Yet Another Value Podcast - Investing in the SaaSpocalypse with Heller House's Marcelo Lima

Episode Date: April 23, 2026

In this episode of Yet Another Value Podcast, host Andrew Walker speaks with Marcelo Lima of Heller House Capital about the "SaaSpocalypse". Marcelo shares his perspective from years of following software companies, arguing that fears around AI disrupting SaaS are overblown. They examine whether AI tools threaten incumbents like Salesforce or instead strengthen them through faster product development. The discussion covers valuation compression, enterprise software moats, customer behavior shifts, and the role of AI as infrastructure. Andrew also raises concerns about disruption risks, insider signals, and workforce changes, leading to a debate on whether this moment represents risk or opportunity.Marcelo's memos on softwareMemo 1: https://mailchi.mp/hellerhs/opportunities-in-softwareMemo 2: https://mailchi.mp/hellerhs/opportunities-in-software-part-ii_________________________________________________________[00:00:00] Introduction and SaaS apocalypse topic[00:02:24] Disclaimer and setup discussion[00:03:26] SaaS selloff and market reaction[00:07:58] AI disruption concerns raised[00:10:09] Valuation compression and risk pricing[00:14:24] Salesforce adoption timing shifts[00:16:09] Incumbents’ advantage and feedback loops[00:20:57] Headless software and interface changes[00:22:29] Backend value versus frontend control[00:27:02] Historical analogy with Slack usage[00:29:22] Insider buying skepticism discussion[00:34:36] Power law dynamics in SaaS[00:35:53] Company earnings and AI impact[00:36:36] Adobe Lightroom AI example[00:40:11] Bloomberg replacement with AI tools[00:42:25] AI tooling limitations and costs[00:46:02] Bugs and reliability challenges[00:47:24] Preferred SaaS companies discussed[00:51:28] Stock compensation and dilution concerns[00:55:59] AI productivity and hiring dynamics[00:56:27] Opposing view on engineer demand[00:59:16] AI increasing work intensity[01:00:23] Enterprise software reliability moat[01:04:49] AI as infrastructure layerLinks:Yet Another Value Blog - https://www.yetanothervalueblog.com See our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimerProduction and editing by The Podcast Consultant - https://thepodcastconsultant.com/

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Today I have Marcello Lima from Heller House Capital on. We are going to have a wide-ranging discussion on software as a service, the SaaS Poclops. Marcello has been investing following these companies for probably over a decade now. He's got a really interesting perspective. He's published some interesting memos on why he thinks the current opportunities are overblown. But I think when you hear the podcast, you'll hear, look, it's not the smaller, crappier companies. He actually calls one out in particular that I'm not. I just got an opinion on and alert on

today during the podcast, but he's really focused on the best of breed, the best software companies out there, the Salesforce, the Adobe's another one he mentions. He's going to say why he thinks this is overblown and why this actually might be a benefit, and you know, he's got, he's thought deeply on the subject.

So I think you're really going to enjoy it. I know I enjoyed it. We probably went for almost an hour and a half. So it's a really interesting podcast. We're going to get there in one second, but first, a word from our sponsors. Today's podcast is sponsored by Fiscal.AI. Fiscal.AI offers a first of its kind, real-time, fundamental API tracker. Look, why do I mention that?

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And if you talk to them, go ahead and tell them I sent you. All right, hello, and welcome to yet another value podcast. I'm your host, Andrew Walker. And with me today, I'm excited to have Marcella Lima from Hellar House. Marcello, how's it going? Good, Andrew. How are you? I'm really excited for this podcast, to be honest with you. I've been looking forward to it.

I think we planned it a couple weeks ago. I've been looking forward to it for a while. We'll get there in one sec, but first disclaimer, remind everyone, nothing on this podcast is investing device. There's a full disclaimer in the show notes at the end of the podcast, all that sort of stuff.

So you can check that out for yourself. Marcelo, we are living in the SaaS Poclips. You have been following investing in SaaS companies for a long time. You've published two kind of rebuttals to the SaaS, to the SaaS populace narratives in the past couple months. If you give me a link, because you're,

you published them on MailChimp, So I'm not sure if I have a link or not. I include a link in the show notes if you want to make them public. But just thought I'd have you on to discuss SaaS Poclips and everything. I've got tons of questions, tons of notes. But I'll start right now. You know, I think your argument is this SaaS Poclips narratives are overblown. And there's kind of a generational opportunity to buy some of the best companies the world has ever produced.

I'd love if you could just talk about that and, you know, why you think this opportunity, why you think this is overblown. And again, I'm looking. You'd be shocked at how long my notes list is for this podcast. Yeah, thanks for having me, Andrew. It's a long topic. But in short, I do think that I'll give you some context. I've been following a lot of these companies since probably around 2018.

And I've been following them very closely. And I've been using, I used to be a software engineer in a previous career, and I've been using Claude code a lot recently because it got really good. And I tried it last year when it was still not very good. But I've been using all the leading models in parallel because I sort of send queries to all four, see which one is better. And I've been doing this for several months now since Gemini 3 Pro came out. And I've been seeing a lot of these companies to name three, maybe all.

for, you know, Adobe, Atlassian, ServiceNow, and Salesforce to different extents have been putting AI into their products for quite a while now. I think Service Now's Pro Plus Q, which has AI, went GA, if I'm not mistaken, it might have been late 2023. Don't quote me on that. I think that's right. So, and they've been talking about the adoption of this AI enabled skew for years now. So it was very shocking to me that starting, I don't know if you remember the very beginning of the year, this year in January, like the people came back for vacation

and then all of a sudden the trading days really began in earnest. And you saw software as a service sort of gap down and semiconductors gap up. And this sort of alligator jaws, right, just sort of went and you saw just semis explode and SaaS just get systematically liquidated. And we heard even at the end of January from the Jeffrey's trading desk, get me out at any price, 10 to one volume, selling versus buying and software names, these things are uninvestable, et cetera. And that to me raises sort of a red flag in my head because I'm like, well, you know, are people, did people not know what they owned? what's going on.

They study these companies or are they not aware that these companies are putting AI into their products already and have been doing for a while. So for somebody like me who's sort of sometimes, to my detriment,

I'm so deep in the weeds that I can't, I don't have the theory of mind to understand what other people are thinking. And I couldn't understand the perception issue. And so the perception is, again, that this is something new, whereas to me it wasn't something new because I've been following these companies for a long time.

