Technical Deflation

Technical deflation is the observation that building software is becoming progressively cheaper and faster, mirroring economic deflation where lower prices delay purchases. The article argues that this trend encourages startups to postpone building now in hopes of an even easier future, creating a spiral of inaction that can erode competitive advantage.

AI models are the primary driver: better LLMs offload hard work, generate functioning code, and reduce the need for complex retry logic. In the post-Claude-Code era a medium-hard task can be shipped with a few nested try-catches that barely scale, yet it works enough for early customers. The speed and cost improvements let small teams assemble table-stakes features in days instead of months.

The consequence is a shift in where a startup's moat lives. With code no longer a barrier, differentiation must come from distribution, deep customer understanding, and go-to-market tactics. The piece cites Giga AI's pivot to self-customizing agents as an example of leveraging cheap software to create a new service model rather than relying on bespoke engineering.

Leaders should stop treating development as the core competitive advantage and instead invest in sales, marketing, and product positioning. Use the low-cost build capability for rapid prototypes, but focus long-term on customer acquisition, retention, and unique value propositions that survive the next wave of technical deflation.