Creating Foundational Solutions
Lessons From Shopify, AWS, And Nvidia On Creating The Building Blocks Used By Other Businesses
One of the main questions product teams face is what problem should we solve.
Identifying the right problems is especially important for companies that create business solutions. These businesses want to spend their time, energy, and resources efficiently and maximize their productivity and profitability. Therefore, product teams need to solve important problems and create a measurable increase in business value.
Companies providing solutions for fundamental business problems can serve a larger market (compared to those focused on specific use cases) because they address the shared challenges across industries, functions, and applications.
I describe these as foundational solutions because they enable businesses to create, develop, and deliver products and services, regardless of their specific focus. I decided to explore how Shopify, AWS, and Nvidia are providing the building blocks to help businesses succeed.
I am eager to share the value of foundational solutions for companies creating B2B products and the businesses using them.
What I Will Cover
What Are Foundational Solutions - They are the tools and technology that allow businesses to address their core problems, regardless of their specific focus.
Companies Providing Foundational Solutions - How AWS, Shopify, and Nvidia provide foundational solutions for businesses.
Why Foundational Solutions Are Valuable - They provide businesses with the building blocks for businesses, address opportunities across multiple domains and potentially create full-stack solutions.
Foundational Solutions In AI - Large Language Models (LLMs) are the foundational solutions powering AI applications.
Takeaways For Product Teams
Conclusion
What Are Foundational Solutions
Foundational solutions provide the tools and technology to address core business problems.
Many businesses encounter the same basic operational challenges, especially those in similar industries or functions. While they have specific problems (based on their business, product, customer, etc.), they still need to solve their core problems first.
For example, all e-commerce businesses need the ability to set up an online store to sell their products to customers. While they might need different sales processes/channels depending on their products and customers, they still need the basic infrastructure to sell online.
Most companies build solutions to address a core problem (common across businesses), use-case-specific problems (unique to certain applications), or some combination of the two. Foundational solutions primarily address the core problems that different businesses share. They often take the form of platforms (Platform as a Service) or infrastructure (Infrastructure as a Service).
Companies Providing Foundational Solutions
AWS
AWS provides businesses with computing, storage, and network resources to build anything they want.
Amazon Web Services (AWS) is the world’s largest cloud service provider, offering over 200 services to customers globally. They support everyone from the fastest-growing startups to the largest enterprises to leading government agencies.
How does AWS work?
Traditionally, businesses needed expensive systems to support their software applications. This required heavy up-front investment in technology infrastructure and the ongoing expense of managing and maintaining these costly systems. Some of which they only used occasionally.
AWS gives customers access to the infrastructure they need when they need it. They provide businesses with resources on a pay-as-you-go basis. This allows businesses to only pay for what they use, which significantly improves flexibility and cost-effectiveness.
Benefits For Businesses
Speed & Scalability: AWS allows businesses to easily add or remove resources within minutes as their demand changes.
Reliability & Performance: AWS provides businesses with reliable high-performance resources that can be rapidly and predictably utilized.
Cost-Effective: AWS charges businesses only for the resources they use, with no long-term contracts or up-front commitments, making cloud services affordable and accessible.
Flexible: AWS provides a virtual environment that businesses can customize based on their requirements (with specific programming languages, operating systems, etc.).
Shopify
Shopify provides businesses with an e-commerce platform to sell products and manage their business.
Shopify is a complete e-commerce platform that allows businesses to build an online store, manage sales, market to customers, and accept payments in digital and physical locations. They provide an all-in-one commerce platform that connects sellers, developers, business experts, and shoppers.
How does Shopify work?
Traditionally, e-commerce businesses had to manage a variety of tools to effectively run their stores. It was challenging for them to identify, integrate, and manage all the necessary tools, especially first-time business owners.
Shopify provides customers with a platform to manage all their e-commerce activities, from receiving an order to post-sale analytics. Customers can sell on websites, marketplaces, social media, and even in person. They can also access additional services as their business scales.
Benefits For Businesses
E-commerce Ecosystem: Shopify helps customers online, offline, and everywhere in between by seamlessly integrating tools and channels in one place.
Global Scale: Shopify empowers customers globally to build, connect, and streamline their business as they sell and scale both locally and internationally.
Integrated Sales Solution: Shopify centralizes entire commerce businesses and integrates with various services to provide breadth and depth across channels, products, and experiences.
Customer Insights: Shopify gives e-commerce businesses insight into their customers through sales and marketing tools and analytics.
Nvidia
Nvidia provides businesses with the computing hardware and processing power to use AI.
Nvidia is a software and hardware provider that allows businesses to access accelerated computing capabilities. They are best known for providing hardware chips, called graphical processing units (GPUs), that provide the speed and computing power that AI models need.
