Ask HN: Do you feel we've hit a point of diminishing returns on software? | Hacker News Reader

Ask HN: Do you feel we've hit a point of diminishing returns on software?

5 pointswnc31413 comments

Kind of a broad question I've been wondering about,

Do you feel that we've come to a point where software-driven companies no longer provide the same scale of value compared to the cost of inputs? The reason I ask is that it appears that so much of Tech's (I know -broad category)investment in new products have sort of landed with a thud, yielding few obvious use cases (VR for example)

For some time, software driven companies have created tremendous value applying software to some industry space, unlocking massive efficiencies. But today, it appears that while software competency is required for any company to be competitive, it feels that the core operational competence (be it supply chain, marketing etc) is what yields the greatest competitive advantages in their business.

Example: Walmart must have software competency to be competitive, but rather than innovation in software, innovation in supply chain and operations is what unlocks value for Walmart.

Curious about your far more informed opinions.

I had a buddy who worked at target for a while - specifically in supply chain management. They were writing software to manage their distribution topologically, or something like that, if I recall. They were using Conal Elliott’s “compiling to categories” and it sounded like it was successful.

Anyway, my point is that software is often what wrangles the complexity of a business process and makes it repeatable. I don’t see that going away any time soon.

I wouldn't call it a point of diminishing returns, more of a point of plateauing returns. Yet I don't think a lot of companies want to admit this and companies can still compete against each other so increasing market share is a path towards more revenue.

Truly revolutionary products that change a market are rare, like the iPhone. VR was never going to be something like that, there's too many negative factors for widespread adoption.

Maybe AI is one of those revolutionary things (hard to know when we're in its infancy) but it feels like AI is more along the lines of not a product itself but a supporting cast member. Much like the search engines of the 00's and all the spin off search engine companies not named google. Using their products by themselves wasn't going to leapfrog a company ahead of everyone else, it sort of became something every company needed to have. So now every single application out there has a search box. In a few years time, every app/company site will have some AI bot being used in some way. Contrasting AI with search does make me wonder if we're in a bubble of some kind.

A few thoughts:

1. The low hanging fruit is definitely drying up. There aren't a lot of opportunities to (for example) replace a human doing a job that can easily be handled by a computer at this point.

2. The remaining opportunities are a lot less "sexy." Walmart is a good example of this. Supply chain optimization is absolutely something that software helps with; intelligent order routing, demand forecasts, etc.

3. Less "sexy" doesn't mean "provides less value" IMO, even if that's not reflected in stock prices.

4. "Core operational competence" is super broad, as are supply chain improvement as a general category. Do you have thoughts on what sorts of improvements are being made here that unlock massive value?

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