Insights  /  The Lab

Every month in The Wavefront, I share what’s happening where culture and technology meet. At this constantly shifting edge, I help leaders and their companies find opportunities, manage risks, and stay ahead. I’m glad you’re here.

I’ve been navigating technology shifts for 25 years. This one is different.

Three years ago, ChatGPT brought AI from research labs to our devices. Today, it’s clear this isn’t a novelty. It’s the greatest disruptor most of us will experience in our professional lives.

I created this matrix to chart our course forward. I’m sharing it in case it helps you chart yours.

Mike Carnevale
mike@carnevale.co

The AI Process/Product Matrix reveals four paths. Three lead to obsolescence. One—using AI tools to build AI-native products—is the only viable future.

Using AI tools and workflows to build products that are fundamentally AI-native and couldn’t exist without AI.

This is the only path forward for agencies and companies that want to remain competitive. The defining skill is no longer technical expertise. It’s the ability to imagine and build products that couldn’t exist without AI.

Bespoke business applications solving problems too specific for the mass market (which are, in fact, most problems). Tools built for Nepalese cycling sherpas managing routes, logistics, weather forecasting, and client relationships. Designed and iterated onsite with the experts who use them, adapting to workflows that no platform company would ever address.

Generative interfaces that assemble themselves uniquely for each user. The same app delivers infinite experiences, reshaping its entire workflow based on your intent and context. Business travel gets high-contrast text and quiet workspace filters. Family vacation planning gets map-based exploration and activity overlays. The interface is as unique to you as your fingerprint.

Health platforms that return diagnostic power to individuals. Institutional-grade analysis running locally on your device, interpreting your biometrics, genetic data, and behavioral patterns to deliver recommendations tailored specifically to you. No cloud uploads. No data sharing. Your sovereign AI, analyzing your body’s signals in real-time, privately and securely.

This is how traditional platforms escape The Commodifiers trap (see below). This week’s tech-sector sell-off, prompted by the release of new legal capabilities from Anthropic, made this painfully obvious. LegalZoom must transform from transactional service into a deeply trusted legal partner delivering bespoke guidance. Intuit must evolve from tax software into a hyper personalized financial advisor. Expedia must shift from booking engine into a travel curator who truly understands–and not just stores–your specific preferences and constraints.

Every product, everywhere, will be reimagined. This is an extraordinary moment for those who recognize the AI wave as an opportunity to influence the future.

Using AI tools and workflows to accelerate the development of conventional software products and experiences.

The working title for this quadrant, the not-hyperbole-at-all “Commodified Death Spiral Passengers,” captures both the race to the bottom and the loss of agency that defines it. Most software companies are embracing this vector, chasing short-term gains in speed and cost, but there’s no competitive barrier here. Anyone can build anything, anywhere, and no one on this track controls their fate.

For product companies, the threat cuts more deeply. Software has historically been built as generic platforms serving the largest possible customer base. This approach was efficient, but the products it created were built for everyone and optimized for no one. Customizing these platforms for specific needs often costs as much as the platform itself: Salesforce implementations, EPIC hospital systems, enterprise resource planning. The promise was flexibility, but the stark reality was endless compromise.

AI exposes this fatal flaw. When customers can access truly personalized experiences elsewhere, why settle for generic platforms optimized for speed and cost? LegalZoom, Intuit, Expedia all face the same existential question: what happens when AI can replicate your feature set for free? Companies competing on efficiency are already losing. The only escape is complete transformation.

Attempting to build AI-native products using pre-AI era tools and workflows.

You cannot build products of this era using tools from the last one. A blacksmith cannot forge a silicon chip. A developer using traditional workflows cannot ship genuine AI-native products at scale.

This quadrant has one legitimate use: prototypes and proofs-of-concept, especially when you’re exploring experiences where appropriate tools don’t yet exist. But shipping and sustaining AI-powered products requires the processes of the current era.

There’s always another wave. The only question is whether you read it as the thing that washes away what you’ve built or the thing that lets you build your future foundation. It’s almost always both.

Traditional craft has always had a market. Paper catalogs still circulate. Mainframe banking still runs on COBOL. Vinyl records thrive in a streaming-dominated world, with listeners paying premium prices for the ritual of analog audio and physical media.

But choosing this path means accepting a specific trade-off. You decouple from the mainstream market. You reposition for a smaller audience with different expectations and a different economic model entirely. You become a specialist serving a niche. The question is whether you’re making that choice intentionally or just drifting into it.

At CARNEVALE, we’ve always been market visionaries. That’s why companies hire us. In our first decade, it meant creating rich narrative-driven marketing sites for the Grand Theft Auto franchise. Ten years later, it meant being an early leader in mobile tech, with multiple #1 apps in the App Store. In the early 2020s, it meant embracing our culture’s shift into digital immersion, with advanced products that blend IoT, XR, and 3D into seamless experiences for clients like Walmart, Honda, and Traeger Grills.

Today, we see the greatest opportunity for innovation since the debut of the worldwide web. Every digital experience will be reconsidered and reinvented. Our partners and clients seek market advantage by creating products that are hyper-personalized to each user, that deliver immediate value in ways traditional systems never could, and that unlock engagement opportunities impossible just months ago.

I created this matrix to chart the course for CARNEVALE and our clients through this next era. Not just to navigate it successfully, but to flourish by reading the terrain, capitalizing on opportunities, and steering clear of threats. To influence the future through better, more tailored, more useful, and more engaging experiences. Whether you’re leading a product team, running a creative studio, or managing technology strategy, these quadrants can help you find your line through the landscape.

This article previously appeared on The Wavefront.