Software Engineering Is Becoming Factory Engineering — Zach Lloyd, Warp

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Original language: English

Original video: Software Engineering Is Becoming Factory Engineering — Zach Lloyd, Warp · Channel: AI Engineer · 20:13 · Watch on YouTube

Topics: AI agents, Enterprise AI applications, Software engineering with AI, Open source and software ecosystems

Summary

Zach Lloyd argues that software engineering is shifting from interactive coding with AI agents toward automated software factories that manage much of the development lifecycle. These factories can route ideas through triage, specification, implementation, review, verification, shipping, and monitoring, with humans involved at important decision points. He explains how Warp used automation to support its open-source project and outlines the components, measurement, and feedback loops needed to improve a factory. Engineers may write less code but ship more, while human judgment, adaptability, and product sense remain essential.

Key points

Lloyd predicts that software engineering will increasingly resemble factory engineering, with engineers building and managing systems that build products.
A software factory can automate the development lifecycle, from idea intake and triage through implementation, review, verification, shipping, and monitoring.
Warp open-sourced its project partly to build a public factory that could help manage issues and contributions.
As software becomes cheaper to build and clone, companies need advantages beyond the product, such as distribution, ecosystem, brand, or community.
Building in the open can strengthen an ecosystem, brand, and community; automation can help manage noisy issues, pull requests, and review work.
A factory needs automation, context and skills, human checkpoints, and self-improvement capabilities.
For difficult tasks, agents can produce product and technical specs before a coding agent implements them; agents can also review code before humans assess risk.
Monitoring shipped software and feeding observations back into the workflow creates opportunities for continuous improvement.
Engineers will likely write less code and ship more, while still facing challenges in tuning agents and processes for their products.
Adaptability, critical thinking, understanding systems and architecture, and human product taste remain important.

Chapters

Start	Chapter	Summary
00:01	From interactive agents to software factories	Lloyd introduces his background and argues that development is moving from AI-assisted coding toward automation of the software lifecycle.
03:13	The software development loop	He describes a factory workflow in which agents handle tasks from triage through monitoring, with humans stepping in at key review points.
04:19	Open source as a reason to build a factory	Lloyd explains why Warp open-sourced its project and how automation can make open-source contributions easier to manage.
08:02	Components of an effective factory	He outlines the need for automations, context and skills, human intervention, and self-improvement, then walks through factory inputs and workflow steps.
12:13	Factory infrastructure and feedback loops	Lloyd discusses factory architecture, measuring efficiency, and using observer agents to improve the skills used by other agents.
14:51	What the shift means for engineers	He says engineers will write less code but may ship more, and frames tuning agent systems as a new engineering challenge.
16:27	Questions: building factories and career skills	In the Q&A, Lloyd discusses where teams should focus, the value of adaptability and technical understanding, and the importance of human product judgment.

Quotes

the discipline of software engineering is going to become something more like factory engineering. — 01:37

we built a whole set of automations, really a software factory, around managing the open source project. — 07:31

everyone in here is going to code less, but they’re going to ship more — 15:24

human taste, human input, human product sense — 19:42

Concepts and entities

Zach Lloyd, Warp, Google Docs, build.warp.dev, software factory, Spec-driven development, product spec, tech spec, skill loop, factory agents, observer agents, CI/CD, GitHub

Full transcript (original language)

00:01 [music] >> Okay. Hello everyone. I’m excited to be here. My name is Zach Lloyd. Today I’m going to be talking about self-improving software factories, the new open-source model, and basically what I think is happening to development. A little bit about me just to begin. So, I am a former principal engineer from Google. I used to lead engineering on

00:35 the Google Docs suite. I’ve been an engineer now for over 20 years, a long time. I am still shipping frequently, but I haven’t written a line of code in the last 6 months. And I’m the founder of a company called Warp. Warp, if you’re not familiar, is a open-source agentic development environment. You may know us as a terminal. That is how the company started. We’re basically a terminal that has agents built in. We open-sourced it a couple months ago, and I’m going to talk a little bit about

01:07 that experience and the motivation for it. It’s a popular open-source project, over 60,000 GitHub stars. We’ve had a couple hundred people contributing. We have over 800,000 active developers who are using Warp. And increasingly, we are focused not just on the terminal aspect and the interactive aspect of development, but more so on how do you automate development? I’m going to talk mostly about that. So, the thesis that I have is that the

01:37 discipline of software engineering is going to become something more like factory engineering. And I’ll explain what I mean by this in a minute, but just keep that in mind. That’s That’s what I think is going to happen. If you look at development over the past couple years, it’s I mean, it’s crazy how it’s changed. We’ve gone from a world of chat and AI auto complete to cursor co-pilot to the phase that we’re in now, which I consider to be mostly

02:08 interactive agents. So, you’re sort of sitting at your computer and you are telling Claude code to do something, you’re telling Warp to do something. And I believe what’s going to happen over the next 6 months, a year, hard to predict the pace, is that we’re going to move much more towards a world of automation. But, before I get into that, just quick show of hands, how many folks in here are building with agents? Ever Ever 100% makes sense. Uh how many How many folks are building typically with multiple agents at one time?