And to me, it was like, what is going on? Sure, Cloud Code is much more capable, but I do think that what that does is it makes software developers way more productive. And software developers work inside software companies. So Salesforce, ServiceNow, et cetera. these companies have armies of engineers. They write code for a living. I don't think that it makes any sense whatsoever that a company whose main product is not producing software.

So the example I pick on Volkswagen because they had that project carry out, which they were trying to develop software for their cars. It was a complete disaster. They lost billions of dollars. I pick on PepsiCo because they sell snacks, but you can sort of fill in the blanks with any kind of company. The core competency is selling cars, is selling snacks.

It's not developing software. And it's not like these companies are going to all of a sudden get that DNA and start developing software just because Cloud Code came out. So to me, it was always a tool that would accelerate the roadmap of existing software companies and not turn a, you know, a poodle into a lion, so to speak, in terms of making these non-software companies all of a sudden geniuses in developing their own software. I totally hear you on that. And look, I'm a generalist and I'm probably a pretty dumb one, to be honest with you.

But let me just provide some pushbacks and thoughts and things that are floating around. Because as I've said before, I love to run into sectors where there's panic. Like, I just want to be the guy who is running into the, you know, somebody screams fire and a burning building. Everybody's running out. And my instinct is to run in, right? And I really run in, but I will say, like, I did banks in 2023. I did busted biotex in 2025, neither in the size that I should have done with the benefit of hindsight. So it's not like I'm saying, I'm a genius.

But I wanted to run in. And I'll just throw some random things out that worry me here. Number one, I think the overarching worry I had is the AI, tools that we are using right now are the worst AI tools that we will ever use, right? They're getting better every day. And I would point to you, I can use a topical one that's come up since we planned this podcast, you know, the Anthropic Mythos thing that is apparently so good at cracking and exploiting zero-day exploits that literally the White House is calling in all the presidents of the big banks and being like, you need to use this, anthropic, cannot release

this publicly. You guys need to use this to shore up your thing, right? I don't know if Mythos, you know, you choose a cybersecurity. company. I don't know if Mythos just changed their EB where, you know, it's going to be hugely positive. There's going to be a lot more consulting worse or if it just zero them out, right? But I can guarantee you Anthropos, every cybersecurity company had their EV and their terminal value massively changed by Mythos. I would say, I could imagine 15 different other, you know, things that Anthropic could roll out and as these AI tools get better, like I know Salesforce does a lot of stuff, but are you telling me ignore PepsiCo vibe coding in a Salesforce?

Are you telling me Anthropic couldn't say, hey, we're going to code a perfect Salesforce engine on our own and release it. And it's going to be maybe it's 80% as good as Salesforce, but it's going to be a heck of a lot cheaper. So that's just my number one overarching worry. Like, AI gets so much better. And then all these AI companies can buy code replacements that are 80% as good. And you get in a pricing war and just like, there's just a lot of competition coming. So I've got other ones, but that's the big worry that weighs on my mind here. Yeah.

Look, there's no question that there are legitimate worries, absolutely. I think that the compression in multiple is justified as a way to discount a lot of these worries. I do believe that the multiples have gotten so low that a lot of these companies are not priced for perpetual decline. And the way I quote unquote define that is if you just assume a temperature, discount rate, right? You have your model 1 over R minus G. R is your discount rate. G is your growth rate. If you plug in zero for G, zero growth, and your discount rate is 10%, 10%, 1 over 10% is 10% is 10 times. So let's just assume 10 times earnings or 10 times free cashful, whatever your preferred multiple is, a lot of these companies are there and priced for zero growth or even

price for perpetual decline on a forward basis. So lower than 10 times on a forward basis. So I do think that the market very, very quickly repriced these things to reflect a lot of that risk. So, yes, the barriers to building code have gone down. I'll give you sort of the puts and takes in my view. On the one hand, the barrier to generating code was never the real barrier, so to speak, because you could always go to different geographies. You could go to hire Indian consultants, for example, or consultants in the Philippines.

Or you could go to one of these platforms where you can hire folks to do jobs for you, right, on a contract basis. And they could produce code very cheaply, Eastern Europe, et cetera. And so you could replicate a lot of these things. I'll give you another silly example. I don't know how many people know this, but there's a free open source version of Photoshop. I think it's called PT GUI.

It's existed for decades. And a lot of different pieces of software have open source equivalents. And yet, consumers and enterprises, they choose to pay for convenience, right? They would rather pay $10 a month, a seat, $20 a month, whatever it is, to have a software that is constantly improving, that has security patches, that has compliance. I mean, when you get to enterprise software, it gets a lot more complicated because now you have things like SOC2 compliance, which you need to audit every single line of code.

And you're talking about a code base with millions of lines of code. And so it literally does not pass. My understanding is it would not pass an audit if you vibe coded the whole thing, if you could vibe code the whole thing. So I think the barriers to an enterprise software were never in a way the cheapness of the code. It was the trust, it was governance, it was regulation. There's also a saying where enterprise software, a lot of it doesn't get bought. Some of it does. Some of it's product led, but most of it gets sold.

So you need a whole sales motion and enterprise teams and system integrators, as you know, Accenture, et cetera, to implement these systems. Having said that, yes, at the margin, right, if you are a company, and usually smaller companies will do this because there's less risk. You're probably not going to see a PepsiCo vibe its own CRM, but you probably will see small companies vibe code their own CRM, to the extent that that's all they're using is simple functionality for customer relationship management. Obviously, CRM, the company, Salesforce, that's not what they are. They are, it's a whole suite of things. They started with CRM 27 years ago, but it's evolved, and they've acquired several businesses, and they've introduced all those. Until they change their ticker, I'm only going to think of them as a CRM. They've got to change their

ticker if they want me to think of them as something else. Yeah. Mark Benioff joked that he wants to rename the company, Agent Force. You know, you hit on one. There were a lot of things, a lot of questions, a lot of things that you hit on there that I want to talk about. But let me just start with the last one. You went on Salesforce. And I actually have a little interesting anecdote and it did them.

I was talking to a VC maybe a month ago. And they said, I might be getting the exact timeline wrong. But they basically said, hey, it used to be when we wrote a series B check into a company. That was basically the day where they would call up and they would get their first. Salesforce, Salesforce, CRM application. What we're seeing now is that companies aren't calling up Salesforce and getting their Salesforce CRM until late Series C, early series D. And I think the implication has we just got, you know, it was kind of like, hey, they still

need the enterprise great stuff, but they're able to push it back right now, right? And I thought that was really interesting because what small guys do in the beginning is kind of where the larger guys go, like small guys. You know, that's the advantage of being small. You're more nimble humor. And if people are just pushing back from series B to series D, I mean, Salesforce will be fine if at series D you're still getting it, right? But you could imagine where if people are starting to vibe cope and use their own tool at series B, maybe two more years for now, instead of series D, it's series E. And then instead of series A, it's like when we go public or not all. So again, that's just another way. I'm not sure if that's bull or bare case there,

but I thought that was an interesting anecdote, and that's one thing that's really stuck in my mind I've been thinking about just like the delay here, the small companies seem to be moving away from some of the larger things, and is that where the puck is going? Yeah, that's very legitimate. Very legitimate worry.

