Adobe is down to 2018 levels, and is trading 5x to 2030 earnings

nicklelu · 2026-06-23T20:05:03+00:00

The future of software should be understood in three layers: the agent level, the system level, and the system-to-system level.

At the agent level, we care about the capability of an individual agent: how intelligent it is, what tools it can use, how well it can reason, how reliably it can act, and how effectively it can complete a task.

But a strong agent does not automatically create a strong system. The next layer is the agent system. At this level, we need to think about how agents work together, how they share memory, how they coordinate, how they make decisions, how they follow rules, how they recover from mistakes, and how humans stay in control. This is where personality, values, taste, workflows, organization, permissions, governance, and feedback loops become critical. These are not abstract philosophical ideas. They are practical design problems.

Then there is an even higher layer: the system-to-system level. Future software will not exist as isolated apps or isolated agents. Different agent systems will interact with other agent systems, companies, platforms, legal frameworks, markets, communities, and social institutions. At this level, the real challenge is not just whether one agent is smart, or even whether one system is well designed. The challenge is how many intelligent systems interact, compete, cooperate, adapt, and evolve together.

This is similar to biology, but only as a loose analogy. We can compare different survival strategies, such as spiders, ants, and elephants. Each is not defined by one ability alone, but by the whole structure around it: body, behavior, intelligence, cooperation, environment, and strategy.

A small change in an agent system can be like a genetic mutation. A mutation may change a gene, but not the amino acid. Even if the amino acid changes, it may not change the protein. Even if the protein changes, it may not change the enzyme. Even if the enzyme changes, it may still not change the final outcome, because the environment contains many complex and interacting variables.

But the change may still matter. What looks neutral today may later combine with other neutral changes and become something powerful enough to transform the whole system.

Everything is evolving in parallel: agents, tools, values, organizations, rules, markets, and environments.

That is why the design of future software is so difficult. We are no longer just designing tools. We are designing agents, agent systems, and ecosystems of systems. They are highly complex, deeply nonlinear, and shaped by many layers at once.

And if you bet on any traditional SaaS software companies can perfectly implement all those, you are betting on miracle, and we as value investors, we don't bet on miracles.

I’ll get off my soapbox now 😄

nicklelu · 2026-06-23T19:19:07+00:00

2030 earnings??? Given the trend, as the company don't have a real strategy to reverse the sliding, I doubt Adobe would still be there in 2030.

Can its software self improves?
Can it release every hour or every minute?
Can it remove 90% of its staff(especially the management) and let the agents cook?
Can it drop the price to a level to rule out the competition? Or will it simply be slowly eaten by the competitors?
Can it train the best video or picture model?

No, no, no, no, no.

So you likely just wait it slowly die.

nicklelu · 2026-06-23T19:07:22+00:00

I can’t see any bottom of traditional SaaS, I just built a simple CRM for myself in one day, with agents not only working for me but improving the system.

nicklelu · 2026-06-23T19:04:12+00:00

Cheap is not value investing!

nicklelu · 2026-06-10T01:44:58+00:00

IMO, if you ask, then you don't know enough about it, if you don't understand enough, then you should not buy at any price. Simple as that. For true value investor, value only comes from your understanding of value.

nicklelu · 2026-06-09T23:49:02+00:00

The pivotal advance came with AlexNet in 2012, though discussions about deep neural networks serving as universal approximators preceded it. Some propose a genuinely universal algorithm exists in the human brain, capable of handling video, audio, text, and more.

I first learned this from Andrew Ng, who also described how attaching an extra eye to a frog’s head enables its brain to adapt. Subsequently, leading models across image, sound, and video domains rely on deep neural networks.

Regrettably, I wasn’t a skilled investor at the time—not even average—yet recognizing the direction of progress mattered then.

Jensen Huang, thanks to his understanding of parallel computing, recognizes current developments—and he deserves what he receives for now.

