Something is changing in the unit economics of software
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Re: Something is changing in the unit economics of software
#2I think part of the new equation may also become; "Why even pay for the SaaS in the first place if you can just forge the service exactly how you want it?" The benefits of unlimited access to the tool you forge are still there, its just a lot easier to make whatever tool you want.
Are there any examples of products containing ai inference that are successful? Products that are beyond just direct access to frontier LLM's, I mean.
Re: Something is changing in the unit economics of software
#3I think part of the new equation may also become; "Why even pay for the SaaS in the first place if you can just forge the service exactly how you want it?" The benefits of unlimited access to the tool you forge are still there, its just a lot easier to make whatever tool you want. Are there any examples of products containing ai inference that are successful? Products that are beyond just direct access to frontier LL…
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Re: Something is changing in the unit economics of software
#4> Meeting that expectation means making LLM calls, and LLM calls cost money.
Of course, and so does everything in the software world. The point is getting the cost so low that it’s basically free. The new DS V4 Flash or the smaller Qwen3.6 models are still really expensive compared to what we were used to in the economics of software, but it’s not unreasonable to expect these costs to continue falling down.
Rough chatgpt estimate says 3-5 orders of magnitude of difference compared to a typical user interaction with a SPA (db/cache lookup, CDN…)
Re: Something is changing in the unit economics of software
#5> Meeting that expectation means making LLM calls, and LLM calls cost money. Of course, and so does everything in the software world. The point is getting the cost so low that it’s basically free. The new DS V4 Flash or the smaller Qwen3.6 models are still really expensive compared to what we were used to in the economics of software, but it’s not unreasonable to expect these costs to continue falling down. Rough cha…
> and so does everything in the software world.
Well, no. Copying is free, or so near free it makes zero sense to charge. LLMs are just papering over the damage caused by profit.
Re: Something is changing in the unit economics of software
#6I don't think it's at all certain this won't land back on the same unit economics as the old way. The cost of serving a user doesn't have to be free - it never has been - it just has to not be the dominating factor in your costs. I'm guessing there are still quite a lot of per-user costs that aren't easily visible. Like how many of your users are logging support requests, or suing you, or demanding bug fixes or custom integrations or a myriad of other things. And how much are you having to invest in security updates, regulatory compliance, marketing etc. Not to mention, users are getting well acclimatised to the idea of quotas and paying for increased limits.
Re: Something is changing in the unit economics of software
#7I think part of the new equation may also become; "Why even pay for the SaaS in the first place if you can just forge the service exactly how you want it?" The benefits of unlimited access to the tool you forge are still there, its just a lot easier to make whatever tool you want. Are there any examples of products containing ai inference that are successful? Products that are beyond just direct access to frontier LL…
As if making all the decisions that go into that product, hosting it, and maintaining it are free! Now do that for all the SaaS you subscribe to. Would you even get any real work done?
Re: Something is changing in the unit economics of software
#8I think part of the new equation may also become; "Why even pay for the SaaS in the first place if you can just forge the service exactly how you want it?" The benefits of unlimited access to the tool you forge are still there, its just a lot easier to make whatever tool you want. Are there any examples of products containing ai inference that are successful? Products that are beyond just direct access to frontier LL…
As if making all the decisions that go into that product, hosting it, and maintaining it are free! Now do that for all the SaaS you subscribe to. Would you even get any real work done?
So many pivot opportunities, we’ll live remotely from office.
Re: Something is changing in the unit economics of software
#9This is one reason I've been trying to figure out tasks (and products based on those tasks) that can be pushed to the edge, either via small specialized models or small general purpose open models. I suspect the same desire to keep unit costs low is part of why Google is falling behind on the "frontier", but seemingly at the lead, or near it, on models that run on-device. I think they're just focused on making models for tasks that don't require boiling the ocean.
But, it's a hard problem. The models that run locally on normal computers/phones are pretty terrible compared to the frontier, without specialization and fine-tuning. And, even with specialization and fine-tuning, often a high-end general purpose model is going to do a better job and people don't need a bunch of local tools installed to do their various tasks.
Re: Something is changing in the unit economics of software
#10> Meeting that expectation means making LLM calls, and LLM calls cost money. Of course, and so does everything in the software world. The point is getting the cost so low that it’s basically free. The new DS V4 Flash or the smaller Qwen3.6 models are still really expensive compared to what we were used to in the economics of software, but it’s not unreasonable to expect these costs to continue falling down. Rough cha…
> and so does everything in the software world. Well, no. Copying is free, or so near free it makes zero sense to charge. LLMs are just papering over the damage caused by profit.
Yeah, my point is that LLMs can reach that point too. Especially if you do it clientside. Copying was also way more expensive back in the 60s (accounting just for machine time and electricity, not storage cost, about 100 million times more expensive than today). Everything has a cost.