02:40 So, again, almost everyone. How many people are running an agent right now? I’m not offended. I would Okay, that’s totally cool. I would be doing it, too. Uh how many folks are running agents in the cloud out of curiosity? So, that looks like less than half, but still significant. Uh and how many folks have have set up a system internally to automate the whole software development life cycle. So, everything from like triage, specking, implementing, reviewing. So, I see

03:13 some hands. So, some people are doing this. So, this is what’s going to happen. Uh every project of significant size, I believe, is going to have something like this. Um and it’s going to look kind of like this big loop. And everyone is talking about loops. There’s nothing that complicated about loops. This loop says a cloud software factory. This loop could literally just say like the software development life cycle. It’s the same thing. Um but just to go through this loop, it’s like ideas are going to come in at the top. Agents are going to do triage. If something is complicated, they will write a spec.

03:47 Uh these little blue boxes are where humans step in. Humans will review the spec. Uh agents will do the implementation. A human and agent will review the code. Agents will verify. Human will review the product. You ship, and then you monitor, and round and round you go. Uh and this is what software development for better or worse I think is going to end up looking like. So, I repeat the thesis which is that if this is what software engineering is going to look like um software engineers are going to be the ones who end up building and managing these factories. >> [snorts]

04:19 >> Now, I promised at the beginning and I put in the title of the talk that I was going to talk about open source and so I want to do that for a few minutes. I’m going to take a quick digression. Um I bring up open source because one of the main reasons that Warp open source was to build uh build a public factory. Um and so this is a picture of this website we’ve built called build.warp.dev which shows all of the issues that are flowing through our system and what state they’re in, what agents are working on

04:51 them, what contributors are working on them. And it’s kind of like a proto-factory done at scale. It’s not working perfectly, but it is working. And one of the reasons we open source was to try to build this. Um just in general, I think it’s interesting to talk about open source in the time of agentic development. This is a really stupid graph, but it’s like it’s just it it you get it? It’s like it’s becoming much cheaper to build software. Um a corollary of that is that

05:23 it’s becoming trivial to clone software. And so if you are in the software business, I don’t know how many folks in this room are in the software business per se, but it’s very hard to build a software business if it’s free to build software. It’s hard to capture the value, especially if a competitor can clone. And so my big takeaway or big tip for everyone in here is that the first thing you should do is patent your code. I’m kidding. Don’t just It’s a complete joke. >> [laughter] >> Don’t don’t do this.

05:54 Uh my my first tip is obviously you need to have a great product. Uh this has always been the case um but I would say a great product probably was never enough, but even now more than ever, if you think that you’re going to build a great software business just by building and shipping a great product, you’re probably not going to succeed. Uh, you need advantages beyond the product. And so those advantages could look like distribution, ecosystem, it could be that you have a great brand or a data mode.

06:26 You might have capital, um, but if you’re a startup, again, I’m coming from the startup world here, you just don’t have these advantages. And so you you still want to break through. Uh, and one of the ways that I suggest doing this is by building in the open. And so to be clear, it took Warp 5 years of building closed to sort of make the leap into building in the open, and I’ll explain why. But if you build in the open, um, it helps build your ecosystem. It it can take you from being like hated

06:57 on Hacker News to like tolerated. Uh, it can burnish your brand, it creates community, and so there’s all these advantages to it. Uh, and some of the things that I think have traditionally been a pain, um, can now be managed. And so like the traditional, you know, pain of open source might be something like you get a lot of noisy issues. You get sloppy PR’s. You can end up in code review hell. You can end up having to spend a lot of time verifying changes. And so the solution, so kind of a long-winded

07:31 way of getting to this, for open source, or at least for Warp in the case of open source, the thing that made us finally decide to do this was that we built a whole set of automations, really a software factory, around managing the open source project. And so, like I said, this is what I think the future is going to look like. I’m going to drill into it a bit just to get a little bit more technical for folks who want to try to build something like this for their own projects. So what are the components of an effective software factory? Uh, it’s