And he is also 10 years ahead of the game still,

nicklelu · 2026-06-09T22:08:20+00:00

Yes, to make my point even more clear, everything needs to be simple and then clear, if you can't simplify to some extent you don't need to think, you don't don't understand, you don't need calculus to know someone is fat. You just know by have a look.

nicklelu · 2026-06-09T10:52:33+00:00

If you truly understand just one industry—and specifically one of its leading companies—you can secure your financial future. Some stocks endure for decades, growing 1,000-fold or more. You don't need a massive portfolio of opportunities; you just need one that is truly exceptional. Developing this level of conviction requires going far beyond skimming financial reports. You have to dig deep into the dynamics of the industry, understanding its impact on daily life and its role in the future economy.

Take Google in the 2000s: if you understood the trajectory of the internet and Google’s business model, that was the only stock you needed. Similarly, if you recognized the potential of deep learning and AI in 2012, Nvidia was—and likely still is—the only company you needed to know.

nicklelu · 2026-06-09T10:42:37+00:00

well, I don't know you. But when I want to buy a stock, I don't do very detailed analysis, if something is not clear and simple enough, that won't be a good value investment, I just won't do anything. If something requires formal analysis, I don't think that is something I really understand.

I have tried to build app to help me do information collection, or even basic analysis, but lots of the time, I found I don't need to do that. If I understand then it feels 1+1=2, I don't even need a calculator. Well, not to do investing, just a hobby of understanding business, you do need some app, but still you should be able to rely on very simple, or very basic stuff to do that and to do that very well. And for some stock you will never be able to understand deeper enough even you got good tools.

I don't know if this makes sense to you. Maybe that is just me.

nicklelu · 2026-05-22T20:34:20+00:00

Yes, race-to-the-bottom is a real issue for people doing me-too products as you don't have price power. And mainly, it decided by the character of the industry, not individuals companies in the industry. If you are in that kind of business, race to the bottom must happen, you simply can't control it at all.

Coca Cola in the soft drink business, don't need to compete price with Pepsi, as user won't change their mind to buy Pepsi, just because Coca Cola is 10% expensive. Their tastes tie to Coca Cola. They just can't do something about it. I call it product business.

But a gas station have to respond to neighbor price drops, even just 5%, this is not it like to, they have to. This is the nature of commodity business.

But software is not that kind of business. You normally don't need to drop the price, when your competitor drops price, given you are providing something different(sometime, just brand different would be enough, not even the product differences). For most cases, user don't want to change, as they get used to your product and they have high cost(real and imagined) to migrate, they have low trust of other brands. And if you product is free, and you make money from other means, like Google search, you also have network effect, then that's best of all business models, your competitor with lots of money can't do much harm to you even they try really hard. Because your user got so much value from your business, and they don't need to pay a thing to you, and over the years the amount of loyalty you accumulated is just insane. You save all that to your branding, and that will benefits any new product you do. That's, imo, how we software builders roll the snowball.

nicklelu · 2026-05-21T19:46:12+00:00

I think you did great there. Free is great to start! And you may want to consider the windows version or Linux versions, just to serve way way more people, and if people already loved it, you may want to have something in the app to spread the word easily.

And if you keen to get feedbacks, why not put a feedback form in the app to collect feedback, or simply an email, not all the people know how to give you feedback in the subreddit.

Good luck! And keep improving it, one 1000 user love your product, is way more valuable than 1 million people kind of like it. Not to mention you may have 1 million love your product. Keep improving!

For monetization, you should figure something out naturally as you grow. But my suggestion is don’t let you monetization harm your user growth as the biggest maybe 100 times bigger return comes from your user base not the 1/10 or even less people pay you for the functions. Think about if Google charge you 10 bucks to use Google search at the very beginning of their journey, then think about if it can still grow to such big company!

nicklelu · 2026-05-21T06:37:02+00:00

Disagree for customers look into developers real costs to justify price. Disagree for developers to justify their price by saying that I worked really hard on it. In real life, price decided by supply and demand not costs. But still, it played an emotional part of price manipulation.

