Defensibility in an AI-Driven World

How to operate in a world where anyone can copy your product in minutes

The Old Product Manager

Up until now,?the most important skill for a Product Manager has been communication .

I.E. The ability to 1) get stakeholders to understand what you want to do & why, as well as 2) to synthesise the needs of those stakeholders & bake them into your decision-making.

Up until now, this made a lot of sense.

Communication mattered because product decisions were generally made with a lot of input from a lot of different people.

Furthermore, execution played an important role in product success. In a world where a feature took weeks (or months) to build, it was important to make sure you were committing to build the right thing.

The New Product Manager

Within 6-12 months, this is likely to radically change. As I outlined in?this article on how AI will radically change product management , we are starting to see a number of tools that make execution obsolete.

Galileo , for example, allows you to create full high-fidelity wireframes from a text prompt within seconds.?10web ?requires just a short text prompt to build & launch a full Wordpress website. Fully functional, no-code applications launched with a few lines of text are just on the horizon.

If anybody can launch any product within minutes (!), the whole development process breaks down. Suddenly, execution?no longer?matters. The quality of ideas?matters.

And communication? Largely irrelevant.

We’ll still have stakeholders, but rather than endless discussions (meetings, workshops, etc.), we can simply build an idea for them in minutes &?show them the real thing. Even better, build &?test?the real thing to see whether it is, in fact, valuable for the customer & for the business.

So, what is going to replace communication as the most valuable skill for a Product Manager?

The Future Builders who will launch the next generation of successful products?

Defensibility in a Highly-Competitive World

There are 16x more products today than just 10 years ago .

We already operate in a highly-competitive world.

Imagine what happens - what is?already?happening - when anybody can launch a product with just 1-2 lines of text prompt?

100x more products every 10 years? 1000x even?

It’s very possible.

That means the key skill you need to master will be this:

Building a defensive moat.

What is a defensive moat?

Essentially, your product’s ability to gain & then protect market share. To create a moat around your castle to fend off the competition, in short.

Why is it so important to understand this concept?

Say you work at Airbnb.

Within 1-2 years, anyone can type into an AI tool “build the Airbnb application with a new brand for me”.

Within minutes, it’s done.

Full backend.

Full frontend.

Unique design assets that don’t break copyright law.

The big difference?

Their company probably consists of 1 PM and 1 developer, rather than 1,000s of employees.

The result? They can charge a hell of a lot LESS money for the same product. That = capture of your market.

As a PM, what can you do about this?! And what are the key concepts you need to master?

3 Tactics For Building A Defensive Moat In A 100x More Competitive World

Firstly, it’s important to note: In order to build a defensive moat (i.e.?defend?value) we need to actually have something to defend in the first place (i.e. understand how to?capture?value).

The same principles of discovering an under-served market, focusing on an acute need & coming up with a differentiated product offer will still remain relevant. This is & will remain the bread & butter of product strategy (you can delve into this topic with?our free 7-Day Career Accelerator here? btw).

However, the area I see?least?understood - and what will be?most?valuable for PMs - is defensibility.

Here are the 3 main tactics you should be thinking about when building new - or improving existing - products:

1/3 Network Effects

A network effect is where your product provides more value the more users there are on the product.

Airbnb is a good example of this. Specifically, the more hosts there are, the more options for a potential guest to find the perfect accommodation. The more potential guests, the more likely my spare room will get booked out as a host.

Why does this provide a defensive moat?

Somebody could build an exact copy of Airbnb (with ability to list accommodation, browse accommodation by location, interests, etc.), but would likely fail. Why? There is no value in the architecture of Airbnb. As a traveller, if I go on to the platform and there are no accommodation options, there’s no point using it. Conversely, as a host, if I list my property & there are no users to book it out, what’s the point?

Airbnb is defendable because it has a critical mass of travellers & hosts that could only be undermined by a radically?different, radically?better?offer.

2/3 Leverage data

Where you have existing users, look for chances to leverage the data they are creating.

Google Search is the classic example of this. By creating rich search data, Google was able to 1) improve the search experience to show more relevant results and 2) launch its Google Ads product in order to generate a new source of revenue.

3/3 Differentiation by market

With products built in minutes, every market becomes hyper-competitive.

That means you may need to breakdown your product & adapt it for different audiences, so it offers as much specific value as possible. For example, as Airbnb, you’ll want to launch adapted versions of your core accommodation product to serve the unique needs of more niche markets.

If there is a niche that loves surfing, for example, what about creating listings just near great surf beaches, with wetsuits & surfboards for free use at the accommodation. Or accommodation specifically for dog owners.

Forward-thinking companies will do this because they know that if they don’t niche down, someone else will do it for them. Some will act pre-emptively. Most will try to move quickly as they see small competitors emerge in their markets.

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Conclusion

It’s easy to think that all of this is far off in the future. 5 years away) Maybe 10?

It’s comforting to think that. And easy to forget that development in AI is?compounding?i.e. constantly accelerating every single week.

So an AI-driven future is closer than you think.

My advice?

Start experimenting with AI tools, but, more importantly, start skilling up through experimentation with the products you work on to master these tactics for building a defensive moat in an AI-driven world.

If you don’t, you will be out of a job within 2-3 years.

There won’t be a place for the obsolete skills of an Old Product Manager.

There will, however, be a very exciting role to play for those willing to skill up & step up to the challenge (and opportunity) of an AI-driven product world.