We live in the greatest of times to build software. A $200 subscription gives you access to state-of-the-art coding models that can build almost anything. So why isn't our software 10x better? And why does most of our software still look like it was designed in 2015 but now with a chat box as its homepage? The short answer is rationing. It's over, and we haven't caught up.
Before Claude Code (BC), the physics of building software looked quite different. Software was expensive to build and cheap to run. Writing code was bottlenecked on hiring and retaining expensive engineers, who needed expensive managers to keep things on schedule and expensive product managers to help figure out what to build. The cost of compute, memory, and storage fell every year. The median public SaaS company kept about 75 cents of every revenue dollar as gross profit. Engineering bandwidth was the scarcest resource in all tech companies, and the products we got were the result of rationing it.
After Claude Code (AC), the economics that gave us every single piece of software we use today have inverted. Building software has become cheap, with the marginal cost of building a new feature approaching zero, while running it, now that AI sits in the critical path, has become expensive. Any product using LLMs now carries real COGS and real marginal cost per user. Software has flipped from high fixed cost (R&D teams) and ~zero marginal cost (cheap compute) to low fixed cost (leaner R&D teams, more agents) and substantial marginal cost (frontier models). Software now looks more like manufacturing than SaaS.
Our products were shaped by rationing, and the rationing is over. If you're building today, you're no longer bound by yesterday's constraints. A new product or a new feature is cheap and easy to build. Experiments are easy too, because code, however complex, is now disposable. So the software we get from here ought to look entirely different, and be orders of magnitude better. It doesn't, at least not yet.
Source: Hacker News · Summarized by HeadlinesBriefing