Rather than per-day costs, I think it might be more meaningful to look at per-result costs. It took us about 9 months (and $160k using our napkin math) to add support for Oracle. Adding Db2 support using this agent pipeline took 2 days and $4,172 in tokens.
One caveat to the number for DB2 is that it doesn't consider review costs. We weren’t reviewing the hospital’s code during that sprint. Since we’re still confirming correctness for Db2, a more accurate comparison would add the human time to verify this.
I’m not going to claim this tripled our revenue. But revenue is also a function of time to deliver too. When a missing feature in the migration tool is what’s blocking a customer’s migration or a deal, shipping it in days instead of months can move revenue directly if it means the customer doesn't choose a different alternative.
Thank you for the reply. My question is - will you be able to charge the same amount for work done in days instead of months? Or even a proportional amount?
If its work that was blocking an existing deal, I can see this playing out in your favour. Whereas, if you were trying to negotiate a deal where you wanted the customer to pay x$ for a feature you have yet to develop, you might now have to charge lesser.
I don't get your maths? [1] 160/9 months != 600 for any given number of days a week e.g. 5,6,7 (something between 6 and 7), but where did the 9 come from, is it some kind of adjustment for weekends? Anyway there is also a concept of "fully loaded employee cost".
In any case the way to think of this is not "/day".
The reason is simple. If you buy 1000 barrels of oil, you buy 1000 barrels of oil not 17.4 days of oil. There is now a disconnect between work done and time. Infact you would be sane if you said "that result I can get in 2 days for $4172, if you can get me that same result in 1 hour, I'd pay $8344". See where this is going?
Yes a lot of thought work is now a commodity, and if you want the commodity faster (last minute booking, uber to come quicker etc.) you pay more not less. Value being $/hour is over.
True but the pace of buying doesn't matter for this argument (of course it matters for business longevity!). What matters is if you spend $160k on tokens or an employee then ... what gets more done.
For some jobs the employee comes out top, for others the tokens. This landscape will continually shift. However definitely the "per hour" is just some intermediate part of the value calculation can can't be directed compared.
If there were a way to pop out the next Lovable with $160k tokens and you can have that land in 4 hours, would you pay. Well yeah someone would, just like they'd buy $160k of oil if they needed it. It would be even better than paying $80k to an employee who took 6 months.
I have qualms and disagreements with the whole "software factory" concept, but your math doesn't help the argument. The cost of human labor is more than salary—or even hourly rate, if you're thinking of paying a contractor.
I'm comparing cost per $ of revenue, not labor. And my math is for a scenario assuming a company is running this type of software factory year-round.
Now one could say that the same feature that a customer would've paid $1M for was done in $4k instead of $160k. But buyers are going to demand much more as they see this kind of pace. You'd be able to charge maybe only $10k, because your opportunity cost goes down since you only spent 2 days; you can't keep the same margins that you needed to in order to justify spending 9 months on it. I think it gets very complicated and we're yet to see these economic effects.
... Token cost is still heavily subsidized by the frontier labs while they're private companies and raise billions whenever they decide. The downward cost in tokens is unsustainable long term without revolutions training or inference of models.
The article also explains that retailers have had customers ask for this, which is why Nikon is trialing selling this through those channels instead of direct, as usual.
You don't really have to market something like this. There is a VERY small subset of users that NEED this feature, and they will seek it out. The kind of user that wants this is not as price sensitive as a consumer. A few hundred extra dollars doesn't matter to an organization that needs this for an RF sensitive scientific environment, or a secure facility.
See also: iPhones with cameras removed. You've likely never heard of them and they are not marketed at all, but if you are one of the few that need one, you know they exist, and the price premium doesn't matter. $1400 for a used 2020 iPhone SE, if you're curious. That's a 10x premium on what you would pay for that phone anywhere else.
What I took away from their explanation was that they built this for those contract customers (the kind you are talking about) and have had regular consumers asking for this (who want this for other reasons) - why else would they put it on B&H and not just a contact us page on the company website?
I don't know how you can say with confidence that a few hundred dollars and not marketing this wouldn't have an effect on sales.
At least the earlier Fairphones continued to work even if you removed some modules (like the camera & microphone), and all you needed for that was a regular-priced Fairphone, a screwdriver and a few minutes of time. I not sure if it's still the case for the current Fairphone, but I don't see why it should've changed either.
I won't claim to NEED the feature (I'm not a 3 letter agency or anything) but I'd like to have it on general principle, and I'd pay extra for it, though probably not $400 extra.
Will someone really pay me $1000 to remove the camera module from an 2020 iPhone SE? Are there some huge obstacles to that? I've disassembled the 2016 model (for battery replacement) and it was a pain, but not a $1000 pain.
For that matter, what about just attacking the camera from the front, with a drill?
Looking at pictures, it appears cameraless iPhones tend to have backs without camera holes / lumps, so some custom work is involved beyond just removing the module. Though there’s going to be a degree of “the government can afford it” in the pricing.
Drilling has some obvious issues, most notable if you go too deep you’re going to hit the screen.
And perhaps more importantly for the final price, if you’re paran^W concerned enough about security to the degree of commissioning custom iPhones without cameras, you’re also not going to let a random guy from the street drill into them.
(You also need to remove the front facing camera, which is also a more involved operation.)
You aren't the market. They don't really care to sell to you. Honestly, they probably actively don't want consumers to have these cameras for after sale support reasons. They would much rather sell you the standard camera and just tell you to turn off the radios if you don't want to use them.
These devices are sold to large institutions. If I need to give 30 employees at, say, a nuclear plant phones without cameras that they can take near classified/confidential equipment, I don't want a guy with a drill, I need a company that can provide 30 phones, a regular supply of replacements and a trustable piece of paper for the security auditors saying these devices are compliant. I need a phone that our security can glance at and know that it is ok. A phone with a drilled out camera is not the same as a phone with no camera for these purposes.
If I need to take photos inside that plant, and make sure that the photos will not be exfiltrated without going through a security audit, I need that camera.
At the scale that these institutions operate paying an extra $1k for a phone or camera that has security compliance outsourced is a no-brainer. Your sourcing team will spend more money investigating if the DIY route is possible than they will just buying from a trustable vendor.
AI Software Factory: $4172 / 2 days = $2086/day
This seems unsustainable, unless you're also generating 3x the revenue.