The Rise of User Generated Software (UGS)

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OpenAI announcement in a nutshell

Earlier this week, OpenAI announced the rollout of GPTs and the GPT Store.

GPTs are custom versions of ChatGPT that anyone can create for specific tasks, such as learning the rules of a board game, teaching math, or designing stickers.

We already saw something similar when OpenAI introduced plugins to ChatGPT. However, the potential game-changer with GPTs is that they can be created through careful prompt engineering alone, without any coding skills, and can be customized for personal use, corporate application, or public utility.

And no ecosystem would be complete without an economy to make it flourish. Enter the GPT Store, OpenAI's version of the Apple and Google App Store.

According to OpenAI, the GPT Store will feature creations by “verified builders” and will allow GPTs to become searchable and climb the leaderboards.

However, unlike the app store where the platform takes a cut from every transaction and the creators retain the ownership and the majority of revenues through direct sales, in-app purchases, or subscriptions, the GPT Store will operate on a model more akin to YouTube and TikTok.

Content creators on YouTube and TikTok earn revenue through ad shares, views, and creator funds. In the GPT Store model, it seems that creators will earn a distribution of the revenues based on the popularity and user engagement with their GPTs, encouraging the creation of GPTs that are not only innovative but also widely appealing and used.

Why This Could Be a Big Deal: The Rise of User-Generated Software (UGS)

The rollout of GPTs and the GPT Store could be the beginning of a new type of economy.

Remember when making a video required a whole crew? Now, all it takes is a smartphone.

When technology became portable, social media platforms like YouTube and Facebook sparked the 'creator economy,' enabling monetization through user-generated content (UGC).

Instead of costly ad campaigns, brands now tap into the power of everyday creators—people just like you and me—to showcase their products within our social feeds.

Similarly, OpenAI appears set to financially reward top creators who develop software applications powered by ChatGPT, through revenue sharing.

I think of UGS as software artifacts like apps, bots, and AI assistants created by everyday users like you and me leveraging platforms and tools like ChatGPT.
In this scenario, software isn’t just consumed but is actively shaped by its users, breeding a market of hyper-specialized tools and shaking up the traditional models of software development and distribution.

In this burgeoning ecosystem, communities will likely become power players, pooling resources to create more sophisticated apps, powered by larger data sets, that can compete with large companies. The collaborative spirit among creators could lead to a suite of tools with greater capabilities than those developed in silos.

Yet, as with UGC, UGS is not without concerns. The lowered barriers could result in an oversaturated market filled with low-quality or superfluous tools, complicating discovery and quality assurance processes, as we have seen with ChatGPTs plugins.

Unlike UGC, which largely revolves around creative expression, UGS involves creating functional software. While GPTs simplify aspects of development, a degree of specialized knowledge remains indispensable.
For example, scaling and maintaining software without dedicated engineering teams poses challenges. User-generated tools would need capabilities like automatic updates and bug fixes. There are also security and data privacy risks if inexpert creators build tools with vulnerabilities. An unstable personal finance app could potentially expose sensitive user data.
I’m not sure how OpenAI has planned to deal with those issues.

For all its potential downsides, I believe UGS might have an impact similar to Kindle Direct Publishing and e-commerce platforms like Etsy and Shopify, revolutionizing their respective industries by empowering individuals to bypass traditional channels.

What are your thoughts on UGS and its potential? Leave me a comment or send me an email with your thoughts.

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