So a few thoughts. I guess number one is the company getting the series B check, are they delaying the adoption of Salesforce because they are vibe coding their own sales force in-house, or is it because they're allocating budget to Anthropic instead to use Cloud Code so that they can advance their roadmap quickly and get sort of a minimal viable product on the customer's hand quickly? Do you know the answer to that?

Based on my conversation, I'd have to follow with them. Based on my conversation, I think they were saying, hey, they're using internal tools to manage customer relationships at the Series B. But I don't want to say that strongly because, A, it probably depends on the specific company. And B, I wasn't really like pressing on the details on that. I was just kind of thinking, expanding my mind when he said that. Yeah. What I think, so sort of the overarching idea that I have is it is it is the incumbents prize to lose.

Because to the extent that they can, so they have this amazing feedback. loop where they have forward deployed engineers inside their largest customers implementing a lot of the software and they can see where the paint points are and they can then go talk to the mothership and say, hey, guys, we have to build X, Y, and Z because this is not working. This is clodgy. This is broken, et cetera. They have obviously the enterprise go-to-market teams that talk to all these companies as well. They have armies of engineers back at headquarters improving the software and deploying continuously

and making improvements in real time. A lot of the, you know, Adlasse, for example, is a company that pushes updates daily to its software. So given the fact that they have this feedback loop, it's really incumbent on them to improve their, now that they have this incredible leverage that ClaudeCode and Codex has given them

in terms of being able to speed up their development and these tools are amazing, they have the onus is on them, really, to improve that. software as fast as possible to prevent what you're describing from happening, right? Let me provide so much value to the customer that it becomes irresponsible for that customer not to pay the monthly fee for my Salesforce seat, for example. One more thing. Did you see the headless announcement that Salesforce just made? Salesforce 360 Headless? Mark Benioff tweeted about it

today, came out a couple days ago. This, I think, is extremely important and interesting. And basically headless, what that means is, for the benefit of the audience, if people don't know. So, for example, if I am, let's say I'm in cloud code on my terminal, on my computer, and I want to interact with Excel, I can use, Cloud Code can use a couple tools. It can use Open Pixel, which is a Python library. It can use Excel wings. And it does so in a headless fashion. In other words, it doesn't have to open Excel. So I never see the Excel user interface.

Cloud code never sees it. It's not like Cloud Code is going in there and clicking buttons and editing cells. What it does is it uses these tools to go into Excel programmatically and change this and edit the cells for me. So that's what Headless means. And you can access a lot of different pieces of software. That way you can access browsers in a headless fashion as well in the background where it doesn't show up in your computer. Okay. So what Salesforce did is they exposed all.

the functionality on their platform, whether you're talking about Slack or Tableau or Mulesoft, et cetera, in a headless fashion through model context protocol interfaces, which is kind of like an API, like a way for the model to talk to, for your model to talk to their model, for your model to talk to their software. And what this does now is this dramatic, this makes it dramatically easier to program on top of Salesforce. And you now can build any kind of user interface you want because you've got these Lego bricks, which are the MCP servers on Salesforce's side. And then you can now spin up a cloud code window and you can say, hey, build me a React dashboard that allows me to look at my customers and look at my leads over

here. So a lot of the complaints were that you hear from people is, oh, Salesforce, it's legacy software. It's super ugly. It's clodgy to use. I don't like the user interface. Well, guess what? You can you can now have any user interface you can possibly imagine. So that's really cool. And look, you are deeper than this than me, but I'm using Claude and specifically Claude Co-Works to build like, we're both investors, right, to build really cool investing tools. Like one of the ways I prep for this podcast was my Claude Co-Work research function and AlphaSense,

Agenic, hey, deep dive, go deep dive these five stocks and like, just give me a report when you're done and all that type of stuff. But I would notice one thing you said in there, right? Like people complain about Salesforce functionality. Like it does strike me as if people are using Claude to use a very loose reference, if they're using Claude as the OS, if Claude is the thing that they're doing everything on and they're saying, hey, go to Salesforce and change it and present.

Like, it does strike me as that's, and it's kind of worrying if they're saying, I want to use Claude to create my custom interface. Like, what is Salesforce doing at that point? Like, what Salesforce is really doing is serving as, unless I'm, I could be wrong, but I mean, they're serving as the backend software and, you're also pulling, you've probably got a lot of data search for them.

But if Claude is the thing that you're using to come in, model, like provide all of the front end stuff, it seems like Claude is pretty damn close to taking over Salesforce, to taking over Salesforce or having the Cloud team just said like, hey, Salesforce is a $100 billion company. Everybody's vibe coding their own front end in Salesforce. Why don't we just come and take them out and it won't take that much investment? Does that make sense as a risk factor?

And I could be completely wrong. I could be completely wrong. how it's happening. But it strikes me, if everybody's using Claude as the thing, the back-end thing can be switched off pretty quickly. Yeah, that's a very common worry. I don't think it's right. I'll tell you why. This is not new. So when Slack went public, this was June 2019, I attended the Slack Investor Day, and I was talking to Stuart Butterfield, the co-founder, and he said, he's like, you know, I never opened Salesforce. And by the way, Slack and Salesforce had nothing to do with each other back then.

This is before Salesforce obviously acquired Slack. Slack was going public as an independent company. He said, I never opened Salesforce. When I go to a meeting, I'm in Slack. I just open my, I pull up my phone. I type something, a command in Slack, like a slash command in Slack. And I pull the latest notes on this customer that I'm about to meet. And customer XYZ has a million dollars of ARR with Slack, et cetera, all the notes.

And then when he's done with the meeting, he can just quickly type up the notes in Slack, and Slack will go in the back end and update Salesforce. And so does that mean that Salesforce was useless in 2019? No, because Salesforce, you know, these enterprise customers, they have very, very complex sets of who can access what. There's governance right behind all this. Which user can access what kind of data. There's tons and tons and tons of historical, let's say, 15, 20 years of historical customer information in there. Customers that you've interacted with, you've closed deals, they have called you. So you've got call center transcripts

from recorded calls that you have with them. You have contracts. There's a whole lot of things in there that sit inside this database. So you could, you know, to use the, I don't know if you remember when Satchanadella said that SaaS is CRUD, which is create, read, update, and delete. He just said, like, all SaaS is just a UI on top of a CRUD database. And that was, I think, December 2024. And sort of it caused like a mini, a mini SaaSpocalypse at the time, et cetera. you know, you could say that about a lot of things.

