the definition of omakase?

omakase

(in a Japanese restaurant) a meal consisting of dishes selected by the chef

We’re entering a world where the chef’s choice is going to be guiding user experience.⁴

the greater trend

This is a trend that won’t stop.

The more I think about it, we’re going to enter this era where the tastemaking and omakase is going to continue. People aren’t going to build solely for themselves.

the challenge

With that being said, I think that makes for real challenges for businesses that want to be big, but can’t get there because they get squeezed by the platforms. There’s going to be a real tussle over value extraction. I feel confident that there are opportunities for tastemakers and that will continue. The real challenge is do sub-platforms consistently seize the opportunity or do they get squeezed out?⁵

Databricks, in my mind, has show that they can be on top of the platforms and succeed in that competitive dynamic, but does that generalize consistently for many companies are is that just catching lightning in a bottle.