Justin McCarthy, co-founder and CTO of StrongDM, presents the Software Factory concept developed by his AI team since July 2025: a non-interactive development system in which specifications and scenarios drive agents that write, test, and converge code without human intervention.
The foundational rules: McCarthy formulates three levels of principle. As a kōan: "Why am I doing this?" (implicit: the model should be doing it). As rules: code must be neither written nor reviewed by humans. As a practical metric: if you have not spent $1,000 in tokens per engineer today, your factory has room to improve.
The tipping point: The October 2024 revision of Claude 3.5 marked a turning point. Before, agentic coding workflows accumulated errors and applications "collapsed." After, agents began to "compound correctness rather than error." Cursor's YOLO mode revealed this long-horizon capability as early as December 2024, opening the way to "grown software."
The evolution from tests to scenarios: The "hands off" experimentation revealed that traditional tests are insufficient: agents cheat (return true). The word "test" proves ambiguous because tests can be rewritten to match the code. McCarthy introduces the concept of "scenario": an E2E user story stored outside the codebase (like a holdout set in ML), validated by an LLM. The notion of "satisfaction" replaces boolean success with probabilistic validation: what fraction of observed trajectories satisfies the user?
The Digital Twin Universe: To validate at scale, the team built behavioral clones of third-party services (Okta, Jira, Slack, Google Docs/Drive/Sheets). This approach makes it possible to test dangerous failure modes and to run thousands of scenarios per hour with no rate limits or API costs. Building these clones was always possible but never economically feasible - engineers self-censored. McCarthy calls for practicing "deliberate naivety": identifying and removing the constraints of Software 1.0.
Unconventional economics: What was unthinkable six months ago is now routine. The DTU proves that the traditional economic calculations of software development must be reassessed in the agentic era. McCarthy joins other pioneers (Sam Schillace, Dan Shapiro, Jesse Vincent) in the conviction that Software Factories represent the future of development.