You could say that about Microsoft. You could say that about it, right? So I'll give you the counter to that. The counter is, and by the way, I'd love to hear what you're building, but I've been building some things using plot code, and they use the things that I'm building, they need to use Excel because I build all my models in Excel. I have all the financial data for all my companies in Excel, et cetera.

and what this has done, the software that I have built internally has now entrenched Excel because it depends on Excel existing. Like if Excel went away, I don't know what to do. Like, where are my models going to live? Where are my company models going to live?

Where I have the historicals? And so I don't think necessarily that just because, and by the way, Andrew, right? We're talking about a capability that Salesforce created today. It doesn't mean that tomorrow,

100% of the installed user base never logs on to Salesforce again and just uses CloudCode, right? This is sort of a spark. It's like an idea. It's something that they launched and now there's going to be an adoption. And of course,

part of that interface where people are going to interact with agents and build stuff is going to be inside Slack. It's going to be inside Salesforce. Part of the interfaces are going to be inside Salesforce. Now, does that necessarily mean that Claude, now, just because Claude is updating the database fields inside Salesforce,

does that mean that Claude can now replicate the functionality of Salesforce and completely delete Salesforce? No, because Salesforce has, again, all that governance information all that the business logic and all the customer history that Claude cannot see. I mean, unless you gave Claude, you know, mythos-like access that they could cyber attack your whole thing and read your entire right, work, graphic, permissions and all that. I mean, look, I'm a journalist. I'm not knee-deep in software all the time, but I think your Slack example at the beginning there,

where especially with the Slack CEO saying, hey, I don't even log into Salesforce, but he really need, I think that's a just really killer example of why Claude can't do this. I think it's a very good example. But let me give some more just patterns that run in my head. You know, Chag, are you familiar with this? CHGG, this is the company that got murdered by Chad ChbT, basically. For those who don't know, this was a mainly online company, you would use it for homework questions.

It was mainly at college students, right? You would say, hey, I've got a question. It provides answers. It worked with a lot of textbooks and everything. Chat GPT came out, the stock was down quite a bit because people said, oh, you don't need that. You just chat GPT it. You know, it's not lost to me. I went and studied the history of it.

In November, 2003, they come out and they say, hey, we're an AI beneficiary. We're putting in an ASR. We're going to buy back our stock like crazy. If the market's giving us a chance to buy it a discount, we're going to take advantage of it. You know, right now, fast forward to right now, Salesforce, we've mentioned them a couple times. A couple weeks ago, they come out with literally the largest ASR in history, $25 billion, if I remember correctly. You know, Monday.com comes out in between, if you read their 20F, they've got a little kernel on there that says they bought that 15% of their stock from, I think it's from,

it says up until the end of March. But if you think about blackouts and stuff, it's probably from middle of February's end of March. So 15% of their stocks and kind of a six-week window. I mean, these are aggressive things. You've talked about at least in a few others. CEOs are coming in at CEOs and boards of directors are coming in a big way and buying their stock on the open market.

So on the one hand, I see, hey, insiders are signaling, this is an opportunity. On the other hand, I say, hey, Chegg thought it was an opportunity two years ago, and they were dead. And by the way, the insider buying just to choose what, actually, I can't remember the exact price, but a lot of these insiders started buying at 250, at 225, and now the stocks are 180, 160. And I kind of say, hey, I love insider buying. I love big buybacks. I love these signals. But when I see that, I say, hey, do these guys really have a read on value, or is the landscape really shifting so quickly underneath their feet? They're kind of, you know, the guy who in 2024 says, our stocks trading at 10 times earnings,

and then earnings are falling off a cliff and everything's going terrible. So through a lot of actually there. I'd love to hear your thoughts on that. Yeah, that's a very fair point. You remind me also of, I can't remember which crisis it was, Andrew, where bank insiders were buying, it might have been the GFC, where they were just buying their stock all the way to zero. Lehman, I think both Lehman and Bursa Sturton had indexed.

insider buying literally the week before they go to zero. If I remember correctly, First Republic has insider buying right before they go down. Now, along that time, there are like 10 other banks where there's insider buyings and the banks make through. But there was banks in particular have CEOs who like to say, hey, this is great. Everything's fine. And then banks run zero. It's all over.

But yeah, I mean, it's very easy for an insider who feels comfy, things shift really quickly. They say our stocks have bargained down 30%. Bedbath & Beyond's buying stock at $45 per year in 2021. And 15 months later, their death spiral to zero. So, you know, I think every situation is, it has to be evaluated differently, right? Yep. And my mental model of the world is that things, it tend to, the distribution tends to be a power law distribution where you have, you know, the Pareto principle, where you have 20% of the people have 80% of the anchor. come, right, you see this distribution so frequently in the natural world, something like, gosh,

you know, 5% of the videos on YouTube are account for something like 95% of the watched hours. Yep. There's a lot of skew. And as you know, Hendrick Bess and Binders paper, 4% of all stocks in the last 90 years generated all the net wealth in the U.S. stock market, right, if they were held to during that period. So I do think that in the universe of SaaS, there's going to be a tail that's probably not going to survive very well because these are companies, or not survive at all, because these are companies that have perhaps point solutions or things that are more easily replaced.

I do think that the companies that have much broader platforms and are much more entrenched than mission critical to their customers and difficult to replicate, those are going to be the ones that, and by the way, have good management, right? You need management that is not asleep at the wheel. You can't be the guy sort of driving off the cliff without understanding what's happening. So these companies, I think certainly sales force is one of them, has Mark Benioff at the helm. And he, to his credit, he's very open-minded and he's very flexible. and he's been, you know, he has this mantra in the expert's mind.

There are, in the beginner's mind, there are many possibilities. In the expert's mind, there are very few. So he always wants to have a beginner's mind when he approaches any problem. And to his credit, he has demonstrated that over and over again in my view. So I do think that they are adapting and the fact that they are opening up Salesforce to allow any, agent to talk to Salesforce. Again, in my view, maybe I'm wrong, in my view, this entrenches Salesforce's position. It makes the platform, it increases the usage of the platform.