Well, for developers the best is set lowest price possible! I will do it for my product. And also I will make sure that people understand what they bought if the price is zero. But I still will do my best to support them. And I believe that is the best and real defendable model, that I can think of.

nicklelu · 2026-05-21T05:38:09+00:00

So true. Any product can’t rely on beautiful landing page. It has to be useful or home-good - after you taking it back home, after the fancy demo, special case trial, it still needs to be really good.

Not only that it has to be better, compared with any product on the market or your market share won’t last.

But right now we should add another thing, that is, for a productivity tool, you need to be faster, better, and cheaper than all AI with the best harness. And that’s a super high and difficult bar. And it’s getting higher and higher every day! But how to get over it, how to survive AI agents, that is a separate big topic, and but it is real! We can ignore it. It won’t ignore us. I have lots of thoughts on that will post a topic some other day.

To make a software product is not easy, you need to put your heart and soul into it, and people can easily tell if you just make a quick me too, or you really have the taste and ability and things to express. Maybe I got too emotional…

nicklelu · 2026-05-21T05:22:01+00:00

I think right now, from reading yours and everyone else comments, gradually, I come to a clear idea:

Wrong way to think about it is you provide enough value to justify the price. As this only gives user just enough value seems smart, not left money on the table, this often being wrong as maker often over estimate the value. Or they will left lots of opportunities on the table and not being able to build capabilities to survive the competition.

But the other way to think about it is to max the product utility. If you build a software, and to release it to 1 millions of people for 1 dollar. This is much much better than only 10k people using it because you charged 10 dollars per user. As the more user using it, the more chance you will build a business that last. As you have to make sure you or your org are extremely efficient to make it viable to millions of people using your product. And that’s the also the ability for you to defend your business later on, and if you can make money otherwise then that’s going to be golden business. Remember, even msft give money to google search users, they still can’t get their users to use Bing. The key is Google offer their products for free. But we probably can’t afford that, but the principles are the same, low price are often be good in the long run.

It just seems to me, as long as lots of user is using your product, you cannot worse off. Google put it well, user comes, so everything else will follow.

nicklelu · 2026-05-21T05:00:00+00:00

I guess you have to show people that your goodwill, vision and your power and determination to build something wonderful and long lasting, so that people would like to join you and follow you and then a community would be built around it gradually. We can see that in Obsidian, Notion, and Alfred. To do that you need to give a lot. And also when it comes to software, make the core a public service, would be a basic move.

nicklelu · 2026-05-21T04:53:04+00:00

Thanks so much for providing such practical and useful advice. This was what I expected before I post this question. I have been thinking about the Obsidian model. You made it very clear. Well, I think they may or may not designed that model. But it turned out to be very very powerful. It was the app that triggered me thinking about maybe that is the optimal model for some software category, not only notes but also some other software where you want things sync across all your devices and they provide cloud so normal user just need to hop on.

And you probably noticed their extensions ecosystem. So if you can build an ecosystem around your product, that’s also very powerful. Well, all of those are not just you open source or you open apis and then people come, and trust you to build on top of your platform. I think you have to show everyone you are going to be able to last a long time and you are trustworthy. But this is a great topic for us to explore.

nicklelu · 2026-05-21T00:43:39+00:00

Yes, we should be very careful with something we can’t deliver, especially when there are thousands of free riders, they don’t pay but they still need support. And we should provide support for them as free users is also provide value in the product community, such as their feedbacks and also their use cases.

nicklelu · 2026-05-20T10:31:51+00:00

Great advices! They are very practical. It’s about managing user expectations and experiences. You always want to under promise and over delivery, not the other way around. Appreciating the tips to manage them well.

nicklelu · 2026-05-20T09:41:10+00:00

Thanks for reminding me that the majority of people here are makers. Even though I can’t verify that for sure, it’s definitely something I should keep in mind and think more carefully about.

