Code is getting cheap

I have always believed software was scarce, every business wanted more of it, restaurants wanted apps, banks wanted customers to do everything without visiting a branch, retailers wanted to sell everywhere, companies running on Excel wanted internal systems, software was basically how a business escaped its physical limits and became accessible to anyone anywhere

the problem was you needed programmers to build all of this, and good ones were scarce, you needed the frontend guy, backend guy, mobile guy, infra guy, someone who really knew the database, someone who could figure out why your queries were slow or why LCP suddenly went to shit, even boring software was expensive to build well

• frontend
• backend
• mobile
• database
• devops
• qa

and that scarcity created a lot of value, booking systems, ordering, payroll, invoicing, project management, customer support, dashboards, whatever, there was always another part of a business waiting to become software and relatively few people who could actually build it

I think we are watching software go from scarcity to commodity

DHH recently said writing code by hand is no longer an economically viable skill for most programmers at most companies, I wouldnt take it that far yet but directionally I think hes right, code is becoming cheap

and I dont mean software magically builds and runs itself now, you still need to deploy it, maintain it, fix bugs, understand production, security, architecture, customers doing weird stuff you never expected, real software is still hard

but a lot of the knowledge around building it is becoming accessible to everyone, framework knowledge, debugging, database optimization, performance work, stuff where you used to need the guy who had seen that exact problem before, now I can drop a good agent into a codebase, tell it the app is slow and have it trace requests, inspect queries, look at the frontend, figure out whats killing LCP and start fixing it

its not always right, doesnt really matter, the point is this knowledge is becoming less scarce

I read a tweet recently telling ambitious software people to stop building SaaS and go solve physical problems because the models are getting too good, I dont fully agree with the physical part but I really agree with the instinct behind it

because once software becomes abundant, what exactly are you protecting

thats the part I keep thinking about, what do you have outside the repo

• software
• ui
• apis
• dashboards

• software
• ui
• apis
• dashboards

• software
• ui
• apis
• dashboards

outside the repo

• customers
• a brand
• kitchens
• suppliers
• food operations
• logistics
• recipes and processes
• customer relationships
• planting operations
• nurseries
• field teams
• government relationships
• corporate relationships
• historical field data
• actual trees
• drivers
• riders
• marketplace liquidity
• city operations
• regulatory relationships
• distribution
• licenses
• banking relationships
• compliance
• financial rails
• risk systems
• trust

Calo isnt the app, its kitchens, suppliers, food, logistics, operations and years of figuring out how that whole machine works, you can rebuild the app and you still dont have Calo

same with Netzero, you can build the tree dashboard, copy the features, build the map, make the UI better, whatever, you still dont have planting operations, nurseries, field teams, relationships, historical field data and actual trees in the ground

fintech is the same idea without anything physical, you can reproduce the interface, you cant prompt your way into licenses, banking relationships, compliance and financial rails

I almost think about it like a ratio, how much of this company is actually just software, if you removed the code whats left, with a pure SaaS product maybe almost nothing, with Uber you still have drivers, riders, liquidity and city by city operations, with Airbnb you have hosts, properties, trust and a massive marketplace, with Amazon you have warehouses, fulfillment, suppliers and distribution, the software is obviously important in all of these, but the company is much bigger than the software

maybe physical isnt even the right word for it, maybe its tech enabled operations, distribution, regulation, supply, proprietary data, infrastructure, network effects, contracts, relationships, whatever, some companies might be 90% software and 10% something hard, others might be 20% software sitting on top of a massive real world machine, I dont think the exact ratio matters

I just increasingly care about what exists underneath the software that doesnt get cheaper when code gets cheaper

and weirdly this makes ugly businesses more interesting to me, logistics is ugly, physical operations are ugly, compliance is ugly, supply chains are ugly, good, AI can make the software around them much cheaper while the hard part stays hard

software used to be part of the moat because building it was hard and expensive, as that gets cheaper, the moat has to move somewhere else

maybe thats the shift, software becomes the leverage, not the thing that makes you special

software isnt going anywhere, there will probably be more of it than ever, I just think the software itself is becoming the least interesting part

when code becomes cheap, what do you have that everyone else cant