It increases the attractiveness of the platform. If maybe I wasn't, if I'm on the fence and I don't want to pay for a Salesforce license because I hate the user interface and I think it's clunky and old, I'm like, great. Now I can have all the functionality that it enables. I can have access to the entire suite of products. I can have Slack. I can have Mulesoft. I can have tabloo.

I can have all the things that they offer. But I can just pick and choose my modules. I can code my own user interface. To me, that's very compelling. So I do think it's on a, it's, you have to evaluate it on a case by case basis. One exercise I did, Andrew, in that February memo, which I guess I called it, March memo, because I released it in the beginning of March, was I went through all the earnings of all the SaaS companies that I thought were relevant. And I try to figure out, like,

which ones are on a front foot when it comes to adopting AI and putting AI into their product and which ones are seeing benefits already into their products. And a lot of them were, right? If you see, like, there's a list at the bottom of that memo that has all these companies. So I guess we will see, right? It remains to be seen. I hear you on the Chegg example, but I do think that so far the best companies are adapting very well. And you can see, so far, again, you can see this on RPO growth. You can see this on subscription retention metrics.

You can see this on all their financial metrics. but to your point, we don't know what's ahead still. You know, just building off that, that's one question I had. It's really interesting because the market adapts really fast. Again, I said the Chegg example where the Chegg stock just chatchy beats came out and check was just down, down, down right away. You've seen these guys and the sell-off starts at the beginning of the year. Most of them report earnings, you know, mid-February, early March.

I'm not seeing it's across the board because obviously, especially I like how you label the point solutions. businesses have been getting crushed. But for the most part, the really good software companies you're talking about, kind of the ones who span beyond just one product, not only have I not seen them report, hey, AI is taking our business, we're changing our outlook, that sort of stuff.

I've generally seen them along what you're saying, like, hey, we integrated AI into our business, and we think it's accelerating. The outlook looks great. We're seeing a lot of inbound, our forecast, like we're coming at the high end, that sort of stuff. So I'd love you to tell me, hey, am I wrong? Are there any of these bigger software companies?

And again, not point solution, but these bigger software or better software companies, we're saying where they're saying, hey, AI is kind of adjusting our outlook and has any of that, maybe in February they're saying everything's fine. And then by the end of March or we're talking mid-April, they're starting to say, hey, things are looking great. Have you seen any of that so far? You know, it's funny, right? Because people joke that this is like asking the barber if you need a haircut, right?

I mean, it's absolutely not lost to me that all these guys are saying, hey, AI is going to increase. I mean, this story I've said multiple times is now these were more point solution businesses, but I would talk to a few customers of a couple smaller, not sales force level software businesses in October. And the customer's like, hey, we're increasing our usage of this product because of AI. Their AI tools are great. We're increasing. And I was like, oh, that's all clear. And then I talked to them three months later.

And they're like, no, we stopped using it completely. the AI tools evolved and now we don't even need them and we've cut them out. And I was like, oh man, if the customers can change that much in three months, I've got to be really careful here. Yeah, it's so interesting. Look, I'll give you three personal examples. And then we'll talk about the companies, what they were saying in March, et cetera. Very quick, very quickly, I use Adobe Lightroom because I take a lot of, I take a lot, as a hobby, I take a lot of photos. and these are very, very large 100 megabyte, 100 megapixel photos in raw format.

So it's not like your typical, you know, point-and-shoe camera. And so I need a software to pull this catalog and it's hundreds of thousands of photos. And I need a way to organize them and I need a way. And now Lightroom has been, and I need to a way to develop them. So it's because I get them in raw format

and I need to update the lighting and the shadows and the contrast and all the stuff. This is real photography, not me taking photos my kid with my iPhone. I got you. So recently over the last year, Adobe has been adding a lot of AI features into Lightroom, and it's amazing because now I can go back. I'll give you a silly example. Let's say you went on some trip and you took a photo of this incredible photo, It was like this amazing landscape with a monument, whatever.

But there's like some pesky person who was standing there and they wouldn't leave this tourist and they're sort of invaded your frame. Or maybe there's like a dozen of them. Now you can press one button and it sort of detects everyone. It detects this distraction. Then you press another button. It's just like everybody disappears.

But I realize that this is table stakes now, but this was not table stakes a year ago. And it was certainly not table stakes on a raw. file that's 100 megapixels in very high resolution. You have to keep all the things consistent and all that. So this has made my back catalog more valuable because now I can go back into my back catalog and reevaluate photos that I would have thrown out but now are more useful, et cetera. And there's many examples like this. A second example is the one I told you about Excel, where I'm building this internal software. Now it uses Excel a lot. It's more entrenched.

I guess the third example, counterintuitively, I recently got out of Bloomberg. And I got out of Bloomberg because they, I used it primarily to pull data into Excel. The problem is a lot of their data was wrong. And I had a group chat with a bunch of Google, sorry, Bloomberg employees with about 19 other, it was me and 19 other. It was like 20 people in this group chat. And I kept, you know, MSCI, these are large companies. Your cash flow in, in Q4, you included the whole year of cash flow in one quarter instead of taking Q4. It was like endless mistakes like this. And every time I would point something out, it was like two, three days to fix it.

And they would loop in somebody else from this other data team and this other country for the foreign company. It was very cumbersome. Now I have a script on my desktop and I tell Claude to go get the latest financials. I have another script. It updates my spreadsheet in the background. and it's flawless. And I can have all the KPI that the company reports.

I can have everything exactly the way the company lays out. It's not in the standardized Bloomberg format, which you lose a lot of nuance there. I'm not as enthusiastically as I can. I know exactly what you're talking about. Yeah. Now, am I typical? No, because the typical Bloomberg user,

the network effect of the network effect to the chat. But I don't use Bloomberg chat. So I'm not the typical Bloomberg user. My main use case was the main one was data. So I'm very happy having left proof. So I think it's really on a case by case basis. Now, back to what the companies were saying, we're on the cusp. We're recording this on April 17th. SAS earnings are going to start next week. We'll see what they say, my guess is that they will still signal optimism because apparently that's what the sell site has been saying, right? The sort of the brokers, the analysts are all saying, hey, we're talking to the channel people, et cetera, and you see a lot of anecdotes from the channel

people. The other thing you hear is the large companies, again, picking on PepsiCoVW, you know, insert your big name there. They typically are looking to their existing vendors first, hey, I already have this relationship with you. I already pay you millions of dollars a year. Can you agentify this thing for me and make it more useful before I start exploring this other vendor that I don't know and I don't trust

and is not approved and hasn't passed my audits and all that? You hear that over and over again. So you hear that from SAP, you hear that from ServiceNow, et cetera. And it's, hey, it's a competitive world these companies, I think, are responding and have been responding for a while. And I think the pace is now accelerating. By the way, what service now released in the last couple days with this headlist thing,

it's very similar to OpenClawe. Have you tried OpenClawe? I have tried to try OpenClaw, and I am a tech, I'm just completely incompetent, and I had to fall back into Claude Co-Work, which I think is like the greatest product ever built. But if you send me a primer on how to use OpenClaught and not risk deleting all my files or I would love to get up to speed and be better at it. Yeah, I'm with you. I tried to try OpenClaught many times.

