This Will Get Worse - For Everyone!

Who knew that having significantly more users would mean you would earn much less money? This has caused Tailwind to lay off 75% of their engineers. But let's see how they made money in the first place. It's basically a utility class library. So instead of writing CSS, they have a bunch of classes that determine this is display flex, flex direction column, uh align item center, various things like that. It just means you don't write a lot of CSS. Traditionally, uh, back in the old days, I would, if I'm using Tailwind here, I would come to these docs and I would look at I would press command K cuz they got a lovely um, search thing here. If I want to do some box shadow, I'd search box shadow uh, box shadow and I'd learn a little bit, you know, how to how to customize the box shadow and what it all does. And it's a great place to to learn how to use it. thing is if you've been using AI to do any sort of coding recently whether you know or not AI is probably choosing to use uh Tailwind to do all of your CSS or all of your all of your styling and stuff like that. And what that means is is that I'm not now long I'm no longer coming to this because instead of learning how to you know how to make the box shadow bigger by going box shadow MD or make it inset um I'm just asking AI to do it for me and it's just figuring out all of the classes. And what you might have noticed or you know they don't obviously don't want to push it too hard but what you might have noticed is that there's opportunity here to click plus and because this is an open-source framework this is all free but how they make their money is things like this um Tailwind plus which is sort of advanced component system which uses Tailwind and people can buy these and and this is this can boot companies can bootstrap uh with with this library to help kick start their product, but they don't need to do that anymore because AI is taking care of it for them. Plus, you're not coming onto this website to even know that it existed in the first place. Similarly, if I go let's try a different um thing. This is one of their this is their book, but this is another way that they can make money. and you're finding out about about all of this when you're on the website, when you're going to the website, but alas, AI is preventing you from going to their website and and therefore converting as a paid customer. So the paradox here is that whilst if you were to look at the number of users or number of downloads of of Tailwind, you'll see that massively increase over the last, you know, couple of years. But what you're also seeing is conversely is the income and the the well yeah the income from the company is going down and that what that's meant is their co-founder Adam has come to this realization. It all stems from this gib GitHub issue which was closed which is just a small text file that allows the documentation to be more easily understood by LLMs. And there's been a lot of uh frustration from the community as to why this hasn't been merged in. And it all stems from Adam coming to realization that basically says it's something he really wants to add, but he's just had to lay off 75% of their engineers because they he's witnessed that they've only got 6 months worth of runway left in their of of revenue in in the company. So to protect the company, to give the engineers a a severance package, he's had to make the harsh decision to fire. I mean, they only had four engineers anyway, but they've had to fire three to save that and to give them severance. Um, and also just the fact that this is this is supporting the very thing that is killing the company. So whilst he's not completely ruled it off the he's not removed it from the table, it's like I we have more important things to to figure out right now and that is how are we going to make money given that we are used so widely on the web right now because of AI. So it's a real tricky situation and I think more and more companies are going to see this trend uh this this difficult situation where the traditional model for earning revenue which is open source something give something away for free. Nex.js being a perfect example of that you use Nex.js here have Nex.js totally free but where do you end up using that? you end up using on Versel and you end up paying for. So there's payment on that back end which is you know fine this is this is business this is how it works you you feed the free thing you get the money on the back end but now this is no longer working certainly not working for Tailwind so it's it's a sad state of affairs but this is this is where we're at in the world of AI and open source it's so the issue is two things one is that people are not going to the website in the first place because AI is doing the job and people are not many many are not even aware of tailwind being used like AI just chooses that for you and you just ignore what the AI chat is saying probably. So that's the first issue, people not buying it because they never see it in the first place even though there are significantly more users. But the second issue is what they are selling is kind of like simple templates, simple UI components that AI can't build perfectly fine but good enough in most cases. And that's probably what people are doing. Instead of buying a really well-gineered template, they're just prompting AI over and over and over again. Uh so this is also interesting because the money is now going towards the AI companies even though they are also not making a lot of money. That's also I find it uh to be quite funny. So Tailwind is not making money. Open AAI not is not making a lot of money and at the end like the UI is broken uh and the the good stuff that Tailwind has uh made uh are not being used. Instead you just duct tape some some stuff randomly AI put together. That's where we are at. This isn't a tailwind problem. This is a an industry-wide problem where you know the information we give out the the the sort of the models that have worked for so long just don't cut it anymore right so we all need to really like especially you and I kabaza as content creators we're giving out free information uh on YouTube where does where where in this kind of pipeline does it matter that people don't even go to YouTube anymore because they could just search based on the free information we're giving out. They can just