B2B Software is Dead in Era of AI w/o World-class Design
“The next billion-dollar B2B company won’t win on features - it will win on feelings."
⚡ AI Shift Has Broken the Traditional B2B Playbook
For years, the winning formula in B2B SaaS was predictable:
Build robust tech. Distribute through sales. Add design at the end…maybe.
That model was bad. But we see with products like Microsoft Teams and CRMs like Salesforce, a poorly designed product with lots of features, coupled with a strong sales organization and pricing power, has worked.
In the era of AI, the borrowed time these companies were living on is running out.
Thanks to AI, technology is no longer a moat. LLMs can write production-ready code, and no-code tools can build functional apps in a weekend. Agents and copilots are automating entire workflows.
The barrier to shipping features has collapsed. Every product works. The question is no longer, “Can it be built?”. The question of the day is, “How does it feel to use?”.
In this competitive landscape, design is strategy. And by design, I don’t mean just how software looks. Design is how the product behaves. How it reduces friction. How it drives emotion and loyalty. How your product makes the user feel.
In a world of software abundance, experience is the only scarcity left.
The Great Commoditization
The engineering-led moat is gone.
AI and no-code platforms have turned yesterday’s core capabilities into building blocks anyone can use. CRUD apps, workflows, permission models - all replicable by a solo founder with ChatGPT and Retool.
This means features are no longer differentiators. You can’t be selling a spreadsheet of check boxes. UX is the new battlefield as employers search for increased productivity through collaboration and innovation. It is design that makes software sticky. Great design gives a product life. Users come to love using it, integrating it into their daily rhythms and routines. It can even become part of their work identity and the reason for them to join (or leave) an organization. We saw that with Slack and the developer community.
Legacy enterprise products built around complexity and consulting are deeply vulnerable here. And they should know it.
The winners in this new environment will be products that feel effortless. Products that users want to adopt. Products that are designed, not just built.
Slack: Design as a Wedge
Slack didn’t invent chat. It reinvented how chat felt. A tremendous amount of investment was put into the back-end to ensure that it is fast and responsive. Just as much energy was invested in the experience. To make the experience “human”.
A tremendous amount of thought (and debate!) was put into defaults and workflows. Interactions were designed, reviewed, and then designed again.
That experience-first approach created pull. Users adopted it without permission. It spread because it was enjoyable. Users fell in love with the product and it quickly replaced tools that were "functional" but painful.
And that’s the pattern we see with Figma, Notion, Linear, and Airtable.
These products win not because of more features, but because of reduced complexity. A better onboarding experience. A deeper emotional engagement and sense of accomplishment as the user feels themselves become more productive and effective at what they do.
These products feel better - and that’s the moat.
Why Design Wins in B2B
🧠 1. Reduced Cognitive Load
Great design removes friction and decision fatigue. This is the primary reason why we beat Google and Gmail with Outlook mobile in the enterprise. We focused on the reducing cognitive load for central tasks to differentiate (and leant into PLG hard for distribution).
More recent examples of reducing cognitive load:
Airtable makes relational databases feel like spreadsheets
Notion blurs docs, tasks, and wikis into a seamless flow
Linear turns issue tracking into something... enjoyable?
These tools work with the user’s brain, not against it.
⚡ 2. Faster User Adoption
Modern tools can’t afford friction. Everything needs to be intuitive with a heavy bias to what I call Successive Revelation. Don’t throw everything at the user right off the bat and expect them to hunt and peck their way through menus to learn your product.
Design-led products onboard without calls or FAQs. (When was the last time you read a how-to guide for Slack? When was the last time you did that with Excel or Salesforce?)
These products spread within teams and organizations without any formal training. It happens organically as part of natural human workflows.
And because of all of this, beautifully designed products win users before procurement and IT ever sees them.
Hearts and minds have already been won.
❤️ 3. Higher Retention
Users stick with products that make them feel empowered and productive. Slack was a perfect example of that. Not only did users feel empowered, but they felt connected to the rest of their team, regardless of where they were physically. When was the last time email did that? Even if emailing someone on the other side of the office, the products make you feel far apart. Distant and remote.
Excellent and thoughtful design brings people together and builds habit loops that feel natural.
That same attention to detail reduces the cost and burden of support. Not only is the product intuitive to use, but advocates and champions are created. Folks who love to help their teammates get the most out of the new product.
Retention becomes emotional. It’s not just technical and growth hacks.
🔁 4. Viral Growth Through Delight
Design is a growth engine. Through thoughtful design practices, understand the whole human within their context - team and goals f- and then deliver solutions that joyfully take the user to that goal with human connection.
Figma made real-time collaboration feel native
Loom turned async video into a default mode
Miro felt like a whiteboard, but better
Human connection is the ultimate growth flywheel. That’s how bottoms-up adoption works.
💰 5. Premium Positioning
Design-led products command higher prices - and justify them. Every design-led product on the market has greater brand value and is able to command higher prices. That is now axiomatic with some key pragmatic and measurable reasons.
Review your customer journey and measure the time-to-productivity. This will resonate with buyers and users alike.
Admins value reduced overhead as their budgets are reduced year-on-year. The fewer calls they have to take from confused execs, the better. That extra polish and attention to detail has practical value IT deeply appreciates.
Finally, IT is no longer the “bad guy” when it comes to tools. Yes, they are looking for productivity gains. They are also looking to increase retention and engagement in the workplace. Employees value tools they actually like, and that will reflect back to the IT department that is deploying them.
Design becomes your pricing power - not just your polish.
The AI Imperative: Why This Shift Matters Now
The rise of AI has permanently altered the competitive dynamics of B2B software. Tasks that once required months of engineering effort - building CRUD (Create, Read, Update, and Delete) interfaces, stitching together integrations, shipping MVPs (Minimum Viable Products) - can now be completed in hours with AI-assisted development.
AI now commoditizes backend logic, standard workflows, integrations, and automations.
What AI can’t replicate (yet) is taste. The process of getting the user into a “flow state” and keeping them there. Happily productive.
It is hard and time-consuming to step outside of the product, consider the context of the user, and make design decisions in a human-centered way.
That’s the layer where design lives. And I would argue that it’s now the last durable differentiator a company will have.
The next breakout B2B product will be chosen because it feels right - not just because it works.
If you’re still competing on features, you’re in a race to the bottom. If you’re building a differentiated experience, you’re in your own category. And that is market power.
Who’s Most Vulnerable in B2B (and Why)
Not every B2B company is equally exposed in the AI era.
Some have built resilient businesses around scale, ecosystem, or data gravity. But others - especially those whose products haven’t evolved with user expectations - are on a collision course with fast-moving, design-led challengers.
1. Feature Bloat as a Strategy
🛑 Vulnerable: Salesforce, SAP, Oracle
These giants win RFPs by checking every box - but at what cost to usability?
Their products are often bloated with underused features. They’re dependent on consultants to implement and maintain. And let’s face it, they are painful for everyday users.
⚠️ Risk: AI startups are now replicating the outcomes of these tools without the overhead, using better UX and faster onboarding.
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