This happens in every services industry, not just website development. A combination of new technology, experience, and the dispersion of knowledge drive down

This happens in every services industry, not just website development. A combination of new technology, experience, and the dispersion of knowledge drive down costs and margins. Nobody hires accountants to do their adding and subtracting, but there's still demand for experts in new regulations or the eccentricities of the tax code. The same thing is happening in website development (and really, all sorts of technology related services businesses). Over time, the low hanging fruit gets automated, and margins get compressed. As your firm evolves, you find margin in one of two ways. You either stay at the high end, and continuously learn new technologies and how to solve higher level problems for clients. You are continuously jettisoning your old bread-and-butter projects to work on the latest and greatest thing, solving new problems that didn't exist a short time ago. Or you follow the work down-market and focus on scale and efficiency. You figure out that you can get profit from process and automation, you turn your toolkit into an offering that you can sell at a high margin. Either approach works, but firms tend to get in trouble when they try to straddle the middle, and just sort of hope that clients will still pay big margins for work that's become routinized.