Beware Flavored Software

One day 10 years ago I stood in an hour-long line outside an ice cream shop near Dolores Park in San Francisco, and at the end I was greeted with options such as “black sesame” and “balsamic strawberry.” Apparently this place was known for its unique flavors. The good news is that the balsamic strawberry ice cream was delicious. The bad news is that it planted an idea about competitive differentiation in my head that clouded my thinking for years.

I consider myself a creative guy—I get excited about clever food, art, apparel, architecture, music, packaging, writing, and so on. But because I make software, I have a special place in my heart for clever apps. Unfortunately, though, they usually don’t make great businesses. The older I get, the more I appreciate the merits of vanilla software. There is money to be made in boring.

What is flavored software?

Software that attempts to be different in a way that creates temporary excitement, but doesn’t create lasting value, is what I call “flavored software.” Of course, no one thinks this is what they’re building. They think their unique twist is a revolution, and that everyone will adopt their innovation in the future. But sadly, more often than not, they’ve invented the software equivalent of balsamic strawberry ice cream.

The agonizing thing about balsamic strawberry is that it’s actually good. You show it to users and they’re like, “Wow, tasty!” But because it’s software and not ice cream, it’s less obvious that it’s never going to beat vanilla. These apps can even grow substantially if the new flavor is good enough, but they often have trouble sustaining growth.

Product categories that tend to be flavor-based include podcast apps, notes apps, and to-do list apps. I have no disrespect for creators of products in these spaces, so I won’t reference specific names. But for each category, I'll talk about why I think products in it tend to hit early growth asymptotes. Then I’ll extract some general principles for distinguishing between mere flavor differentiation versus scalable value. As a bonus, I’ll pick a few current ideas that seem huge but I predict are just the flavor of the month (sorry, AI avatar makers, I’m looking at you 🥲).

One caveat: this analysis only applies if you want to build a VC-style business that might go public or have a significant exit. If you want to build something awesome and make enough money to live a great life, feel free to disregard it. There is a lot of joy (and cash) to be had by selling balsamic strawberry ice cream, as long as you keep your costs low and don’t raise money from investors who are expecting you to disrupt vanilla.

Example 1: Podcast apps

There are a lot of great podcast apps out there. Unfortunately none of them are great businesses. These two facts are linked.

It’s relatively easy to make a podcast app. You can scrape Apple’s directory and instantly have a library full of all the content any user could want. As a result, developers have created a cornucopia of fun new ways of listening to podcasts. Some apps have custom playlists, others focus on discovery, and there are even some that have created custom audio engines to make the podcasts sound better. Even design details, like the home screen as a beautiful grid of podcast art from your favorite shows, can be enough to capture the hearts of tens of thousands of users.

None of these apps has achieved significant market share, except those that leverage pre-existing power from an adjacent domain—like Apple’s control over the iPhone and Spotify’s popular music app—to grow their podcast user base.

So why haven’t any of the smaller podcast apps been able to discover features that propel them past their initial niche? For three reasons:

When they do discover a feature that is not just a “flavor of the month” thing (like speeding up audio), it gets copied by every other app.
Most features they discover are only interesting to a subset of users or are only mildly useful, and not enough to get people to switch from an app they’re used to.
A great feature is not the same thing as a great growth engine (aka marketing channel), and the types of founders that are focused on the former tend to neglect the latter.

(These ideas are applicable across all categories, not just podcast apps.)

Example 2: Notes apps

Most notes apps like to pretend they are defensible because they have “switching costs”: they think you’ll be reluctant to leave once you fill them up with notes. But in practice, there isn’t much evidence that this is true. In fact, I would argue the opposite: there is a subculture of people who are note-taking enthusiasts, and actively enjoy switching apps and trying new flavors. (To learn what drives this behavior, I recommend reading Dan Shipper’s essay, “Dopamine Stacking.”)

Coming to market with a strawberry balsamic note-taking app and then getting sad when your users churn is like being the frog that let the scorpion ride on its back across the river: