Software margins are good, especially compared to physical things. However, the marginal cost is far from zero. It scales with # and variety of users. Today, all software comes with complex dependencies.

Take for example any mobile app. Apps require constant upgrades to keep up with the hardware and software changes on the platforms. You can’t just build an iPhone app and leave it alone to be enjoyed by people. I’ve tried, within a year or two there will be changes that require developer work, if you don’t keep it maintained, it will start to crash and function poorly, Apple, for example, tracks everything and will start with de-boosting search results for your app and end with removing it from the platform entirely.

Google is the same. I’ve tried, I built a Top 25 RPG and got busy with other things. It went from Top 25 to deplatformed in less 5 years because unmaintained software just doesn’t work in most cases today.

Software is more complex now. All software is a conglomeration of lots of other software: frameworks, platform tools, libraries, APIs, etc.

Another example: Flash

Another example: All the AI software being written on top of the OpenAI API will be broken in a year or two as they roll new versions of the API and deprecate the old.

Software doesn’t just work anymore. The platform that executes it is constantly changing.