Hongbeom Park

The Rise of Luxury Software

HongbeomNov 10, 2023Thoughts·xbase
3 min read|

OpenAI will replace a lot of software we use today. But I think there is a kind of apps that will will actually benefit from it: Luxury software. We've got things like fancy cars, designer clothes, and big houses. Luxury software? Not so much. But I think that's about to change. The perfect example might be Superhuman. I believe what makes Superhuman special is not just how quickly you can go through your inbox. When you use Superhuman, it feels like you're using digital equivalent of a Porsche. There's a delight in every detail. You can feel the considerate design choices. The 'Sent from Superhuman' signature’ is also a flex.

Let’s look at another example. Rize is a fairly expensive automatic time-tracker. It targets people who want to get the most out of every waking hour. They've got a big community of 4,000 on Discord. The crazier thing is it’s made by just two people.

RIZE is a good example of what luxury software should do (despite the low price) It makes your routine tasks fun via gamification, provides you with beautiful charts you can share for signaling, and tracks your time automatically with AI – all making it feel high-end. I see a lot of my friends in startups sharing their RIZE charts on social media. Watching them got me to try RIZE, and now I'm subscribed too. Most of the major tech players view these products as mere toys. Tools like Rize have a relatively small market. And they lack moats that attract investors, like unique technology or network effects. Yet I think this is where small teams should focus on. Most people aren't trying to build the next unicorn. They just want to make money doing what they love. But why are we seeing luxury software become a viable business model now?

I believe it’s GPTs. YouTube made dramatically cheaper to distribute videos to millions of people. Nowadays, people making videos just focus on creating awesome content, and YouTube takes care of the rest. This big change in how videos get out there has made a lot of content creators pretty wealthy. A similar thing is happening to product development. GPTs are lowering the cost of building products by probably over 90%. This lets product makers target niche audience and still create a profitable business. More people will also want luxury software. A lot of solo entrepreneurs and small teams are now hitting tens of thousands of monthly revenues. In the physical world, people buy fancier cars when they make more money. So, as we start to see more software millionaires, I bet they'll spend more on fancy software too.