How does Nvidia work?
Traditionally, businesses relied on CPUs for processing information. These devices excelled at performing actions (calculations, operations, etc.) sequentially (one after the other). However, AI models have to process a massive amount of information to perform complex tasks. CPUs are simply not able to deliver AI outputs fast enough to be truly useful to people.
Nvidia GPUs are designed to provide the speed and computing power that AI models need. These devices excel at performing actions in parallel (at the same time), which is essential for AI. They have become the preferred provider of AI chips globally due to their support for AI capabilities.
Benefits For Businesses
Performance & Cost Effectiveness: Nvidia chips offer AI businesses higher performance, which allows them to reduce the time, money, and resources spent on developing AI models.
GPU Specialization: Nvidia has three decades’ worth of GPU specialization, compared to competitors specializing in CPU, which are simply not able to match the performance of GPUs.
AI Focus: Over the last 10 years, Nvidia has taken the lead in producing chips that can perform complex AI tasks by investing in developing chips specifically for these applications.
Why Foundational Solutions Are Valuable
Providing Building Blocks For Businesses
Foundational solutions are the essential things businesses will need matter what their goals are.
Businesses have to rapidly adapt as market trends and customer demands evolve. Their targets are often moving, multiplying, and changing, while the demand for accuracy is higher than ever. Foundational solutions represent the things (tools, technology, resources, etc.) that businesses will need to hit their targets, no matter what those targets are.
“During the gold rush, it’s a good time to be in the pick and shovel business”
Major companies recognize the importance of foundational solutions. For example, Andy Jassy (Amazon’s CEO) emphasized the value of foundational building blocks used to create complex solutions last month in his 2023 Letter To Shareholders. Amazon knows that most AI applications will be built by other companies, but they want to provide the foundation for this technology.
Note: Check out my full post on Amazon’s approach to GenAI here.
Addressing Opportunities Across Domains
Foundational solutions address problems and opportunities for businesses across different domains.
In comparison, foundational solutions are designed for many different scenarios. They are usually called platform (Platform as a Service) or infrastructure (Infrastructure as a Service) applications. These are usually harder to build because they focus on addressing a core business need and completing a wide range of tasks. However, these solutions can address opportunities across multiple domains.
Creating a tool for someone is often harder than just doing the job for them. However, a tool is often more valuable because it allows them to do things themselves.
Most of our applications are designed only for specific use cases (ordering food, requesting rides, etc.). These are called SaaS (Software as a Service) applications. They are usually easier to build because they focus on addressing specific problems and completing a well-defined task (or closely related tasks). However, these solutions can only address opportunities within their specific domain.
Creating Full Stack Solutions
Foundational solutions can potentially give businesses a complete solution for all their needs.
Foundational solutions serve as a base for companies to add additional products and services. They have the opportunity to improve and expand their offerings over time. As capabilities are added, businesses can potentially solve all their problems using a single foundational solution.
For example, while AWS initially just provided businesses with technology infrastructure, they have since expanded to include over 200 services, allowing their customers to fulfill most (if not all) of their technology needs. Similarly, while Shopify initially just provided an online storefront, the platform has evolved to include every possible service an e-commerce business might need.
Foundational Solutions In AI
Large Language Models (LLMs) are the foundational solutions powering AI applications.
Major technology companies (such as OpenAI, Google, etc.) recognize that the real opportunity is giving people the ability to solve their problems rather than solving all their problems for them.
OpenAI is the world’s biggest AI company right now because ChatGPT- their Large Language Model (LLM) - allows people and businesses to use AI in many applications and use cases. LLMs are the foundational solutions that allow AI applications to accomplish complex tasks. Companies are making massive investments in LLMs because they are critical building blocks for AI applications.
As companies build AI products for almost every aspect of our lives, the value of the foundational solutions they will need will only continue to rise.
Takeaways For Product Teams
Why foundational solutions are important for companies making B2B products:
They can address shared problems and opportunities for businesses across different domains.
They can provide the essential things businesses will need matter what their goals are.
They can transform into a complete solution for all business needs in the long run.
Why foundational solutions are important for B2B customers:
They can serve customers and deliver products/services with greater speed, scale, and flexibility.
They can cater to internal and external needs without purchasing separate solutions.
They can cost-effectively access the resources, tools, and technology they need.
Conclusion
People and businesses are demanding compelling solutions with a high level of personalization and flexibility. As the global enterprise software market reaches almost $300 Billion, it’s clear that solving complex business problems is highly valuable. However, instead of targeting specific problems in overcrowded markets, it might be more valuable to target the core problems different businesses share and provide the solutions they need to reach their goals.
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References
Foundational Solutions
AWS
Nvidia
Illustrations from Blush Design and FigJam