08:02 really not that complicated to start or at a high level. You need a set of automations. you need a way of providing context and skills, you need a way of bringing humans in at the correct time. It’s sort of like when things get stuck on the factory. And then a really important thing is you need some set of self-improvement capabilities. So think of this as loops. And if you do this right in the open source world, you can get a you know, world where agents are helping contributors contribute. They’re helping

08:34 maintainers maintain. And I want to emphasize there’s nothing special about open source here. I think every sizable project can benefit from this approach and I I predict that every every company every open source project will have at its core a software factory kind of like the way that CI/CD became just like oh of course you have that. Uh maybe I don’t know when that happened 10 years ago. Let’s tour the tech the factory floor for a second here. So you’re not going to look at this. This

09:05 is too much. Uh the the point of this slide is not to have you read the workflow. It’s that the factory floor is basically a graph um of steps where you are defining like okay, how does software get built for my product? And it looks pretty similar for every product. Things come in, they flow through. Um they get stuck at certain points. Um and you know, broadly speaking just to back out a second. So there’s the inputs. The inputs are really ideas.

09:36 Um the inputs could be coming from your team, they could be coming from your users. Um the inputs themselves tend to come in through certain channels that you should think about as like your task tracker is an obvious one or Slack or Teams like your communication channels. They could come directly from like your terminal or IDE. They could come from your monitoring systems, but there’s some set of inputs that bring work into the factory. There’s triage. This is a really important step. So

10:07 again, I boil it down to something very simple, but like you want an agent that is looking at issues as they come in and just saying, you know, if this is easy and this is unambiguous, just implement it. And this is how you can actually get going with a factory. If an issue is hard, uh I recommend having uh an agent that produces specs. Folks in here using spec-driven development, show hands. People follow this? Okay. You can do this many different ways, but I think it’s very effective. The way that uh we do it at Warp that I recommend is having an agent write what

10:41 we call a product spec and a tech spec. Product spec describes the product invariants that you’re building towards. Tech spec describes the architecture and the shape of the code. Then you have an implementation agent. This is basically a coding agent that runs somewhere in the cloud. It makes a diff. You can use all sorts of coding agents for this. You have review. This is in many ways the most painful part. Like I expect that people are a little bit tired of reviewing identical

11:12 slop. Uh I would have an agent do code review first. And then it becomes over time like a risk management exercise of like when do you bring in humans to do code review, but you want to have a step in here where humans can do it. This is a very important step uh for certain types of apps, the verification step. So, this would be things like computer use. Uh if you’re building a a sort of UI, having the computer actually use the code that the agent produced in producing videos and screenshots.

11:43 CI/CD, still use it, obviously. Uh and then monitoring. So, our agents don’t stop in your factory when code is shipped. They should observe what’s been shipped. Is it crashing? Is it being used? And round and round you go cuz you take the output of this monitoring step and you feed it back into the top of the factory. Now, you could try and build this and um I went to a talk earlier that my friend Adam gave where Uber has built an internal version of this. Um and it’s

12:13 pretty cool. I would say for most you know, most organizations, it really depends where you are, you’ll be able to build a simple version of this easily, but to build a thing that actually scales is probably like you should probably focusing on your own product not building this infrastructure because there’s a lot of stuff that you end up wanting. You’re not again not supposed to read this. It’s just a lot of stuff. If you do build it or if you buy it, you’ll end up with something that looks kind of like this which is um

12:45 you’re going to have a bunch of ways of getting work into your factory. That’s what’s in the top here. You’re going to have a sort of control plane for figuring out how work gets distributed across your factory floor. You’re going to have the actual place where the work happens and so that’s going to be cloud sandboxes. It’s going to be figuring out what agent to run. So what’s the harness? What’s the model? And then finally, I think this is a really important thing. You’re going to want to set up some kind of data plane that sits below your factory. And so that’s something that lets agents

13:17 remember what they’ve done, learn um improve over time. The factory is not just like a product. It’s also a mindset and this brings me back to the thesis I had at the beginning. You need to measure and improve. So factory this is where the I don’t know, you can stretch this metaphor as far as you want, but like you should be thinking of efficiency and so that means like how much software did you ship? How much did it cost in terms of

13:50 human time and token time and you’re going to want to measure this and try to improve it over time. A key part of this is creating loops. So uh loops are again, they they sound complicated, they’re not that complicated. Loops are basically ways of uh having agents improve um by like observing what they’re doing, where they’re failing. Um and so a common kind of loop that you’re going to want to put in your factory is like a skill loop. That means you’re going to have your

