In Part 1, I made the case that despite all the news, the rules of the game aren't changing.
You still need to find an arbitrage, build distribution, and protect it before it gets competed away.
This post is about what that actually looks like across the three levers that matter: User acquisition, Creating user value, and Monetizing that value.
Velocity Still Wins, But the Bar Is Higher
From what I see in companies, teams that ship the fastest are the most successful. Hands down.
Of all the companies that I've worked with, those that ship multiple times per week are much more likely to hit double digit growth numbers, raise money, get acquired, etc.
Velocity is relative. There is no "fast enough."
You're in a race that you need to win. There is no "acceptable speed", there is only faster than your competition.
With AI, the obvious move is fewer employees doing more, but that's only partially right.
If you've touched Claude Code or Cursor, you already know you can work 10-100x faster than before.
The temptation is to do the same work with 10 people instead of 100. That's going to happen — Block just fired half their staff.
But the best path is 100 people moving 100 times faster.
Speed only matters with direction.
The constraint isn't shipping anymore. It's knowing what to ship.
The work that was always important — defining the right metrics, knowing your highest-LTV persona, building a proper north star — becomes more important now.
Measurement compounds the velocity advantage.
The product development loop hasn't changed: Ideate → Decide → Build → Measure → Learn → Repeat.
Companies that can validate faster can ship faster. That means traffic volume matters more, frequent-use products have a structural advantage, and the discipline to ship with a measurement plan in place is more valuable than ever.
Acquisition: Distribution Matters More, Channels Shift
Free products are about to multiply.
It's cheaper than ever to build software, so the incentive to launch a free product that cannibalizes a competitor's paid product is stronger than ever.
At Codecademy, we spent 30-40% of engineering capacity on the free product — deliberately, because it built the brand and the funnel. A lot of new entrants can now do that for much less.
If your paid product competes in a category where a good free alternative can exist, you need to be thinking about that now.
CAC is going up in most channels.
More competitors entering more markets means more competition for the same attention and ad inventory.
This puts more pressure on monetization — specifically on shortening payback periods. You can't afford to wait 18 months to recoup your CAC when CAC is rising and churn is still churn.
Not all acquisition channels are equal here.
Paid ads get more expensive as competition rises. Content SEO is also getting hit — AI-generated content is flooding search results.
The channels that hold up best are the hardest to replicate: brand, word of mouth, community, referral loops.
Brand is one of the few genuinely defensible things in this environment.
When every competitor can ship a comparable product quickly, trust is one of the things that can't be copied overnight. Brand compounds in a way paid channels don't — lower churn, higher referral rates, better conversion, all at once.
User Value: The Bar for PMF is Moving Up
"We're the only team that can build this" is no longer a moat.
If your defensibility was execution speed or engineering talent, that moat is shrinking. You need to be thinking about the other kinds: network effects, switching costs, proprietary data, brand.
The average product quality is going to rise dramatically across every category.
Think about what happened to physical goods when mass manufacturing arrived. The cost to produce quality dropped, and the definition of "good enough" reset upward permanently. The same thing is happening to software.
More product choices means onboarding & faster time to value is key.
When users have more options, evaluating them gets harder. You have maybe 2 minutes on day zero.
Data from RevCat's 2025 State of Subscriptions shows roughly 80% of users who start a trial do so on day zero. If you don't activate them immediately, you don't get a second chance.
Nuanced understanding of the problem matters.
Understanding why a user showed up, what problem they're trying to solve, and getting them to their "aha moment" — this work becomes foundational.
Monetization: More Important than Ever
Winning monetization allows you to win distribution.
"Whoever can spend the most to acquire a customer wins" — this Dan Kennedy quote is more true than ever.
The better you are at making money from your users, the more you can spend on acquisition.
Get to monetization best practices ASAP.
Setting up smart payment retry logic, building a proper cancellation flow, running pricing tests — this used to require meaningful engineering investment. That barrier is dropping.
Move up the value chain or get squeezed.
If your product takes on more complex, higher-stakes work, you have more pricing power than ever. Software is going to start taking over more complex tasks, which means budgets that are usually reserved for salaries.
What's Next
The companies that win through this shift treat it as an accelerant on the fundamentals, not a replacement for them.
Move faster on the work that was already important — churn reduction, monetization optimization, acquisition efficiency. Invest in measurement. And keep moving up the value chain.
More on the long-term defensibility side in Part 3.
Originally published on Subscription Index.
Top comments (0)