Mitch's Note: This post is from Charles Hudson, Managing Partner at Precursor Ventures. What resonates with me is his observation that AI is creating an entirely new category of software—tools built for an audience of one. While most of the attention is focused on AI disrupting existing markets, I'm increasingly interested in the value that will be created by people building solutions that never would have existed because they were previously too small, too custom, or too expensive to justify.
Single User Software - No Market, but Very Valuable
One of the things I didn’t fully grasp until I started building software for myself using AI coding assistants is the rapid growth in software applications for single users. What makes these products interesting to me is that they are so bespoke you would not have paid a software developer to build them for you because doing so would have been cost-prohibitive in the pre-AI era. I also doubt any developer would have pursued these products as a for-profit business because the market was too small.
We are in the very early innings of understanding what it means to have many applications with only a single user per product. That single user will continue to develop and support the product for as long as it remains useful and as long as the time and energy required to use it feel worthwhile. If that balance tips and it no longer feels useful, those products will die. I don’t believe there is a business to be built here, but this idea of single-user software really connects to another thing I have only recently begun to fully internalize as I’ve built roughly two dozen agents that I use regularly at Precursor.
So what does all of this mean for what software is worth? The picture is murky, and the impact depends on the product’s nature. Basic, utility applications with a narrow scope will face consistent downward pricing pressure from the threat that the end user will just build the product themselves. They might never build it, but the belief they could build it will make them more price-conscious and skeptical of paying more for products that deliver narrow value propositions. The result isn’t uniform deflation - it’s a split. Products that require maintenance, new feature development, integrations, and the ability to interact with the customer’s AI tooling and infrastructure will still be purchased, as buyers won’t want to do all that work themselves. The experience of being a junior builder will reinforce the value of this work to the buyer, but they won’t pay software-like margins for it; it will be valued, but less than what software vendors are used to getting from license revenue.