14:20 factory agents that are running skills, and then you’ll have observer agents that are seeing how those skills are being applied, looking for issues, and trying to improve the skills. So, for instance, if you had a code review agent, and it was leaving comments, and a senior engineer engineering team is going and correcting those comments, you’d want an observer agent that would look at that and basically improve the code review agent for the next run. This is one thought just to leave folks with, like, what is Where does this

14:51 leave engineers? Um I think you’re going to have to get into this mindset. And I’m trying very hard to get our team into this mindset. It’s not always easy. That you’re not just building the product, but you’re building the thing that builds the product. And that’s like it’s just different. It’s more like process engineering or manufacturing or something like that. Um and you could think like, okay, maybe that’s a bummer. Like, is that a bummer? Or is that uh you know, and it depends. Like, it depends what

15:24 joy you get out of software engineering. If your joy is in writing the code, I think you’re everyone in in here who is a software engineer is going to be writing less code. But if your joy is in shipping product, like, it’s never been a better time, and this is actually where I find my joy. It’s like I like building and shipping the thing. So, everyone in here is going to code less, but they’re going to ship more, and that’s going to be a trade-off. But if you approach it like you’re a a factory engineer, I think you can see like that there’s

15:55 still a really cool set of engineering challenges. Um you can almost think of it as like meta engineering. Like, how do you engineer your system of agents to be the best possible engineering? But I think it’s a very compelling and interesting set of challenges to solve. So, that’s it. Um uh for folks who were interested, uh this If you follow the link on this QR code, I’ve set up um a open source GitHub repo where anyone who wants to try building their own factory agents

16:27 can do it. This uses Warps agent platform as part of it, but you honestly you don’t have to use it. I’m not trying to like push into our product, but this should give you a good sense of like, okay, if you want to set up an agent that does triage or an agent that does spec writing, how do you actually do that? How do you get from like the theory of working with a factory to actually putting it into practice? I don’t know if we have the capability to do questions in here. I saved a few

16:57 minutes for questions if anyone has questions, otherwise I will I will wrap up. Yes. >> Yeah, I have a question. So, there’s a bit of a tension in what you said where it’s like, you don’t want to build this cuz this is a lot of work. >> Yes. >> But you are also a factory builder. Like, where do you stand >> It’s a great question. So, I said something that’s almost contradictory. I think you should The way you should think of it is like, everyone’s going to deploy some sort of factory, but then the tuning of the factory, the like, are these the right skills for my domain? Is this factory

17:27 building my product in the right way? I still think there’s a bunch of interesting engineering challenges. And for some places you can build this, but again, I think I think that the you should probably be focusing on building the core product for your company for the most part, but there’s a bunch of like tuning and like figuring out how to make the factory work for your product that matters. It’s a great question. Yes. >> Hey Tom, thank you so much. Um, I had a question. So, if you were a college student right now >> Yes. >> graduating and entering the workforce, where would you be spending your time?

18:00 >> Yeah, it’s So, the the question in case people couldn’t hear was like, if I was a college student graduating and entering the workforce right now. So, I think that the most important skills in this new world are adaptability. I think that that’s critical thinking. It’s like the the speed at which you can learn. I do think, I don’t know if you’re a computer science student, but I still think there’s a ton of value in understanding like the underlying systems and architecture and being able to reason and understand the code, understand the specs that agents are written sorry I writing. So,

18:34 I would focus on on those skills and like I don’t know we’re hiring more people than we’ve ever hired. There’s a lot of kind of like misdirection around like you know, people not being hired because of AI that’s not the experience we’ve had so far and what I’m looking for are like really adaptable product focused thinkers who can like basically be great problem solving problem solvers even as the underlying technology changes. Yeah, I think I’ve time for one more question. Yes.

19:12 What about the like so the question was what about the the product taste in like the how do you actually build something useful? I think it’s probably the right like maybe the framing and like uh where do the ideas come from? And so I think that um the problem with the factory metaphor even though I’m like leaning into it because I think that’s like there’s something to it is that it can kind of sound like uh mechanizing or dehumanizing um and I still think underlying all of this the only thing that matters is like are you building something useful? And

19:42 if you have like a a factory that is like turning out that no one cares about it’s like what’s the point? And I think that human taste, human input, human product sense, um humans like guiding at those touch points where you can’t automate stuff is absolutely like essential and like that’s like what I do all like I’m trying to figure out what do what do customers want? What do people want? What’s going to be valuable to them? So, I think that’s an absolutely key point to it. I think I’m at time. So, I have

20:13 to go. I hope folks enjoyed this chat. I’m really grateful for being invited to speak. So, thank you all very much. >> [music] >> Hey.