The problem I had was so I'm running a local cheap model, a free model actually, Gemma 4, 31B, which is the most capable of the free Gemma 4 models that Google released a couple weeks ago. and I'm running it because, again, every time I save something in Excel, it automatically gets picked up by the AI, the AI reads my Excel file, writes a narrative of what changed. It's actually super interesting and useful.

But it's a model that, so I tried running OpenClaught with this thing, but it does not work as a general driver for OpenClaude because it hallucinates a lot. Like I was having these conversations, and I'm like, are you crazy? You just told me this, but it's not this, blah, blah, blah. And then I realized this model is, it's very good for certain tasks, narrow tasks, but it's not good in a generic way.

So in a general way, what you have to do then is you have to then pay the API costs to Anthropic or Open AI to run an expensive model like Sonnet or Opus to direct OpenClaw. And that becomes very expensive. So I linked up Sonnet. and within two hellos, I was already spending $2 on the API dashboard. And I'm like, this is weird. And what I've heard recently is that people are spending $200 a day because the problem is every time OpenClaw says hi,

every time you say hi, openClawn sends a million tokens over because it sends all your context. And this is what I was going back to Salesforce on. If you look at what Salesforce announced, they, this context, all it is, just a text file, just a bunch of text files. And those text files say things like, my name is Andrew Walker. I'm an investment analyst. And I like these types of companies.

I don't like these types of companies. Whenever you edit my Excel files, never do this. Do not ever touch my system files, do not touch this folder. Do not delete anything without my proof. So it has all these guardrails. And that's what, and Salesforce actually open source this. Because again, it's just a bunch of files. I think they call it agent script.

So, yeah, so this thing is very interesting because they essentially open-clad themselves, which is predictable. I think everybody's going to do this. In fact, I think very soon you're going to see both Windows and Mac, they're going to ship the operating system is going to have open-claw built in. And you're going to have a model running locally built-in. and everything is going to be agentic on your computer and on your operating system. And that stuff will talk to clot code and we'll talk to different MCP servers to use all these different tools.

It's going to be a wild, interesting future. But again, I do think that back to our SaaS conversation, I do think it has the opportunity to further entrench the best companies that make themselves so good that improved their products so much that they just serve their customers in a way that makes it like why am I going to develop my own

software and by the way Andrew you develop your own software and then you have to test it and it's full of bugs like my stuff I have like 7,000 lines of code it's nothing. I find bugs every day and I've

told Opus 4.6 with high effort right? Did you tell it make no mistakes? Did you tell it make no mistakes and it still had bugs in it. Many times. And I've told it to do a code review many times. And literally, like, do a full code review. Make sure you have no bugs.

Like, it runs. Oh, yeah, I found these three bucks. I'm like, literally the same thing. Do a full code. And it three, four times, and it keeps finding bugs. And then on the seventh day, I get an alert on my phone. Something hit a 52 week low, blah, blah, blah. I'm like, this is wrong.

So I go back into CloudCode. It's like, oh, yeah, there was a bug. So I'm like, it cloud code. with stock prices. Let me hard pivot, though. I want to ask you a different question. So we've been talking, again, you invest a lot of the software companies that I've looked at or I've reviewed are on the lower end. As I'd like to tell you call it, they're point solutions. I think a lot of them, as I've come to view a lot of them as just absolutely right for Claude, AI, whatever, displacement. You invest in a lot better companies, but I'd love to know, in the past 12 months,

18 months, is there a portfolio company or hopefully a former portfolio company that you've kind of had a change a part on, right? You said, I could imagine end of 2024, seeing for a bunch of companies, hey, I don't think AI can come from this. And then in 2025 saying, oh, shoot, AI's coming for this. Is there a company or two you can throw out as an example of just kind of, hey, I think AI is coming for these guys?

Fortunately, nothing that I own. The ones I like, you know, again, this is not a recommendation. and do your own diligence. There's a disclaimer at the end of the podcast. Yeah, no, not to you, right? To the audience, I guess. I like, I think ServiceNow is very interesting. I really like the management team.

I really like the product. Very high retention, very entrenched. Salesforce is similar. Believe it or not, I think Atlassian is a good company with, I think, very poorly managed financially. And I think Adobe is also interesting and extremely. extremely cheap. I think most of these are priced for perpetual decline

with the exception of service now. So fortunately, I have not owned anything where I said, I have to sell this now because I think it's a zero or I think it's a perpetual decline or whatever. Are there any that I think are in perpetual decline? I try not to traffic in them, Andrew, because I've been burned so many times

with value traps and dead money and that sort of thing. So I honestly cannot come up with the name off top of my head. But again, thinking about this sort of power law dynamic, right? And there's such a long tail, like a company like Domo, I don't even know what they do. But I thought that they were a SaaS loser five years ago. It's tiny business. Honestly, I don't even know what they do. It is very funny you say Domo because I,

I have been, I have always been, but I've increasingly been into the corporate governance dark arts where people start, you know, I use lines kit as an example for a post today where they've never given their CEO a stock price based RSU, PSU, whatever. And then on Wednesday they gave them a stock price based RSUPSU for the first time. And the CEO has been there for 25 years. And it's linesgate, you know, Warner Brothers, Paramount, Netflix. I think that's a very interesting signal. Any price based signal is interesting, but after 20, years, DOMO, some of my AI generated scripts popped it up and they said, hey, you know, buried in the 10K, they gave their CFO a change of control agreement for the first time. And their CFO has been there since 2024. And he's actually been at the company since 2015. Why are they doing that? Well, they're running a strategic process in early March. They agreed to give, they agreed to let all of their directors and employees settle their bonuses

in stock instead of cash. Why are they doing that? So it's just funny you say that because literally it happened today. 10K drop last night, I believe. Let me go to a different one. Look, you've been, you mentioned you go to the sale, you follow these companies closely, you've been to some of these conferences.

