Venturing Insights #10 - Is AI a Feature or a Product? Plus, a Quick Guide to Recognize the Difference
Venturing Insights #10 - Is AI a Feature or a Product? Plus, a Quick Guide to Recognize the Difference
Is this tech we're considering from a consumer's perspective a product or just a feature? Who will come out ahead in the long run? Perhaps we already have an idea.
Previously on Open Road Ventures: in the last episode of Venturing Insights, we demystified terms like PoC, Pilot, MVP, and discovered how to use them effectively in the innovation journey. If you missed it, find out more here!
Hey there, Open Road Ventures community!
I was tuning into a Wired podcast this morning, and something they mentioned really resonated with me. They said the recent WWDC (Apple's Worldwide Developers Conference) showed that AI is more of a feature than a standalone product. This idea hit home because it's the exact question we've been pondering here: Is this tech we're eyeing from a consumers point of view a product or just a feature?
AI as a feature enhances existing products by integrating AI technologies like chatbots, AI audio enhancements, and video resolution upscaling. Microsoft's Copilot Pro exemplifies this in enterprise tools, aiding productivity in Word, Excel, PowerPoint, and Outlook.
In contrast, AI as a product implies AI-driven applications designed to perform specific tasks or provide unique services.
Now, let’s rewind a bit and talk about Clubhouse.
Remember the pandemic-era superstar? Live audio stage events that vanished after they ended? Everyone was hooked. Major interviews, weekly shows, celebs dropping in—all the buzz.
But fast forward a year, and boom! Spotify, Discord, Slack, even Twitter had their own versions of this feature. Clubhouse couldn’t keep up and faded away. It was a classic case of a killer feature getting swallowed up by bigger apps.
This brings us to AI. We’ve seen attempts to make AI a standalone product, like the Humane AI Pin and the Rabbit r1.
Cool ideas, but they seem to flop. Even if they eventually work perfectly, will they survive? Or will they be overtaken by AI features embedded in more versatile devices?
Apple’s recent WWDC gave us a glimpse into this debate. Instead of launching an AI product, Apple sprinkled AI across their ecosystem. Writing tools in any app, an upgraded Siri that understands context better, on-device image generation—you name it. All powered by AI, seamlessly integrated.
It’s a different beast from Clubhouse. Apple isn’t just mimicking ChatGPT. They’re enhancing their entire ecosystem. They’ve built their own models, spent millions, and tailored everything to fit perfectly within their devices and user experiences.
Quick Guide to Recognize What’s a Product vs. a Feature
As innovators and venturers, it’s crucial to differentiate between a product and a feature. Here’s a quick guide to help you recognize the difference.
Think of a product as a collection of different mini-products. A feature, on the other hand, is a mini-product under the larger one.
Standalone Value:
Product: Can it stand alone and deliver significant value by itself? Think of a smartphone or a social media platform. These are products because they offer comprehensive solutions independently.
Feature: Does it enhance or add to an existing product? Features like “live audio rooms” enhance platforms like Discord or Twitter but aren't standalone solutions.
User Dependency:
Product: Does it have a dedicated user base that relies on it exclusively for its core function? For example, Spotify is a product people use specifically for streaming music.
Feature: Is it something users enjoy but could easily find within another product? Think of Spotify’s live audio feature versus standalone apps like Clubhouse.
Market Position:
Product: Is it marketed as a standalone solution? Products are usually branded and sold independently. For example, TikTok as a video-sharing app.
Feature: Is it marketed as an enhancement to a product? Features are advertised as part of a bigger solution, like Instagram Reels within Instagram.
Revenue Model:
Product: Does it have its own distinct revenue model? Products often generate revenue through sales, subscriptions, or ads. Think of Adobe Photoshop.
Feature: Does it support the revenue model of the main product? Features usually don’t have standalone pricing but add value to the main product’s offering. Like in-app purchases within a mobile game.
Practical Considerations for Innovators and Venturers
Here are a few practical considerations for applying these concepts:
Assess the ecosystem: When evaluating a new tech idea, consider whether it thrives better as a standalone product or as an integrated feature within a larger ecosystem. Think of Clubhouse’s fate vs. TikTok’s success as a standalone.
Leverage existing platforms: Sometimes, integrating your innovative feature into an existing platform can provide a faster route to market and broader reach. Think about how Slack, Discord, and Twitter quickly adopted live audio features.
Build unique value: If you're aiming for a standalone product, ensure it offers something so unique and valuable that it can't easily be replicated as a feature. TikTok’s algorithm and user engagement levels are prime examples.
Prepare for copycats: If your innovation is a hit, expect bigger players to integrate similar features. Have a plan to stay ahead, whether through continuous improvement, superior user experience, or additional unique features.
Think long-term and be wary of the hype: Consider the sustainability of your product or feature. Will it still be relevant if it gets integrated into larger platforms, or will it fade beyond the hype like Clubhouse?
Look for clear monetization strategies: While investors may be willing to invest in a company with a promising product or user base, it's important to consider how that product will generate revenue and become financially sustainable in the long run. There should be clear and sustainable monetization strategies that are aligned with a company's product and user base.
Ultimately, there’s no definitive answer yet on whether AI is better as a product or a feature. It might be both. But history suggests that features often get absorbed by larger products unless they offer something truly unique and irreplaceable.
What do you think? Can AI thrive as both a feature and a product, or will one eventually dominate? Is AI as a product merely something related to the recent AI hype? Drop your thoughts in the comments, and let’s get the conversation going!
Until next time, keep innovating!