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How Will Generative AI Impact Digital Product Development?

The rapid advance of generative artificial intelligence (Gen AI) is changing how digital products behave and how digital products are built.

If a digital product is part of your business, or if you're considering creating one, here’s what you need to know (without all the hype). We are already seeing AI having a major impact on digital products. We are still determining whether that effect will be massive or merely huge. 

While the initial tsunami of worry and excitement that followed the introduction of Chat GPT-4 may have eased a bit, generative AI continues to evolve and is here to stay. We are in the early stages of a multi-year transformation that will have significant implications for business. 

What those implications are depends on the specific business opportunity. The important thing is that you must be paying attention now. Here’s how we see the world of Gen AI unfolding over the coming months and years.

Digital Product Development Is Going to Get Even Faster

Building a product is already faster thanks to Gen AI. And because the “doing” is quicker and more commodified, the “thinking” is becoming more important than ever. 

Here are some compelling applications we’re already seeing in Gen AI:

Competitive research. Gen AI is helping conduct qualitative synthesis, quantitative analysis, and competitive research. New applications can develop transcriptions of interviews with potential customers and then spot patterns and produce an initial data set. While it’s not replacing humans, it’s making the human work in the research phase more efficient. 

Designing and prototyping. Gen AI is being deployed to create wireframes, develop rapid prototypes, produce information architecture, and even transform Figma designs into code. All of this combines to get to rapid prototypes and even a working MVP much more quickly than existing approaches. 

Development. The most profound advancement is coming in the final step: the development of digital products. Gen AI is producing design-to-code integrations, code creation, and test writing. A recent study from McKinsey showed Gen AI is already creating up to a 45% increase in speed and productivity for developers working on low-complexity tasks such as creating code and tests. 

Understanding and Adopting AI Integration Will Be Essential

Not every company or digital product developer will need to become an AI scientist or a prompt engineer. But everyone will need to consider the role Gen AI will play as it becomes integrated in more and more digital products. 

For example, AI will become an important part of many—if not most—digital products, both as bots (current state Gen AI) and as agents (AI that can interact with other systems). 

Product teams will need to understand AI-human interaction, as well as value propositions, tech capabilities, UX heuristics, and code development in the context of AI. This moment is drawing ever closer because the barrier to entry isn’t as high as you may think. 

Except for the very largest products, developers will not be relied upon to train models or become AI scientists themselves. Instead, products will interact with large AI platform providers via API. This will resemble the cloud revolution, as software moved from self-hosted environments into the major cloud environments provided by Amazon, Google, and Microsoft. The tools provided by these platforms created major accelerators for developers without needing to manage the highly technical components of hosting at scale. GenAI platforms will be similar, but the impact will be much more significant than the move to the cloud.

An AI ‘Bot’ Marketplace Is Coming Sooner Than You Think

The day rapidly is approaching when AI bots will have their own marketplace, likely starting in the early months of 2024. We recommend preparing now for this opportunity.

Massive platform providers will create a marketplace where AI “bots” can be built and deployed for direct consumer or business use and/or consumed via APIs in other products. OpenAI has already laid the groundwork for this future with its release of features to build custom GPTs, and Google very recently did the same with AI Studio for Gemini. 

Think about Apple’s “App” store and how it transformed the market for digital apps. The speed and scale of a Gen AI marketplace will be mind-blowing. 

Some combination of OpenAI, Google, Microsoft, Apple, and Meta will provide demand-side aggregation for customers–as happens today for the Google Play and App Store–and there will be a rush to develop and deploy AI bots and agents via these stores to capture market share. 

This is a whole new horizon for digital products, both to exist in these stores and extend out to web-based and app-based products. Exactly how it will work and how it will be monetized is not fully clear. What is clear is it will happen quickly and soon.

Act Now to Stay in Front of the Gen AI Revolution

Whether you’re thinking about building a new digital product or have an existing product, Gen AI will be central to its long-term success. No aspect of digital product development will remain untouched. 

If you’d like to learn more about how Highland can work with you to stay a step ahead of the Gen AI wave, we’d love to hear from you.

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