The age of artisanal software might finally be over
A few weeks ago, Chris Paik from Pace Capital set the startup world abuzz with a short post titled “The End of Software.”
In the piece, Chris argues that, as the cost of code goes to zero, software development will be disrupted in much the same way journalism was by the Internet driving the cost of content creation down to zero in the 2000s. He ends with the pithy line: “Majoring in computer science today will be like majoring in journalism in the late 90’s.”
I think Chris is directionally correct, but wrong on the specifics (which, in a variant of Cunningham’s Law, is why I think the piece went so viral). But where Chris and I agree is that there will be an explosion in the creation of software.
This has been a long time coming. Software production has been too expensive for too long. Why is software so expensive? Because software engineers are expensive. For all the tech sector’s obsession with productivity, the production of software is a decidedly artisanal act. There have been improvements in software production pipelines, sure, but let’s be honest…it is still just highly paid humans typing away on keyboards. That does feel a bit old-fashioned, doesn’t it?
Whether or not we have fully internalized it yet, LLMs have changed all that. It’s uncontroversial at this point to say that LLMs are surprisingly good at writing code. Is the code as elegant or performant as the code written by an experienced software developer? No. Could you ask an LLM to write a custom piece of enterprise-grade software? Also, no. But even today LLMs are good enough to empower non-technical people to write small snippets of code - tiny, trivial, seemingly insignificant lines - to solve problems which they previously thought impossible to solve by themselves. And that is more meaningful than it seems, because it has the potential to shift the clearing price of software itself.
As I argued this past week, we may not be witnessing the end of software, but we’re definitely witnessing the end of the MVP. The bar for software that people are willing to pay for is getting higher. And I think this is one of the reasons. As non-technical people are empowered to write more of their own code at the margins, their willingness to pay for new software will go down. They’ll only pay for something that they couldn’t build themselves. And, for the first time in decades, software won’t be the one causing deflation in other industries…prices will start to drop right at home.
What will that look like? It’s hard to know. I would imagine that the willingness-to-pay for that Shopify app with 50 clones will trend down sharply. My instinct is that the deflationary impact of LLMs will be most muted for products that embody some expertise that is very difficult to reverse engineer (e.g. deeply technical niche vertical software) or core pieces of infrastructure (e.g. systems of record or databases/data infra). I think there will also be an opportunity to build the platform on which a lot of this new LLM-prompted code is written. Perhaps the systems of record will own this themselves, but that might also look like an AI agent platform that enables users to orchestrate agents to do work for them across existing systems of record. These are all areas we’re spending a lot of time on as of late.
I wish I could end this post with a bold prediction, but while the immediate future seems clear enough, it’s still so early to pontificate on the second and third order implications of this shift. (And don’t look to investors for predictions anyway). All I can say is if you look across history, you’ll notice that every wave of technological innovation has been catalyzed by the cost of something expensive trending towards zero. It happened with Gutenberg and books. Calories. Transportation. Electricity. That suggests to me that we’re on the cusp of something monumental. So, let me ask you: what do you think will happen when code is free?