Unlocking the Value of Software in the Age of AI
A Guide to Creating Software Worth Paying For When Everyone Can Code
Unlocking the Value of Software in the Age of AI
Access to information and large language models has made software creation more accessible than ever. Rather than diminishing software's value, these advancements have amplified it. This mirrors how broader access to education hasn't decreased the value of writing—instead, it has created more opportunities for creative and impactful expression. By removing technical barriers, anyone can now develop software that solves meaningful problems.
But the question remains: How do we build software that delivers true value?
What is Value?
To create valuable software, we must first define value. Simply put, value is the benefit a product provides to users relative to the cost or effort required to obtain it. A truly valuable product isn't just one that customers praise—it's one they're willing to pay for.
While value takes many forms—including the community-driven success of open-source projects—this discussion focuses on value measured by customers' willingness to pay, which validates your product's worth.
Understanding Subjective Value
Value is inherently subjective—what's essential to one user may be irrelevant to another. To gauge your product's real-world value, set a minimum viable price early, tied to your minimum viable product (MVP).
This pricing creates a natural filter, attracting only genuinely interested customers. Their willingness to pay becomes a clear measure of your product's perceived value.
Iterating on Both Product and Business Model
As you refine your product to meet customer needs, remember to iterate on your business model. These elements should evolve together. Ask yourself:
How valuable is the current iteration of my product?
What payment models will work best for my target customers?
By improving both the product and its monetisation strategy, you increase your chances of achieving product-market fit. This dual approach ensures your product not only solves problems but does so sustainably.
Value Through Efficiency & Effort Reduction
Think about value in terms of saved effort and increased efficiency: How much work, time, or resources does your software help customers conserve? For instance, an AI-powered solution offering 24/7 customer support delivers value by cutting both labor costs and wait times.
Quantify this value by comparing your solution's cost against traditional approaches. This comparison often reveals your product's worth through concrete savings and efficiency gains.
Final thoughts
When developing your MVP, treat customer willingness to pay as a core signal, not just another metric. By incorporating pricing feedback early and evolving your business model alongside your product, you ensure both align with what customers truly value.