One thing that I do worry about, because I invested in the busted biotech's before. When stock, I want to talk stock comp for a sec, but we can talk the valuation component in a second, but I also worry about the turnover and the turmoil that stockcom goes. You know, you give a bunch of very intelligent software engineers, top executive, salesports, whatever it is, your stocks at 100, you give them a bunch of options struck at 100 and some PSUs,

and then, you know, Monday.com, their stock goes from 300 to 60 as you and I are talking about it. All those options are never vesting. All those PSUs are borderline worthless. Now you've got a really interesting complication, right? We can talk about the valuation component of stock comp in a second, but all your engineers feel like they got robbed. And a lot of them are going to want to get made whole. And by the way, if you go from a $15 billion company to a $3 billion company, $300 million in stock comp used to meant that you were diluting yourself like 2% per year if I'm doing that quick math in my head right? Now you're diluting yourself 10% per year, right?

So all of a sudden, our engineers are way underwater and we need to go tell them, hey, all of you need to take 80% cuts in your stock comp. That's a recipe for a lot of turmoil. So I just want to ask you, are you hearing any turmoil at these companies? Or you could say, hey, this is the best of the best we're doing. with. You know, like this is where the engineers really want to be working. The answer is, I don't know, Andrew.

The only thing I can point to is we saw a similar dynamic in 2022. Because 2022, a lot of stocks also went down a lot. I mean, meta famously went down how much, 70%, something like that. A lot of these companies repriced the comp at the bottom or repriced the comp. to make their engineers hold to a certain extent. I don't know, and I'm sure we're going to hear from people correcting me on this, but I don't know that dilution exploded. I don't know how they structured this to make it so that it wasn't as painful.

Or maybe it was painful, and we're seeing that right now. like Atlassian, over 100% of their free cash flow is SBC adbacks. It's absurd. It's completely absurd. But I do believe that they will change things because, you know, they have a new CFO now. They were not happy with the old CFO. I think that they find, what I'm told is that they finally, and this is Mike Cannonbrooks, the co-founder, finally,

understands that he needs to have a proper glide path in a maturing, I mean, quote unquote, maturing company meaning like they're growing up, right, in terms of, in terms of revenue, to get that stock comp lower as a percentage of revenue over time. It's already a meaningfully manageable, I think at Salesforce, it's about less than a quarter of free cash flow is stock-based compensation. I have a quarter, yeah, yeah. And I think for service now, it's more. It's almost like, it's 57% of free cash flow is actually free.

So the rest is stock comp. But again, I don't have a good answer for you. I guess we will see. And if we see short covering, so in the beginning of the year, we saw the jaws of semis and software, and apparently there were levered baskets put out to make these best. If we see short covering and a reversal, maybe this is moot because we'll see the prices recover where it doesn't hurt so much. As much, yeah. Yeah.

Some companies, Service Now has come out and said, we will grow without headcount growth, which I think makes a lot of sense because they're all bloated. and now with the added leverage of cloud code, they should be able to, instead of doing riffs, reductions in force, they should be able to say, we're going to be able to grow without any headcount, net headcount, right? If we need different talent, we can shuffle people around. I think riffs are, I mean, this is one of the things you mentioned,

I can't remember what was in the thing you sent out earlier in this podcast, but it's not lost on people. You hear all these people saying, hey, a lot of our code is written, all of our code for a lot of these. really for our companies is written by AI. And I hear software engineers who say, I'm not writing code so much anymore as I am a project manager with, you know, five AI agents under me writing the code, and then I review. And, you know, the 10x engineer becomes 100x engineer. But the counter to that

would be if 18 months ago before all of these coding AI agents really started going, you needed, let's just use an even number, a thousand software engineers. Well, if all of your software engineers are 10x better, you definitely don't need 1,000 anymore, right? That would, would say 10 X better, it would suggest you need 100. Now, maybe you're growing so much quicker and you're so much more productive and there's so much more to do. Maybe the answer is 200, maybe it's 300, but you don't need 1,000. So you're talking about, you know, all these companies, I think they are going to have really interesting margin expansion opportunities. And I was saying stock comp, the counters that would be, you know, I was saying, hey, you've got to go to the employees

and say, hey, you need to take an 80% reduction in your stock comp because our stock's down so much. A lot of employees 18 months ago might not like that, but they counted that. What I've heard from people as, hey, it's not exactly high times to go get hired. These guys might swallow a bitter fell that they would not have swallowed 18 months ago in 2022. So very interesting push and pull there. True. On the point of not needing 1,000 engineers, maybe only needing 100 engineers, I mean,

there's this Peter Thiel thing where he says, I love to argue the opposite sides of the same thing. because to see if the argument fits. It's that's Charlie Munger's thing, right? I want to be the person who can argue both sides the best because then I understand it the best and I can kind of choose, yeah. Exactly.

So let's argue the opposite side of that, right? Instead of saying, I have a thousand engineers, they're 10x better, now I need 100 engineers instead. You could say I have 1,000 engineers that are 10x better. Let me keep them. and give them more tokens so that we can accelerate a roadmap, we can fix more bugs,

we can crush our competition because we can run faster than anybody else. To me, that's a lot more appealing, and to me that it sounds more right to me that that's what happens. Again, in the companies at the tip of that power law tail, like the best companies, yes, there might be, if you look at the long tail of businesses in America, let's call it,

there might be people who are firing people, firing employees because now AI is doing tasks that that employee did. I do think an aggregate, though, you will see, and this is another conversation, right, but I do think you will see net job creation as a result of AI. And I do think, by the way, this is an interview that Mark Andreessen did recently with Harry Stebbings. And Harry is a venture capitalist, and he made the point you made. And then Mark said, have you spoken to these software engineers recently? And Harry's like, yeah, yeah, I have.

And Mark says, and are they working more or less? And Harry's like, oh, no, they're working way more. And so because you have this AI psychosis, right? You're probably working way more. I said it. I record a random rambling where I just talked, and I said AI over the past 60 days or so, it makes me feel like I'm taking the limitless drug

where I'm investigating so many more companies and I'm getting a little bit more comfortable. Maybe I don't should do just do a podcast on AI. I'm getting more comfortable, but I'm investing so many more companies and I don't have to spend all my time. I don't do like screening of, hey, sort the whole market on a price earnings basis,

but it's handing me the flags, and I don't have to spend all my time doing stuff. And you mentioned Excel. You know, I say, hey, I want to look at BDCs today. I don't have to go price all of them by Price to Book myself. AI, send me all the companies on Price to Book. And by the way, I want companies that have insider buying. And then I can just go spend my time reading that. And so it makes me feel like the limitless drug.

