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I think you have the real economic effects of AI companies sucking up entire industries now (a lot where indie hackers operate) I do think the SaaSpocalypse is at least partly real
A regular boring but non-superficial SaaS app would do well 5 years ago but now it might not get anyone to sign up because it's so easy to vibe code by tens of thousands of other people
If you start from a low baseline of performance, you might get some positive boost. It's quite small, but you might get it. But if you are actually quite a high performer, then you risk getting worse. with this is called the inverse U-shaped curve.
However, if you are targeting full autonomy, and you're targeting superhuman, strongly superhuman performance, you find that weak sensing just leads to a safety curve that flattens out way too early.
common failure mode is picking the tech that gives you the fastest early ramp, riding that steep curve, feeling like you're winning, projecting that, you know, steep slope into the future and feeling like the sky is the limit, and then hitting the plateau, and discovering that the technology path that you picked actually flattens out way before the performance that is required by your product.
the other piece of advice I would have is try to identify what is the what is the exponential in the world that has both the steepest curve and will go the longest. And you know many decades ago this curve was was Moore's law and that probably was you know that was at the time like clearly the right thing to invest on. I think right now it's AI progress
And what they found is there's kind of this um bell-shaped curve between energy availability and brain volume. And in general, brain volume, right, the more the better, right, we think. And so if you're chronically calorically restricted, your brain is smaller um because you just don't have the resources to invest in, you know, the structure um and to maintain it. At the other end, you see the same thing. So if you're chronically in a chronic state of chloric excess, you also tend to have a smaller brain on average.
there's some interesting work on you know happiness being more curve linear like midlife is actually some of the lowest levels of happiness and life satisfaction
my claim is the proper way to evaluate the models now is you either have some kind of budget for the benchmark whether it's tokens or cost or time or whatever or you plot the performance as a function of the amount of test time compute that's going into the model
when you have an exponentially growing curve, I think the way that an exponential curve feels is it's growing so quickly that the the kind of emotional feeling is it can't possibly keep going, right?
software as a service businesses, for example the whole reason why they can charge a subscription is because they are able to essentially hold a gun to the customer's head and say, "Pay us at your subscription, otherwise we will delete all your data."
if somebody, you know, is standing behind the dessert table and is replenishing, restocking the desserts and keeps kind of you know, adding adding new ones in, it may turn out that you know, a little bit later a much better desserts appear.
If you want something better than your phone but still easy to use, get a GoPro. They're durable and take incredible photos and videos without a steep learning curve.
Worse, you realize that the gazillions of unit, snapshot, and e2e tests you had your clankers write are equally untrustworthy. The only thing that's still a reliable measure of "does this work" is manually testing the product.
well the model the compute efficiency gains you get from research are so large you actually want most of your compute to go to research not to development because you know all these researchers are generating new ideas trying them out testing them and continuing to march along this and push the prao optimal curve of scaling laws further and further and further
They could release claw slow mode and have an increase in tokens per dollar by a significant amount. Um they could probably like reduce the price of Opus 46 by you know 4x 5x and reduce the speed by another by maybe just like 2x like the curve on inference throughput versus speed is there already just on hm um and yet they don't um because no one actually wants to use a slow model
But, I can tell you that there are at least two more cycles left in this, and that means they will be at least 16 times smarter than they are today, and that is going to cause all of knowledge work to be subsumed by this stuff.
So what usually h what often happens is you raise prices and signups don't change. When I say signups, I mean the like signups per month, you know, the rate at sign or signups go up. This happens all the time.
But that's not what happens. What happens is it starts with an S-curve and then it starts sagging. Its butt starts sagging down. So, I wrote an article about this called the elephant curve, which is what I named it, right?
I do, but it's business as usual because we're we're in an intelligence explosion already and have been for decades. And when you look at GDP, it's basically the GDP curve that is an exponential weighted sum over so many aspects of the industry. Everything is gradually being automated has been for hundreds of years.
And in contrast to software as a service or software you'd buy off a shelf at, you know, Fry Electronics, you know, decades ago, which might help you be marginally more productive, help you get a job done. Agents, in contrast, are actually getting the job done for you. And so you're in essence hiring software to accomplish a task and get it done well.
Personal Capital is a financial tracking tool that I started using in mid-2013, and I still use it almost daily to get a snapshot of my "net worth", just as a fun way to remind myself to relax about money and make the most of life.
The big picture is that I don't think it's going to be a cliff. I think a really good example of how growth changes is when Meta added stories. So Snapchat was on an exponential, they added stories, it flatlined.
We know that a lot of the American companies are very invested in safety, and that is the central culture of a place like Anthropic. And I think Anthropic sounds like a wonderful place to work, but if safety is your number one goal, it takes way longer to get artifacts out.
And the history of NLP and language processing instruction, tuning and tasks per language model used to be like one language model did one task, and then in the instruction tuning literature, there's this point where you start adding more and more tasks together where it just starts to generalize to every task. And we don't know where on this curve we are.
But what happens when every company can just invent their own business logic really cheaply and quickly? You stop using platform SaaS, you start building custom tailored solutions, you change them really quickly.
If you zoom out on a story of technology, you usually see a big exponential curve. But if you look at the curve up close, you see that it's wavy, made of S-curves.
It is fair to say that, while economists expected the short end of the yield curve to reflect the higher rates needed to win the fight against inflation, the sharply steeper long end of the yield curve in the last few months has come as a surprise. I shall freely admit that I did not predict it.
This book is a great overview of the keys to building a repeatable sales model for your SaaS business. It's a great mix of the best lessons from Jason Lemkin and his SaaStr blog and Aaron Ross's top tier consulting work. You can skip the last 50 pages which transitions to being a bad self-help book.
Want to know the story behind how Salesforce was built? This is that story in founder Marc Benioff's own words. At times I found him overly prescriptive without an appreciation for his unfair advantages he had (getting to start it while having a big salary at Oracle, having $6Mn in "bootstrapped funding", etc). However, he also helped pioneer the cloud and SaaS as a business model, so there are many great lessons to glean if you're building a high-growth SaaS business.
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