Back in 2011, Marc Andreessen wrote a widely cited blog post where he argued that "software is eating the world." In some ways, it feels like just yesterday that I first read it. But it has been 15 years, and boy, has the world changed. Now, the worry is that AI is eating software.

It has become significantly easier to write code, to the point that in the span of only two years, Google has gone from 0% of its new code being written by AI to now over 75% of it! But it's not just big companies. I know lots of non-technical people who wanted software that could do "X," and so they just vibe coded a solution. Done.

In fact, I've been experimenting and doing the same for several months now. It has become so easy that I feel an obligation to do it. But as we know, if everyone can do it, then it means there is no longer any value. The value will necessarily need to be created in other ways.

Earlier this week, we spoke about Uber and how being asset light — previously a hallmark of the gig economy — is potentially now a liability. Well, this is a broader theme. Josh Brown, CEO of Ritholtz Wealth Management, even coined a term for this: HALO. This stands for Heavy Assets, Low Obsolescence.

The general idea is that you now want physical stuff with a big moat that is immune to being disrupted by someone in their parents' basement using Claude Code. Hard assets are, arguably, where you want to be today. I guess that means real estate is back, baby!

Cover photo by Tim Mossholder on Unsplash

I was on a panel this week, put on by BILD, called "Design That Sells." The focus of the panel was on how innovative product design can help sell homes in the current market environment. When I was first asked to be on the panel, I thought to myself, "I'm not sure I'm qualified to talk about this right now. Market conditions, rather than design, are the challenge!"

Of course, focusing on your customers' needs, solving their problems, and innovating with great design is always going to be the way. I think we've consistently tried to do this with our projects, and so that's what I talked about.

But what the discussion also got me thinking about — though I didn't mention this during the panel — is the late Clayton Christensen's theory called "Jobs to Be Done." I've written about this before on the blog, specifically about his milkshake case study.

The key idea behind the theory is that customers "hire" products and services in order to complete specific "jobs" for them. The problem is, businesses sometimes don't actually know the job that people are hiring for! In the case of the milkshake case study, this ended up being the job:

"Most of them, it turned out, bought [the milkshake] to do a similar job," he writes. "They faced a long, boring commute and needed something to keep that extra hand busy and to make the commute more interesting. They weren't yet hungry, but knew that they'd be hungry by 10 a.m.; they wanted to consume something now that would stave off hunger until noon. And they faced constraints: They were in a hurry, they were wearing work clothes, and they had (at most) one free hand."

This is why people were buying milkshakes in the morning, and why their efforts to sell more later in the day were not working. Now, let's talk about a case study that is closer to home. If you visit the Christensen Institute's site, you'll find a case study of his theory from the condominium industry.

The objective was for a Detroit-area developer to sell more homes targeted toward retirees and divorcees. They priced accordingly, had all the luxury finishes, and spent on elaborate marketing, and yet their inventory wasn't moving. Was it a design problem? A pricing issue?

Nope:

So, Moesta took a Jobs to Be Done approach: He set out to learn from the people who had bought units what job they were hiring the condominiums to do, and the conversations revealed an unusual clue: the dining room table. Prospective customers repeatedly told the company they didn’t need a formal dining room. And yet, in Moesta’s conversations with actual buyers, the dining room table came up repeatedly. “People kept saying, ‘As soon as I figured out what to do with my dining room table, then I was free to move,’” says Moesta. The table represented family. 

What was stopping buyers from making the decision to move, he hypothesized, was not a feature that the construction company had failed to offer, but rather, the anxiety that came with giving up something that had profound meaning. “I went in thinking they were in the business of new-home construction,” Moesta recalls. “But I realized they were in the business of moving lives.”

To solve this problem, the company offered moving services, two years of free storage, and a "sorting room" in the condominium where new owners could dump their stuff and then take their time deciding what to keep and what to discard. And it worked. Brilliant.

Once you understand the actual barriers and "jobs to be done," you can solve for them. Sometimes it might be a design problem, but it could be something totally unexpected. Regardless, the solution lies in caring about and understanding your customers. This is true in all market conditions.

One of the great features of the so-called gig economy is that many of its businesses operate with an asset-light model. Uber, for instance, relies on drivers showing up with their own cars. This is the opposite of, say, the real estate industry, which, for a lot of business models, is both capital-intensive and asset-heavy.

But there is one problem with the asset-light model, and it's that it may not work forever. The Financial Times just reported that Uber has committed to spending $10 billion over the next few years on actual cars and on equity investments in various strategic companies.

For instance, earlier this month, electric vehicle company Lucid announced that Uber will be investing $500 million in the company and buying at least 35,000 of its cars.

This is gig-economy blasphemy, but it's very obviously an existential concern for the company. Uber needs to be in the AV race, or else asset-light could be an asset-liability. The thing that helped Uber become successful in the past now seems to be what they need to overcome in this new mobility race.

On a loosely related note, I find it somewhat amusing that cities are now starting to push back against robotaxis out of fear that they will displace Uber drivers. If you were following Uber in its early days, you'll know that cities fought the company vehemently because of the taxi lobby. Now they're trying to protect it.

Cover photo by Erik Mclean on Unsplash