Tagged economics
5 essays
- Cheap intelligence makes the incumbents richer Cheap intelligence does not destroy value; it relocates it. Follow the money down the stack as the model commoditises and it lands in the layers a falling token price can't reach: proprietary data, workflow lock-in, distribution. The SaaS apocalypse is real and aimed at the wrong layer - it comes for the thin wrappers and the pure-model labs, while the incumbent with a real moat just got a cheaper engine bolted into it.
- The bet against itself Intelligence is deflating about fifty times a year, and the companies that make it are filing to go public at the largest valuations in history. The contradiction resolves once you see that none of them is priced as a model company - Anthropic is an enterprise bet, OpenAI a distribution bet, xAI a compute bet - and each is worth a trillion dollars only to the degree it can stop being the thing it is famous for.
- Google wins consumer AI on distribution Intelligence is commoditising, so the model stops being the moat. What's left is distribution and a business that profits from giving intelligence away, and Google is the only company with both - fighting Nvidia, Apple, Amazon, Microsoft and Meta each on one front while it works all five.
- The unit economics of a one-person AI product hey anna's variable cost is about 40% Claude API. That single fact rewrites the pricing, the acquisition maths, and whether viral growth is load-bearing. The SaaS playbook assumed COGS was a rounding error; it isn't anymore.
- Stated versus revealed preference, in booking data Travel marketing assumes people book what they say they want. The booking data says otherwise, especially on luxury tier and trip length. The gap between stated and revealed preference is where the useful product decisions live.