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Technical Deflation

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Re: Technical Deflation

#21

Post by bootsmann »

darkerside wrote: post #5

Does anyone else agree with this the premise of this article? Is it sensible to put off building things now because it will get even cheaper and faster later? Maybe the time value of time is only increasing as we go.

I think you're right. The author is quite wrong on many aspects in my view. One of the central mistake he makes is that creating a profitable startup is mostly a matter of shipping good product i.e.

> Used to be, you had to find a customer in SO much pain that they'd settle for a point solution to their most painful problem, while you slowly built the rest of the stuff. Now, you can still do that one thing really well, but you can also quickly build a bunch of the table stakes features really fast, making it more of a no-brainer to adopt your product.

Re: Technical Deflation

#22

Post by raw_anon_1111 »

What I don’t understand is that how is this automatically good for startups?

Say I have a startup that vibe codes “AI for real estate”. What about customer acquisition?

On the other hand, if I’m Zillow, why can’t I just throw a developer on the same feature and automatically have a customer base for it?

If you look at most of the YC funded startups these days, they are just prompt engineers with no go to market strategy and some don’t even have any technical people and are looking for “technical cofounders” that they can underpay with a promise of equity that will statistically be meaningless.

Re: Technical Deflation

#23

Post by igleria »

pjc50 wrote: post #14
marcosdumay wrote: post #3

Earlier quoted context omitted.

Deflation is about all prices going down. Just a few decreasing is normal. Anyway, WTF, economics communication has a huge problem. I've seen the article's explanation repeated in plenty of places, it's completely wrong and borderline nonsense. The reason deflation is bad is not because it makes people postpone buying things. It's because some prices, like salaries or rent just refuse to go down. That causes rationin…

See "price stickiness" and what is simplified as "menu reprinting costs"; there's usually a cost associated with changing prices, and a cost associated with renegotiating prices for everything that's not being sold on a spot market. People cannot buy housing at spot, and while spot-labour pricing is definitely a thing for some services it's so socially destabilizing for anything skilled that most workforces operate o…

In Argentina I've learned from a young age that prices take the elevator, but salaries take the stairs.

It got old really quick having to negotiate with the boss every 6 months.

Re: Technical Deflation

#24

Post by [deleted] »

darkerside wrote: post #5

Does anyone else agree with this the premise of this article? Is it sensible to put off building things now because it will get even cheaper and faster later? Maybe the time value of time is only increasing as we go.

[deleted]

Re: Technical Deflation

#25

Post by tikhonj »

mr_toad wrote: post #11
Zigurd wrote: post #8

Technology has always been deflationary. But you don't put off buying a computer because it will be cheaper next year. Nobody seems to be putting off buying GPUs despite scary depreciation and a blistering pace of new product introductions that are ever cheaper faster and better.

Some people do put off buying cellphones and laptops when they know a new model will come out every year.

The overall trend has been the opposite though, hasn't it? People used to buy a new phone (or new laptop/etc) every couple of years because the underlying tech was improving so quickly, but now that the improvements have slowed down, they're holding onto their devices for longer.

There was an article[1] going around about that recently, and I'm sure there are more, but it's also a trend I've seen first-hand. (I don't particularly care for the article's framing, I'm just linking to it to illustrate the underlying data.)

[1]: https://www.cnbc.com/2025/11/23/how-device-hoarding-by-ameri...

Re: Technical Deflation

#26

Post by [deleted] »

Zigurd wrote: post #8

Technology has always been deflationary. But you don't put off buying a computer because it will be cheaper next year. Nobody seems to be putting off buying GPUs despite scary depreciation and a blistering pace of new product introductions that are ever cheaper faster and better.

[deleted]

Re: Technical Deflation

#27

Post by skeeter2020 »

>> First, models getting better makes AI-based applications easier to build, because they can be simpler.

Don't conflate easy with simple. I'd argue they are actually easier and far more complex.

Re: Technical Deflation

#28

Post by JacobiX »

In the end, the article says:

> writing functioning application code has grown easier thanks to AI.

> It's getting easier and easier for startups to do stuff.

> Another answer might be to use the fact that software is becoming free and disposable to your advantage.

For me, the logical conclusion here is: don't build a software startup!

Re: Technical Deflation

#29

Post by sgt101 »

The models themselves represent the biggest deflation cases I've ever seem.

The charged cost of a frontier model is ~200x lower than 2 years ago, and the ones we are using now are much better - although measuring that and how much is challenging. Building a "better than GPT-4" model is also vastly cheaper than building GPT-4 was... perhaps 1/100th?

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