13 chunks · 10 episodes
...ve to create continuously. Convert what had to be opex before into capex. Pay a fixed cost once and now that marginal cost evaporates. Tools that you use always have this shape. Writing didn't necessarily have this use as a tool, because th...
...project can be done in a weekend. They can't fill the pipeline fast enough! The fixed cost of finding and doing the logistics for a project now dominates the marginal cost of executing the project. All rind, no pulp!
... lots of small fiddly details for a great developer experience. You trade off a fixed cost for a variable cost, which is good for the developer. But the trade is that now you as a developer are stuck paying rent. Before PMF, the developer e...
Large fixed costs need large markets to make the investment worth it. You want as many customers to collectively share that fixed cost. The higher the fixed cost, the...
...ian floor. You need to assume that a market of a given size makes sense for the fixed cost of building the software to make sense.
...wer the process. The slower the clock rate; each step in a process has a bit of fixed cost to be received and executed by the next person as it is handed off. Receive, ramp up your awareness, execute, send, ramp down, repeat. This means tha...
...e app? Part of it is because software is expensive to write, cheap to run. High fixed cost, low marginal cost. Over time prices tend to reduce to the marginal cost of production. Over sufficient time, with sufficient competition, software t...
...s phenomena happens today because software is expensive to write, it has a high fixed cost. But as the fixed cost of software goes down, it will get to the point where you can write your own software, or have an LLM create it for you. You w...
...he galaxy of viable software. Viable means a large enough market to justify the fixed cost. Software is expensive to create and distribute, so the market has to be reasonably large to break even and become viable. But if software becomes mu...
...ngines or more like operating systems? Search engines: Hard to build: expensive fixed cost that requires specialized knowhow. Free: marginal cost can be supported by advertising Easy for a user to try: Just a click away Not deeply sticky: v...
... fair if it scales roughly with the marginal cost to produce the marginal item. Fixed cost one-size-fits-all-software has a marginal cost of effectively zero. That makes that kind of software hard to charge for in the limit. You can only ch...
...e an infrastructure dynamic That is, the provider builds a given integration at fixed cost, they can re-sell it to many users with low marginal cost. But an ecosystem dynamic makes the product more valuable at a compounding rate with the si...
...les can feel underwhelming. Especially if each one has some kind of non-trivial fixed cost. But that's why it's best to go after acorns. Acorns are small now, but have the potential to grow on their own into towering oak trees. Rocks are no...