Software Adoption Stages: Capability, Value, Scaling

This quote captures a fundamental truth about how software products evolve and gain adoption in the market.

The Three-Stage Evolution of Software

• Capabilities stage: The initial phase where the focus is on what's technically possible—what the software can do and create
• Value stage: The transition to demonstrating how these capabilities translate into tangible benefits for users
• Scaling stage: The final evolution where the product expands to address more aspects of users' lives and work

Why This Matters in Product Work

This framework provides crucial guidance for product strategy at different stages of maturity:

• Prioritization clarity: Helps teams understand which questions to answer first (can we build it? → why would someone use it? → how can we reach more people?)
• Expectation setting: Prevents teams from prematurely focusing on scaling before establishing value
• Investment alignment: Suggests where to direct resources based on your current stage

Applications for Product Leaders

• Strategic planning: Use this model to assess where your product truly sits in its evolution
• Team organization: Structure teams differently based on your stage (innovation teams for capabilities, product-market fit teams for value, growth teams for scaling)
• Investor conversations: Frame your progress and needs using this model to set appropriate expectations

Applications for ICs

• Career development: Develop skills matching your company's current stage
• Feature development: Ensure your work aligns with the appropriate stage questions
• User research: Focus questions on capabilities ("what's possible?") in early stages before shifting to value ("how useful is this?")

The quote is particularly relevant for AI products, where the capabilities are evolving rapidly, and companies must continually re-establish value before they can focus on scaling—creating a compressed cycle through these stages that repeats every few months.