4. Two Modes: The Top of the Pyramid and the Average

There are two profit models in the world. One follows the 20/80 rule, where the top 20% of people take 80% of the profits, or, in an even more extreme case, the top 1% take 80% of the profits. The other offers high average returns, even if it does not necessarily reward only the most outstanding people.

For the past few decades, software development has belonged to the second model. You do not have to be exceptionally top-tier to earn a decent salary. Fields like medicine and law also have this same quality.

Their common feature is this: they require years of learning, intensive skills, and specialized knowledge, and more importantly, they need a market that can support the supply. Although the rise of LLMs has greatly lowered the barrier for people to write code and build things, the demand for software development still exists. We can dig into that more later.

Many industries have this kind of pyramid structure. In software development, profits depend on whether the company’s business model is successful, rather than on software development itself. What I mean is that the success of a product does not necessarily come entirely from having excellent software; it may also involve other factors.

As long as you join a company whose profit model sits at the top, the industries you can enter are not limited to a specific field. That makes the market for software development much larger. At the same time, software also has several advantages that are hard for other industries to replicate:

• Increased computing power lowers the barrier to software development
• Low development cost: depending on the complexity of the software. But as long as you have a computer, anyone can write it
• Almost no initial cost: in terms of early traffic, most costs can be free, at most just the price of a domain name (around $10 a year)
• Easy to replicate: one piece of software can be sold to unlimited users

Another model is winner-takes-all profitability, such as for influencers, writers, painters, athletes, and so on. Aside from the small group at the very top of the industry, most people cannot support themselves without side jobs. Doing freelance work for others may earn enough to get by, but it is much harder to accumulate compounding effects. (This is from a profit perspective. If you are talking about self-fulfillment and conviction, then do whatever you want.)

I was very fortunate that for the first ten years of my career, I was able to stay within the pyramid of the second model.

Independent development is different. In addition to having a certain understanding of the development process, you have to handle product, market, and business model—everything—on your own. These things require a great deal of accumulation, research, and sensitivity to the market; they do not happen overnight.

I once saw a case online: for a massage shop, the best appointment method is still by phone and pen-and-paper. They do not care whether there is automation, online booking, or exposure. You may think that by helping them automate and book online you are solving a problem, but when it is done, you realize that was just your own fantasy.

The rules in an industry may seem simple. It often feels like you could jump in and do it too, but the resources are simply not in place yet. Maybe you have not found that key person. Maybe you cannot handle the regulations. Maybe the circle itself is closed. Even if you have development skills, it does not help.

As someone who has benefited from networks and resource integration before, I know how important this is. When we worried about saving server costs, someone else could get it for free with one phone call. When legal help was needed, one phone call was enough to get a law firm that specialized in working with them. Their efficiency in getting things done is something a total beginner like me could never compare with.

You have to find a way to handle everything yourself. What you will face is a pyramid under the first model. Still, that is okay—you can make the pyramid smaller in two ways:

• Narrow the playing field: narrow the audience to a group where you can become top-tier. Example: a health drink for new mothers; a Netflix for musicians; a social platform for fans of 推し活
• Validate ideas quickly in a low-cost way: do not write code first. Use group-buying, Google Forms, landing pages, MVPs, prototypes, and similar methods to confirm demand
• Find the key person and enter the resource circle

Another thing to note is that on this path, many people will doubt or reject your ideas. Some of that is genuine insight; some of it is simply because they are not your target users (TA).

Speeding things up and quickly validating ideas are two different things. Cutting corners means wanting results without putting in any effort; quickly validating ideas means confirming demand at the lowest possible cost first, then investing effort once it is clear.

I do not think I am the next Steve Jobs. I cannot accurately predict what users want in the absence of demand and build an appealing product from nothing. But I do believe that I can sharpen my skills through the process of building.

Some people will object and say this lacks a craftsman’s spirit of development— that you should polish product details with care, like Apple does. But I think discussing this out of context is too idealistic.

If I had nearly unlimited money to work with, of course I could slowly refine the product until I was satisfied. But I am not that kind of person. Doing things with a craftsman’s spirit is indeed admirable, but it also carries the risk of starving.

First, survive.