April 9, 2025

Welcome back to "Fresh from the Labs," where the Pioneer Square Labs team (Shilpa, Jared, Kevin) is joined by special guest Brian Fioca (formerly PSL, now heading to OpenAI) to discuss their latest AI experiments and observations.

Following up on their previous discussion about "vibe coding," the team shares insights from a recent internal hackathon where non-engineers used tools like Lovable to build applications. They cover the excitement and empowerment users felt, the ability to leverage specific skills like design, but also the real-world limitations encountered – debugging difficulties without code visibility, the need for structured prompts to avoid feature bloat, and hitting technical walls requiring engineering expertise (like Superbase RLS setup).

The conversation shifts to the recent advancements in AI image generation, spurred by OpenAI's updates, discussing the improved usability through iterative refinement and its potential as a tool for creatives rather than a replacement. They also touch on the rapidly increasing user expectations for AI capabilities.

Diving into the business side, the group explores the high valuations and fundraising rounds of AI startups like Cursor, questioning the economics behind subsidized API calls, the true cost of compute at scale, the potential for RLHF data to build moats, and whether open-source AI models and tools (like Aider, Augment, Stagehand, Open Manus) can effectively compete with vertically integrated systems. They also discuss emerging AI-driven business models in B2B, services, and custom software development.