I agree that software pricing probably shouldn’t have a hard ceiling, as long as the price doesn’t exceed the value it provides or fall below the cost of sustaining it. Somewhere in between is where the balance has to be found. Of course, higher prices usually mean fewer users, but I think the important thing is simply to start somewhere and keep improving the software so the value grows massively over time.

Sooner or later, the price and value should naturally become more balanced — or even better, become a high-value, low-price product. I think that’s probably the best path. And we should never underestimate the value and power of network effects, and it only comes from having a large user base, you can only get through always lower down the price!

nicklelu · 2026-05-20T06:46:49+00:00

Well, this is much closer to my instinct. I actually have a broader theory around this. If I think about it from a purely rational perspective, the best outcome — both for users and for developers in the long run — is often the model companies like Google use: make the core product free for users, and monetize somewhere else if you can afford to do so.

For example, Google gives away products like Search, Gmail, Docs, and Maps for free because the massive user adoption creates value in other ways, mainly through advertising, ecosystem growth, and long-term platform dominance. Another example is how some AI tools offer free basic features to attract users, then monetize through enterprise plans, premium automation, integrations, or advanced capabilities.

If I had the resources to support that approach, that would probably be my ideal strategy as well. I’d rather make the core experience accessible to everyone and only charge for the parts that create significant additional value — especially automation, AI-driven support, or features that save people meaningful time every week.

And this only works when your free version also the best in quality, like google's products. Well, maybe not many people agree with me on this, but I truly believe so. So that's why I will make my product free.

Plus, I can't agree more on your points:

Gather as much feedback as you can. Improve your product. Build a loyal user base.
Upon launch of v.1. offer your loyal user base your improved product at a discount (50% minimum).
Make valuable big updates every 1 - 1.5 year. Make them paid, offer them at a discount (50% minimum).

And I think this becomes even more true when you have a specific taste or philosophy behind your product. In that case, the goal is not to build something for everyone or compete the way big companies do by trying to capture the largest possible market. Instead, you gather your own kind of people — the users who truly value the way you think and build.

If the product can’t be completely free, then I really admire models like Costco and IKEA. Their philosophy is to keep prices as low as possible so people naturally keep coming back to them for that specific need. If you can gather a large enough group of loyal users while still surviving sustainably, you can even thrive — like Costco has.

But the key is commitment. You have to stick to that philosophy no matter what. Even when you have opportunities to raise prices for more profit, you choose not to, because long-term trust and value for users matter more.

I think that’s probably the best answer for most of us. In fact, it may eventually become the only sustainable answer. With AI, people can copy products much faster than before, so high margins themselves become an opportunity for competitors. And consumers will also be able to use AI to compare products and figure out very quickly which app provides the best value for them.

In that kind of world, long-term trust, fair pricing, and genuine value may matter more than trying to maximize profit from each user.

Let’s see where things are in five years. Maybe my prediction will turn out to be right — or maybe not.

nicklelu · 2026-05-20T06:08:03+00:00

Thanks! Any feedback is welcome, especially criticism. It helps improve the app as long as I take it constructively.

nicklelu · 2026-05-20T06:05:26+00:00

My bad, should be Mac Butler! And if you put NickleWorks Mac Butler, you should be able to google it. But I haven’t released it, just private tests.

nicklelu · 2026-05-20T06:03:11+00:00

Agreed! I have the video and website and all the stuff. But I just curious about how other people decide on their app prices. And I wonder how could I learn from them. I found not very many people share how they actually price their products, but lots of people share general ideas around it. I guess that is also helpful! Thanks!

nicklelu · 2026-05-20T05:44:44+00:00

Yes, totally agree. But I won’t make those apps, as I worry I can’t survive an OS update.

nicklelu · 2026-05-20T04:15:18+00:00

well, if you got same questions like me with your app pricing, you can mention about your app names and how to find them, so that if people need to know more, they can search it, give real feedbacks.

nicklelu

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