32 chunks · 26 episodes
The last era of software was based around zero marginal costs. In a world of zero marginal cost, there are only three consumer business models[adz]. Hardware. Charge a premium on the hardware, and lock people i...
...going to cost you non-linearly more. Many possible uses won't be viable at that marginal cost of quality.
...t 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 thus reduces down to...
...ue than you earn. This is a trap for products with an LLM feature to avoid. The marginal cost is non-trivial!
... change, you can't charge as much as you want for it. There has to be a change (marginal cost to the creator) to have a sustainable extraction of marginal price. If there isn't, it's unsustainable harvesting. If there is, it's regenerative. In...
...ee text and vibes. You could hallucinate the translation code once (at non-zero marginal cost) but then run it cheaply in the future (like other software, effectively zero marginal cost).
...s: 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: very little meaningful state for a user in the system th...
...ntuitively users feel that marginal price is 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...
...s 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 size of activity in the system. An ecosystem dynamic require...
...e to assume that consumer experiences will be free. But LLMs have a non-trivial marginal cost. Orders of magnitude below human labor. But orders of magnitude above generic compute. By default, this will lead to faster aggregation, as only aggr...
...of computers (or at the very least, a new one can be spun up at any time at low marginal cost, no matter when it is). And they can also handle fuzzy, reasonable behaviors like a human could. This might allow an era full of new flourishing of p...
...entation (angle towards or away from the north star) A one-time cost to build A marginal cost to operate A marginal value to users when they use it An uncertainty term that obscures all of the other terms One approach is to pick the node that ...