And it won’t need to be better than yours.
There’s a reason Kirkland Signature outsells most name brands at Costco.
It’s not that Kirkland is better. Walk down any aisle and you’ll find the same pattern: a name brand at full price, the Kirkland version right next to it, and a gap between them that gets harder to justify every year. The ingredients are nearly identical. The quality is close enough. The price isn’t.
For most products, “about the same quality, lower price” is an unbeatable formula. When the product itself is functionally equivalent, the math wins. The name brand either finds a reason to exist beyond the product or watches its market share erode one shopping trip at a time.
Software has always had a version of this. Competitors undercutting on price, open-source alternatives nibbling at the edges. But what’s coming is different in scale. AI didn’t just make software a little cheaper to build. It made building a competitor dramatically easier. And when the barrier to entry drops that far, the market doesn’t get a few store brands. It gets flooded.
Most software companies aren’t prepared for what that flood looks like.
Competing Used to Be More Expensive
AI collapsed the cost of building software. Writing code, designing interfaces, implementing features, iterating on feedback. The investment required to go from idea to working product has dropped by an order of magnitude, and it’s still dropping.
This isn’t primarily a pricing story. It’s a market access story. When it costs less to build, more people can build. Teams that couldn’t afford to branch off their main product and create something new can now create it. Agencies that built websites can now build applications. Small teams with a clear vision of what a specific kind of customer actually needs can now ship software that serves that need.
The result is a market that’s about to get a lot more crowded. Not with clones of existing platforms. With focused alternatives that do less but fit better.
Nobody’s Building Salesforce
Here’s what most people get wrong about this shift: they imagine it as a clone war. Somebody builds a cheaper Salesforce, a cheaper HubSpot, a cheaper whatever. Same features, lower price.
That’s not what’s happening.
Nobody is going to try to build Salesforce. What they’re going to build is the 20% of Salesforce that a specific type of customer actually uses. A CRM that does three things really well instead of a hundred things adequately. A project management tool shaped around how a ten-person agency actually works, not how a platform decided everyone should work.
The big platforms built their value propositions by adding features. More integrations, more capabilities, more dashboards, more everything. That breadth became the justification for the price. But most customers don’t use most of those features. They’re paying for a hundred things and using fifteen.
When a focused competitor shows up that does those fifteen things well, the hundred-feature platform doesn’t feel like a premium anymore. It feels like overhead.
Those big dogs are going to have to rethink their strategy. They need a reason to exist beyond the feature list, because the parts of it that people actually care about are the parts that are easiest to replicate. The software alone is not going to be worth it.
Software Was Never Coca-Cola
The Kirkland analogy captures something real about this dynamic. But the software version is actually more disruptive.
In a grocery store, there’s one store brand per category sitting next to the name brand. Same product, different label, lower price. The name brand has one alternative to worry about.
In software, the alternatives aren’t copies. They’re different products entirely. Smaller, more focused, built for a specific kind of customer that the big platform only serves generically. It’s not one Kirkland. It’s dozens of purpose-built alternatives from indie developers, AI-assisted builders, small teams, agencies, freelancers who used to build websites and now build applications. And more every month.
In consumer goods, some brands survive this pressure. But notice which ones. Coca-Cola survives because the product is genuinely different. The recipe is the moat. Nike survives because the brand itself is the product. People aren’t buying shoes. They’re buying identity. The swoosh is the moat.
Everything in the middle gets squeezed. The name-brand laundry detergent that works exactly like the store brand but costs twice as much. The premium cereal that’s the same grain in a different box. These held shelf space through habit, not because they offered something the alternative couldn’t match.
Software’s middle tier is even more exposed. Nobody picks their CRM the way they pick their sneakers. People didn’t choose Salesforce because of what it said about them. They chose it because it was the serious option, and there weren’t many others. The premium wasn’t earned through brand loyalty or genuine product differentiation. It was earned through scarcity of alternatives.
That scarcity is ending.
They’re Not Leaving. They’re Just Not Signing Up.
The big concern isn’t a mass exodus. A company with 47 tools piped through HubSpot, entire sales teams certified on the platform, years of workflows baked into every department? That company isn’t going anywhere. The switching cost is enormous. At that scale, lock-in is real.
That’s not the threat.
The threat is that new customers never arrive.
The startup choosing their first CRM. The small team setting up project management for the first time. The growing company looking for a support tool. These buyers used to have a short list. A handful of serious options with long feature lists and established reputations. If you were a ten-person team, you picked something like Salesforce because that’s what serious companies use, even if you only needed a fraction of what it offered.
That calculation is changing. Those buyers now have options that fit their actual size and actual needs. Leaner tools, lower commitment, built for how they actually work instead of how a platform decided everyone should work.
They’re not leaving Salesforce. They’re never signing up in the first place.
And the alternatives keep multiplying. Every month, the market gets more saturated with focused, purpose-built tools. The big platform’s addressable market doesn’t shrink because customers are defecting. It shrinks because the next generation of customers has somewhere else to go.
What Can’t Be Built
There’s a sequence here that’s worth tracing to its end.
Building gets easier. More competitors enter the market. Each one serves a specific need better than the platform that tries to serve everyone. The market fragments. The big platforms’ share erodes not through exodus but through a thousand small decisions by new buyers choosing something that fits.
If you follow this chain all the way, you arrive somewhere unexpected.
When the market is saturated with alternatives, when focused tools can be built for any niche, when the software itself stops being the differentiator, what’s left? What makes someone choose you over the dozen other options that do roughly the same thing?
The answer isn’t a technology. It’s not a feature set or an integration layer. You can try to reverse-engineer any of those. You might come up with a facsimile. Store brand versus real brand.
How You Show Up
What’s left is the part that can’t be replicated at all. The people behind the product. Their values and point of view. The way they treat their customers, the quality of their support, whether they actually engage with the people who use their product. How they show up.
I’ll give you an example. We used a support tool for years. Worked well, did what we needed. Then a major platform acquired it and slowly stopped delivering the service we were paying for. Features disappeared. Support degraded. The product we’d signed up for wasn’t the product anymore. So we wanted out. Reasonable enough. We were under a three-year contract, and they refused to prorate, refund, or release us. We paid for the full term for a product that no longer did what we needed it to do.
That was the decision they made. And it guaranteed we’d never use anything they sell again.
If the choice is between them and a new competitor that showed up with the features I actually needed and treated me like a human being? That’s not a hard call.
This isn’t a feel-good argument about the importance of company culture. It’s the logical endpoint of the market pattern. When everything that can be built gets built, the only durable differentiator is the thing that can’t be built at all.
The more capable AI gets, the more valuable it becomes to be human. Not because human skills are romantic or irreplaceable in some abstract sense. Because when the barrier to building drops far enough, authenticity becomes the only scarce resource in the market.
The Distribution Question
I don’t have a clean answer for what comes after that recognition. The biggest remaining challenge might not be differentiation at all. It might be discovery. Big companies’ most durable moat isn’t their software anymore. It’s that people can find them. They own search rankings, app store placement, conference stages, partner ecosystems. I don’t know that AI helps with distribution. Not yet.
But distribution or not, the shift underneath is already happening. Most incumbents won’t feel this for a while. Their existing customers are locked in, their revenue looks stable, and the new competitors are too small to show up in a board deck. But the pipeline is already shifting. The customers who would have signed up three years ago are finding alternatives before they ever see a demo.
By the time the pattern is visible, it’s already set. The timeline is uncertain. The direction isn’t.