And yes, I feel seen that the software engineers feel like I do where the tools are so much better. I'm having more fun working. I'm getting a lot more done. And I'm like having some of myself, like, dude, dial it back. You need to go do stuff other than sit at the computer and work. Yeah, you hit the nail on the head there. Yeah, I feel exactly the same way.

I actually, the other day, I woke up and I said, oh, you know, is it time, is it time to go to work already? Because I'm so excited to go to work. I have this project of him marching on. All right, let's get up. It's kind of dark. So I go to the bathroom. I leave my phone in the bathroom in the charger and I tap the screen and it's two in the morning. And I'm like, oh, no, it's not time to wake up yet.

You and I are having the same thing. I wake up. I'm like, I've got all these ideas. Marcel, this is really fun. There's just, I'm going to let you go because we're starting to run long. And I'm sure, but I want one last thing. Again, you sent me a thing. And there were several things in all your write-ups and stuff.

I hadn't thought about. But there was one really interesting thing that I thought beat back a lot of my, hey, will Claude launch this all. Can you quickly go through the warranty argument and the maintenance argument? of why these companies might have a moat that it's not so easy, you know, and my vision of, hey, we can just vibe coded and me and Marcello can hire a software engineer and go try to, you know, price out Salesforce at 5% of the cost because we're a skinny thing and we'll like go focus on one company.

Yeah, I think you're referring to that one throat to choke type of argument where you're not, when you're paying, let's say, let's pick on SAP for a second, when you're paying the SAP invoice, I guess first of all, you're the chief technology officer of PepsiCo to pick on them again, and you have this huge SAP installation that spans all of your factories, all of your invoicing systems, all your accounting systems, et cetera. The hurdle for you to replace that is very, very high because it's mission critical for your business. You're going to have a huge interruption if there's a screw up. By the way, I don't know if you remember the cyber attacks that happened, I guess, with Jaguar last year,

et cetera, like, you know, one or two hours of downtime for these companies, that's tens of millions of dollars of lost profits. You say Jaguar. I mean, for some companies, you think airlines, one or two hours, it's not just the revenue. I mean, it's safety. Like, a lot of these companies, it's really easy to forget, cable companies, one or two hours of downtime. Cool, the hospital's offline.

A lot of these companies you don't even think, but even companies you might not think of our life or death, they can kind of, I don't want to be too hyperbolic, but yeah, you have a downtime because you outsource to someone, it can be a really big skill. Yeah. So you imagine being the CTO of one of these companies that decided not to, you know, spend $20 million with Octa to get proper authentication so that people have permission or not to access their platform. and now they're facing hundreds of millions of dollars of losses because of downtime and lawsuits and all that because of a cyber attack. I think it's similar with these mission critical systems where I'm going to save some money by adopting a vibe coded solution. But in the process, I'm going to jeopardize my business. I'm going to put a lot at risk. And you're paying SAP not only for the product, you're also paying SAP for liability management in the sense that now you have you have, you have an SLA, they guarantee you certain nines of uptime every year, they have the liability

if there's downtime, if there's bugs, et cetera. So it's a different game when you're talking about mission critical enterprise software. By the way, the stuff, I'm sure with you, it's similar, right? The stuff that we are building for us, it's stuff for us. It's not like the software that I built, as amazing I think it is, it is not. enterprise quality software that's going to be that I can go and put on a website and earn money by selling it as a service. No way. This is crazy. So it would need a lot of work to go over that hurdle. And this stuff is hard, right, Andrew? Like I, sometimes I tell Claude, and I know that

Anthropic, by the way, keeps a list of all the bad words you say to Claude. Because I guess they want to see if people are dissatisfied or getting angry. I get angry at Claude so much. I've got Terminator in the back of my man. Every time Claude does a good job, I say, thank you so much, Claude. And I never, I don't curse anyway, but I never say anything mean to him. No, what you're hitting on is exactly right, right?

Like, I'm worried about vibe code and cheap solutions. And for these big companies, especially for things that, you know, their technology budget is big, but there's Salesforce budget, which just to keep using it, it's not going to make or break them. And if it goes down for a little bit,

the revenue of possibilities or disaster and something like SAP, it curse the business. you vibe code with they sell it you me and our engineer friend that we hired for 5% of the cost and it goes down we're not going to get that effort up for weeks as api goes down they're going to send 100 engineers and they're going to have that thing up and fix for you on a temporary basis probably it's going to be up and fixed in 30 minutes an hour two hours right and you're kind of as you said you're paying for that insurance and i think that's a really interesting moat it won't work if

you know claude comes and takes over and greets the greatest thing in every history for every AI for every software category, but it's a really interesting mode against the podcast. Marcel, this has been awesome. I'll give you the last words, but we're quite far over an hour at this point, but I've really enjoyed this. Sorry, Andrew, for going over the hour. Dude, no, no, I only do it when I really enjoy it, and I was really enjoying the conversation.

So I just, if there's anything else you want to sit on, happy to do it. Just the last thing is, I think, to me, it intuitively makes sense. And maybe this is wrong, but we'll see. Again, we'll see. But it makes sense to me. Anthropic had this enterprise software event in late February where they came out and said, look, we're not here to destroy SaaS.

We're here to partner with SaaS, with software companies, and become the infrastructure layer. To me, that makes a lot of sense. The same way that AWS is the infrastructure layer where software as a service and other software businesses run on top of, right? And they have all these primitives. They have S3, which is storage, they have EC2, which is compute,

they have databases, et cetera. I think it makes a lot of sense for Anthropic and OpenAI to be that substrate that provides intelligence, intelligent tokens that plugs into software. Now, from time to time, yes, Amazon has released competitive products. I don't know if you know MongoDB, Amazon released DocumentDB, MongoDB stock crashed and fully recovered, and it's up a lot.

Again, that's like a free alternative, or not for, but by the way, MongoDB, the substrate of that is open source, and they take that open source code and make it better and sell it for money. So to me, we'll see. We'll see what industry structure looks like, but to me it makes a lot more sense that these model companies are going to be more at the infrastructure layer rather than trying to take over applications and compete directly with ServiceNow or SAP, et cetera.

We'll see. No, makes total sense. I got to wrap it up here. This was great. Marcelo, Hellerhaus. Thank you so much for coming on. We're going to have you back on to either talk specific company, AI tools, for building, whatever you want to do.

Sounds great, Andrew. Thanks so much for having me. It's a good pleasure. A quick disclaimer. Nothing on this podcast should be considered investment advice. Guests or the hosts may have positions in any of the stocks mentioned during this podcast. Please do your own work and consult a financial advisor. Thanks.