The Era Where Necessity Builds the Technology

A New Paradigm for the AI Era

Until now, we have lived in an era where "technology creates the need." Because the cost and time required to develop software were so immense, once a piece of technology was built, it became a moat in its own right. Users had no real choice. Whenever a SaaSSoftware as a Service​ company offered a service, no matter how specialized our industry was or how distinct our own way of working might be, we had no choice but to adapt and conform to that standardized format. 

It wasn't a matter of shaping the technology to fit our needs — 

we had to squeeze our needs into the mold of the technology.

But AI is starting to shake up that structure. The traditional SaaS-based software market is being disrupted, and demand is growing for specialized software tailored to each company's own needs. In other words, businesses no longer have to force themselves into a mold someone else designed.

So who comes out ahead in this shift?

The Rise of Specialized Industries with User Moats

Here's how I see it. The answer lies in specialized industries — ones with a clear software need they could never solve on their own, yet with their own standards and distinct ways of working. Only the companies in those industries that build their own AI and software, and use it to keep delivering their service, will survive. You might find good candidates among the "boring industries" I mentioned in an earlier piece. ※ Boring Industries Are Actually More Interesting | Schlep Business

In the end, I think the companies that survive won't be the ones with a technological moat, but the ones with a "user moat" — businesses in specialized industries that already have a customer base locked into a structure they can't easily walk away from. These companies, I suspect, will build ever sturdier walls and tighten their grip on the market. My cautious prediction: the survivors will be the ones that move away from depending on massive outside software to run large-scale operations, and instead build and run their own specialized technology, sized to fit their own scale.

A Pattern History Keeps Repeating

This, in fact, is a trend we've already lived through once before, historically.

When the conveyor belt system emerged in the shift from the first to the second industrial era, consumer demand was already booming and far outpacing supply. Mass production quenched that thirst. But over time, oversupply set in, and companies were forced to diversify into smaller-batch, multi-item production. What we're witnessing now, as an extension of that same arc, is the identical phenomenon playing out in software.

From Few Products to Many — Which Services Will Survive?

The factories and costly processes once required for mass production, built on massive capital, are becoming unnecessary. Consumers can now produce for their own needs themselves, and that production is evolving ever more toward the personalized and custom-fit.

Let me put this in simpler terms. Think of a 3D printer. Say every household now has one, and people print out whatever tool they need, in whatever shape they want. But anyone with real expertise will tell you how crude the output of a home 3D printer looks next to something made by injection molding. It's simply a different league. The same goes for making a book. You could print the pages at home and take them to a copy shop to get them bound. But that feels worlds apart from an actual, finished book.

This is an era where everyone has been handed the tools, yet a gap in quality still remains. Within this landscape, I see software-based services splitting into three possible directions.

Services That Close the Quality Gap

Everyone has the tools now, but the quality of the output will inevitably vary. Companies that provide software or hardware modules to narrow that gap have a real shot at survival. Pulling crude output up toward a professional-grade result — that's the first opportunity.

Services That Create Needs People Never Knew They Had

I suspect the companies that succeed will be the ones that can genuinely manufacture "need" even when people don't yet know what they want or require. Even with a 3D printer at home, you can't print anything if you don't know what to make or what you actually need. So people end up just downloading random blueprints floating around online, printing them out, and quickly losing interest. A tool without direction is useless. Supplying that direction — that's the second opportunity.

Services That Create the Market Itself

Companies that establish a particular market and keep people flowing in and staying active within it are bound to keep growing. This isn't a one-off transaction of developing and delivering a single piece of technology — it's building a structure where transactions keep recurring. A market where supply gets produced and delivered the moment a need arises, and where people naturally keep flowing in, becomes a moat in itself. This is the single most powerful service a company with a user moat can offer.

Where Publishing Is Headed

Let's bring this back to publishing.

Let's take a look at how a book, as a product, currently gets made. An author writes a manuscript and submits it to a publisher. The publisher handles the entire process — editing, proofreading, copyediting, design, and production — then ships the finished book to a distributor, which sends it on to bookstores. From there, retail distribution takes over.

Here's the catch: once a book is out and being distributed through bookstores, all marketing costs fall entirely on the publisher and the author. The bookstore's job stops at putting it on a shelf. Unless money changes hands, there's no better placement, no extra visibility, no added promotion. If a new release turns into backlist and demand dries up, it can even get moved to a wall shelf or pulled off the floor altogether. So every effort to change how a book is displayed has always fallen on the author and the publisher.

Publishing's Long-Standing Thirst — That Is the "Need"

This is the thirst — the need — that publishers and authors have long felt in the book market. When it comes to displaying books as a product, bookstores have been offering a service that fails to meet that need.

That's why, if you look at bookstores these days, you'll see all sorts of miscellaneous goods displayed alongside books, the actual product on offer. I think that's exactly where this comes from: bookstores have focused less on what needs their users actually have, and more on a business model built around real-estate rental income from their floor space.

Going Forward, the Market Must Let Need Shape the Technology

The point isn't to build the technology first and then demand a need for it — it's to build the technology that's actually needed. What matters is pinpointing exactly what the publishing market truly needs right now, identifying where publishers and authors have long felt that thirst, and building the technology and services to match. That's the direction publishing needs to head in — and it's the new market we want to build.