I disagree with Paul Graham
TL;DR: Paul Graham thinks it's bad when companies start competing on brand vs. functionality. I think he's wrong. It's actually good for consumers and innovation.
A few months ago, Paul Graham wrote an essay called The Brand Age about how software products are becoming commodity.
When companies can’t differentiate based on functionality, he says, they have to start differentiating based on brand. And this, he says, is bad.
His argument is that trying to compete on brand leads to worse products. He uses the watch industry as an example (I’m not a watch guy, can’t say if that’s true or not. Very well could be.)
IMO he is completely wrong. The opposite is true: once companies start competing on brand, consumers/buyers only benefit.
They have options, they don’t have to put up with subpar treatment from companies who have a true product moat (ex: price increases, feature gating, enshittification), and they get to choose ‘the best’ tool based on their preferences, no matter how idiosyncratic.
Beyond that, I’m surprised PG even tried to draw a comparison between jewerly and functional software.
Everything isn’t watches. Watches, apparel, and other D2C product categories are inextricably linked to social positioning. People use them to signal an idea about themselves to others.
So yes, in the watch/clothing/shoe/car industries, companies have definitely had seasons of making worse products to appease whatever trend had taken hold.
But that’s purely because cultural trends are illogical and often run counter to what’s practical. It has nothing to do with watches becoming easier to make.
There is no reason to think that will happen in software.
Consider why businesses buy software. Typically, it’s to improve some facet of their business. They want to drive revenue growth or make sure they can send money securely.
Why the hell would anyone sacrifice functionality for aesthetics if these are their goals? People are irrational, but they’re not THAT irrational.
It’s much more likely that the shift from product-only differentiation (which hasn't truly existed for a while) and brand differentiation results in companies having to conduct themselves better.
If they increase their prices and some kid builds a super secure indie alternative, there may be consequences. People may switch.
If the product has an unbearably complex UI and a competitor comes out with a simpler one, people may switch.
But mostly, people may just pick products based on somewhat illogical criteria. They may opt for one product and not the other because they like the font in the UI. Whatever, who cares.
Some things aren’t like other things. Watches aren’t CRMs. The democratizatoin of software development is gonna be just fine for innovation and buyers (security is a different story, but I do not think there’s a world where enterprises are procuring vibe coded products willy nilly.)
It just might be bad for companies who don’t like to compete.