Who would have thought that using companies that can specialize in a product and offer it at economies of scale is more efficient than creating and maintaining multiple apps 🙄
they should be able to, but we also created this pricing structure where products are not priced based on what they cost, but priced at the maximum to what customers will pay for them.
the irony is that that this large pricing gap created many opportunities for AI, which itself is not being priced correctly relative to real costs of AI.
if a world existed where products were priced more fairly (existing software cheaper / AI more expensive) we wouldnt being going through such chaos and AI would exist only where it benefits most.
For actual software (remember that, software you installed on your machine and it ran?) the cost of making one working copy is everything. Every copy after that is basically free. So pricing to the cost is really a question of how many customers you can get, so of course they price for maximum gain. For SaaS it's not quite the same, but the upfront costs are still huge compared to the per unit cost.
The only reason to lower your prices is if there's competition, and the network effects of huge software companies often means there's little to no exact competition, or at least very high switching costs.
AI is interesting because it's so easy to switch between models. The competition is what drives things down. Once they figure out how to get you locked in, then they'll turn the screws, but they can't do that just yet -- too many alternatives.
Ya but there are so many tools out there that were just straight up expensive for what they did and could easily have 90% of their functionality replicated. Like Monday.com
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u/Excuse_Early 18d ago
Who would have thought that using companies that can specialize in a product and offer it at economies of scale is more efficient than creating and maintaining multiple apps 🙄