Google AI Mode and Apple's software quality crisis
A new tool for product personalization, Anthropic's Chief Product Officer predicts the future, Stripe's annual letter unpacked
Hey everyone, Rich here with the weekly briefing. I hope you’ve had a great week and a warm welcome to the 300+ new subscribers who joined us this past week!
Coming up in today’s briefing, we take a look at some bold predictions from Anthropic’s CPO and Instagram co-founder Mike Krieger who has plenty to say about the future of product development. Plus, an intriguing set of new tools including a new startup that helps product teams build personalization features and a controversial tool that allows you to benchmark your engineering performance against other competitors in your industry.
We also explore the long-rumoured Google AI overview that was finally confirmed this week and what this might mean for SEO as well as some practical insights from Stripe’s latest annual letter and the latest App Notifications 2025 report.
Happy Friday and I hope you have a great weekend ahead!
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Key reads and resources for product teams
New from the Department of Product this week:
Knowledge Series - How to “vibe code”
Vibe coding is cringe. But it could also be the future of product development. In this Knowledge Series, explore real world use cases for product teams including building new prototypes, landing pages, dynamic components and more. Plus, we’ll take a look at a hypothetical end to end example to explain how each member of a product team (PMs, engineers, designers) might use vibe coding when bringing a new feature to life.
Deep - The UX of AI Assistants
The sparkle era is ending. Your ultimate guide to how top companies are designing the latest iterations of AI Assistants.
(Department of Product)
UX - How to think about scope for AI features
When designing an AI feature, its scope (how broad or narrow its capabilities are) influences its usability. Our research shows that narrower AI features are (typically) easier for new users to understand and adopt. NNGroup’s Kate Moran compares broad AI systems like ChatGPT with narrow AI tools like Spotify’s playlist generator, exploring how scope impacts design. (NN Group)
Interview - Anthropic’s Chief Product Officer on AI and product strategy
This interview with Anthropic's Chief Product Officer Mike Krieger explores where value will be created in AI, how foundation models are evolving, and the future of product development in an AI-driven world. Some of the most impactful predictions he makes include:
Models will differentiate, not converge - foundation models will develop increasingly distinctive characteristics and specialties rather than becoming interchangeable commodities.
Software development will transform fundamentally - developers will shift from writing code to becoming "delegators" who manage AI systems, focusing on high-level direction and review.
Product development requires new approaches - teams must design for non-deterministic systems, creating "scaffolds" around AI capabilities while developing new testing and evaluation methodologies.
(Twenty VC)
Analysis - Apple’s software quality crisis
Eliseo Martelli, a long-time Apple user, has always appreciated the integration of hardware and software that is the signature of the Apple ecosystem. However, recent experiences with his iPad Air 11" M2 have left him questioning whether Apple has lost sight of what once made their products great. (Personal Blog)
New product features and innovation this week
After rumours of its existence earlier a few weeks back, AI mode is officially coming to Google Search. Google says that AI mode is particularly helpful for questions that need further exploration, comparisons and reasoning. In the preview, it looks as though users can ask an initial question and then follow it up with further questions, with traditional search results appearing in a side panel that can be expanded. It also appears that AI Mode takes the first slot in the navigation, with “All” appearing second.
If this were to be replicated outside of this experiment, it would mark a significant shift in how Search as we know it works - with potentially catastrophic consequences for products that rely on SEO. Watch a demo of it in action here.
Gemini’s Live Mode will soon get live video and screen sharing capabilities that will make it possible to co-browser sites together and get recommendations.
Meanwhile…
Anthropic has launched a new version of its prompt console. Designed to be used by product managers and QA, the new prompt console is designed to work as an integrated place where all team members can work on prompts together for new AI features, refine them and share them with colleagues.
YouTube is preparing a relaunch of its TV app that will promote more alternative streaming services. At the moment, third party content is available in the movie and TV tab but the new change will see it featured on the homepage, too. YouTube is the most watched streaming platform in the US but is treading a fine line here; if the homepage is polluted by upsells for third party providers, it risks alienating users who simply want to watch their favorite content.
Salesforce has announced a new iteration of its AI agent product, AgentForce 2dx. The new iteration is designed to shift away from chat-based conversational interfaces and to allow agents to work in the background instead. A new API and no-code templates are released as part of the update.
A week after rumours that Instagram was spinning off Reels to avoid cluttering its core app, this week there are reports that it is considering adding Discord-like communities.
In other news…
If you thought OpenAI’s $200 a month price point was hefty, look away now. Their upcoming specialised AI agents are reportedly set to cost up to $20,000 a month. A “high income” knowledge worker could cost $2,000 a month with a software developer agent set to cost $10,000 a month and a PhD-level researcher priced at $20,000 a month. If one developer agent can eventually do the work of a team of 5 developers, I guess OpenAI can anchor its pricing in this way to sell it to corporates. OpenAI lost $5 billion last year and its transition to a for-profit can only really happen if it makes a profit, after all. But $20,000 a month does seem a little absurd for a PhD-level researcher.
Apple’s conversational AI version of Siri is reportedly scheduled for release in 2027. If that’s how long it takes to make sure it’s a lot better than Apple Intelligence then so be it.
How AI is transforming the software development process
Tools you can use
Crosshatch - turn on hyper-personalization in your product. Let users decide what information to share so that you can personalise their experience.
Quadratic - the AI spreadsheet with code and connections.
Prism - compare your developers’ productivity against industry benchmarks.
📈 Product data and trends to stay informed
Android users are still more likely to allow push notifications but new privacy rules requiring consent mean that the top percentile of users who opt in has dropped ~10% YoY. The average number of push notifications received per user is up from 150 to 162 for iOS users and up from 144 to 151 for Android users. Media apps send the most notifications with an average of 294 notifications a month. Full report from Airship on push notification benchmarks.
Stripe published its annual letter this past week. In it, they confirmed that Stripe is powering the AI boom and that the top 100 AI startups are achieving annualised revenues of $5 million in just 24 months in 2024 vs 37 months for the top 100 SaaS companies on Stripe in 2018.
Other stats from the letter worth knowing: Stablecoin transaction volumes more than doubled from Q4 2023 to Q4 2024, with 40 million monthly active stablecoin wallets. 99% of stablecoin balances are USD-based. Intercom increased its conversion rates by 2.1% with Stripe Billing. More than 700 AI agent startups launched on Stripe in 2024, with expectations that this number will be significantly surpassed in 2025
After topping the charts following its release, Grok has dropped slightly to number 6 in the iPhone App Store charts. ChatGPT has jumped back to number 1 and has recorded 400 million monthly active users for the first time. Report on generative AI Apps.
TkTok is projecting sales of $77 billion globally from TikTok Live according to a new lawsuit.
SEO is dying. 80% of users now rely on AI summaries at least 40% of the time. The rise of so-called zero-click searches has long been on the horizon but it looks like we’re finally starting to see some real world data on this. Some of the suggested actions from the Bain report to prepare for this zero-click world include optimising for AI crawlability and diversifying content formats. Full report from Bain Consulting.
Startup funding slowed in February, with $19 billion invested. AI and healthcare were the two leading sectors for investment.
A quarter of the latest Y Combinator startup batch have 95% of their codebases generated by AI.
Other product news in brief
🔓Apple is taking the UK government to court over its demands to access users' data.
🌍A new split screen mode is coming to Chrome.
💰The new startup founded by OpenAI’s cofounder is already worth $30 billion.
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