search it on AI. Yeah. Using AI, our our contribution to the to the world knowledge is being sucked up and we're we're not able to then convert people to whatever it is that we and in two ways by the way like in one way it's ending up as the AI uh training data which will be then outputed in a very generic way. it might not be as like exact as we put it out there. And the second one is uh AI is just reading the transcript of whatever we put out there and the person will never even know who from Yeah. Yeah. Um and it it begs the question like who's next because this isn't like I say this isn't a tailwind only problem. This is this is a industrywide problem. Um, and I think the categories that we thought about that were that, you know, the the yeah, the the the criteria that this falls into is really those companies that have a free um lead magnet that they they that's information or information based or that is like again open- sourcebased that they rely on people coming through to learn about it to then sell it on the back end. And luckily, you know, we spent a bit of time thinking about who's next. Luckily, a lot of these companies, a lot of these free open- source software have already kind of fixed, not fixed the problem, but they uh Nex.js has Versel. Um Shad CN was just recently bought by We just looked at it before the call. I've already forgotten. Maybe it's Versel again. Maybe they've already It's Versel, I believe. Yeah. V. Yeah. Yeah. Um so, also by Versel. There are there are some and that that did get me thinking like it did get me thinking of a silver lining that you know we're always facing change through history through um you know we're always confronted with a new paradigm that shakes things up a bit and I think all this has done is really just prove that this this model of offering something for free hoping to sell it on the back end just does not work in this day and age and while I don't have necessarily the answer to it all. I'm optimistic that we'll just find another way to support all this. Maybe it is that you these companies are just less inclined to give away stuff for free because they just know there's no um route to monetization because of AI. I don't know how long that might take. Um but it it does again it's cyclical, right? There there's bound to be a solution. It's not sustainable. It was never sustainable to just give things away for free, right? So, I don't know. There's one aspect of me that's just like I wonder like this can't this can't end this way, but it's it is sad all the all the same. You know, people lost their jobs. Um, and it's also just like I say, it's very paradoxal that something could be so so uh popular. Everyone's using it. Maybe we're not not even knowing yet. They are more more popular than ever yet, you know, not a lot of uh actually yeah they they are not being able to sustain themsel for more than 6 months which is crazy. This also like makes me think about like the like the growth and distribution channels that you have. So th this tool the this tool's distribution has been powered by AI in a way like AI is choosing the tool like the library and just just choosing it and using it in opposed to the users like actual people's um ability to choose it like um consciously and make a decision maybe help the company or pay uh their premium products. So that's a question. But also on the template selling side, so whether it is a full template or just a component, this also makes me think of I think this is what Sam Altman said. Um for all products to think about what AI does to their product. So, I'm just paraphrasing here, but will the next AI, which will be more powerful and better, whatever, like the next updates that are getting better and better, will that make your product better or worse? And in case of shut uh shuts and tailwind and shutsen as well and others in many ways as AI is getting better the value you get from these products is kind of decreasing because AI can do it. Even though I understand like AI is literally stealing from them. But unfortunately this is what we are facing. AI is stealing and is getting better and better at stealing and getting better and better at recreating what has been already created. So the value of these products is diminishing as the AI is getting better. And this is true about anything that you are trying to do. So whether you are a web designer or a developer or have a tool or have a company or have a startup idea, you need to think about this like is the next uh update of AI going to break you or make you a super like powerful tool and it's you know it's in your best interest to align yourself with AI not against AI even even if it's a bubble even it Yes, it is. And even when it pops, it's still the value will be there which is like these level of automation and this uh change in the like the the detail that we will work with. So instead of code, we will work in a different level. So yeah, it's really hard. I mean I'm building a UI library, right? While we see a UI library is go going out of business. So, it is it is kind of crazy, but I'm trying to align myself in a way that we we build more and better stuff as the AI is getting more powerful. That's what I'm trying to lean to instead of like a small system. I'm thinking about how can I build stuff that are better and better as the AI gets better and better. How can we scale with that? So, but it's quite difficult. Yeah. So, we'll leave links to everything down below in the description when it when the clip comes out. But be interested to know what you guys think, whether you are thinking already thinking about this, whether you have some ideas on how to again change this pricing, this mental model on how we how we earn revenue and whatever because AI is here to say even if even if AI bubble burst, it just means that it's it's what do they call it when the stock market balances out, you know, it's just a a correction. It's just a correction. Let's see. Good luck to Talwind and let's see how it goes on. There was a third way that you can uh give them money and that's just by physically sponsoring them. You know, if you have money Oh, yes. to just give Good point. Yes. This is part of a larger conversation on my show, Command AI, which we stream live every single week. We discuss the news and all things related to AI in the world of design and web. Catch us next week and join in the banter.