Tobias van Schneider argues that AI-era small teams can finally build specialized software for "unsexy" physical industries long ignored by top engineering talent locked into ads and social products—and that switching costs for legacy enterprise software are starting to fall.
If you think about it, there is a lot of software that hasn’t been built across hundreds of industries because our best paid designers and engineers were occupied with building social networks and ad networks.
"The best minds of my generation are thinking about how to make people click ads." — Jeff Hammerbacher
Meanwhile, massive parts of the physical economy were and still are running on spreadsheets, email, paper forms, ancient desktop software and enterprise systems installed sometime around 1999 by companies who couldn't care less. And most companies still use that exact software, even today, for various reasons.
Construction. Manufacturing. Logistics. Agriculture. Waste management. Energy. Shipping. Maintenance. Laboratories. Local government. Field services. Industrial equipment. Healthcare administration. The list is endless.
A lot of these places were simply too small, too "unsexy" or too expensive to serve with traditional software economics, especially after engineers became one of the best paid career choice. You can blame me too, I decided to work mostly within the "sexy" industries in my career, because anything else was either too underpaid, or too bothersome to work on. In most cases it was a mix of both. This is why all these industries haven't seen much innovation on software yet, too many edge cases, too many custom processes, not worth doing for what is required to make a change.
But this is where everything is changing now. Small teams can now build specialized tools for markets that previously couldn’t justify the best of the best engineering talent. Small teams are able to do things that took years, and now do it within months. End to end. Small teams have all the necessary tools now to make proof of concepts within days, which is massive if you rely on traditional sales (which most of these industries do).
And even further, lets not forget about all the terrible enterprise software out there owned by massive corporations who locked in clients since the late 90s and didn't change a single thing since then, either for similar reasons (not worth it) or simply because they are sitting on massive contracts and make most of their money selling courses/coaching that teach their very own complex software (see SAP, Salesforce etc.).
All these companies are completely vendor locked due to switching cost, but that switching cost is slowly disappearing.
Maybe I am too optimistic here, but there are entire industries still waiting for their first piece of software that is truly designed for the people using it.
Is it going to be easy? Definitely not. You still have to put in the work. But its at least 100x better than how it was before.