YouSaid · the spoken record

Jared Sleeper

lines on the record: 46
first: 2026-02-19
most recent: 2026-02-19
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“But again, I think we'll come back to the SBC point, but there's also no valuation support, no real valuation support. In normal times, if companies were like this, they'd be buying back a bunch of their stock, shrinking their share count, issuing dividends. I have a friend who works at a mutual fund where there's a lot of dividend funds that would love to buy dividend companies growing 10 to 15 percent, like a lot of software companies, but they're not, right? And so you've kind of lost the ability to kind of put an actual floor in underneath the valuations as a result of that.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“A great question. I won't speak to my fund because I think Kotu and Tiger Cubs like it are a fairly small share of the overall market in dollars, right? But if you look at trading volumes, the pod shop, Citadel, Ballyasney Millennium are a very large share of the volumes. And yeah, those people can't afford drawdowns, right? And the scary thing about this for them is Because it's not fundamental, because the companies aren't struggling themselves, they have no idea when it will stop”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, maybe. But look, we're in a world where folks are very happy to shoot first and ask questions later once AI risk comes out.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“I share your intuition, right? I can't say I fully understand the sell off in these companies. I wonder if there's not some parts of their businesses that are more services or consulting heavy that people are. There's often like combinations, right? Where like, I don't think anyone's suspecting that the S&P 500 is going to be displaced as an index.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. But yeah, I think the rough mental model is if there was any effort to outsource your job to India. That's risk because that tells you that that job can be done by someone who's not physically present in a space. And, you know, if you like working on problems in isolation, not socially with other people, grinding out math problems or little coding assignments, that's probably also a pretty tough place to be. It's going to be a more social world.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Demand for software. Like, we still are undersupplied with software in the world. And so there's quite a bit of room to go to add those. And so I'm not necessarily bearish on the demand for software engineers, at least for the next three to five years beyond that if things get weird, hard to tell. But then for people more broadly, I think The best advice is just adaptability, constantly trying and testing these tools, making sure you're staying at the cutting edge of them, and then being aware of what's human, right? I think in my work, inventor investing, there's a lot of data that comes out of human relationships that an AI wouldn't have access to. An AI can't call its friend at another fund and ask how a company's doing not yet at least. I have to make some friends first, right? They're talking.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“The alternative, well, so I think there's two ways to answer the question, right? There's like what do you do if you want to stay a coder? And then there's, what are the careers that are going to still exist over time, right? I think if you think about what's happening to coding, it reminds me a lot of civil engineering. And so it's kind of a funky example. But civil engineers used to work pen and paper doing calculus. Will this bridge hold up or not? That's been obsolete for a very long time. All those calculations are done by a computer. They're kind of clicking and moving and they go on site. They collect some data. They talk to stakeholders. And they're effectively project managing this computer that can do the physics part of their job for them. It's important that they understand the physics in case something looks strange, but they're not doing much physics, right? That's clearly where software engineering is heading in the near term. And a lot of companies, it's already there. And these companies were still hiring software engineers because that job is valuable. And in fact, each individual software engineer is way more productive than they were before. And there's happily elastic.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Great question. I think we will. I think we've seen that management teams do respond to price signals. If you look at the history of the sector, it was in 2023 when there was a round of layoffs and companies showed margin and then they've kind of resisted it for the last two years. The thing about it is layoffs can help you move faster, right? I think if you look within any company today, unfortunately, there is this spectrum of employees and how fast they've adopted AI, whether they're still doing things the old way or they're on Cloud Code kind of changing the way that they work. It's the obvious path forward for the sector. And I think if done right, it accelerates innovation.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. And like the top line results were actually pretty good. And so there's a real issue here on the financial side as well. It's incredibly disappointing to me that management teams haven't embraced this as a way to cut costs themselves. And I expect they will”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, there's this terminal value concern, which by far the most important thing, but there's also no floor, right? I was looking at the earnings report from Freshworks, which is a mid-market seller of customer support and IT management software. It trades at one and a half times EV to sales. If it ran at even a 10% gap margin, it'd be trading at 15 times earnings. Which is a pretty attractive place to be. You could get some value investors, maybe some European investors interested in buying it there, but it doesn't have material gap earnings. And on their earnings call, there was no real sense of trajectory towards that. And you see the share price down.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“When the reality is you're running break even, which is a very common state of affairs, we looked at the whole universe and the median public software company has a 5% non-GAP net income or gap net income margin, which is not enough to value the companies on. And so it creates this dynamic where”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Great question. And yeah, I mean, certainly theoretically true, right? But aside from Elon cutting 80% of Twitter X's headcount, we really haven't seen any companies take the pill and kind of realize the benefits of that. The SPC debate has been going on for a long time. I've had it ad nauseam over the course of my career. It's a real expense. You're issuing your employees stock. They value it like cash. Many of them auto sell it the day it vests for them. And I think what the problem that it creates for software companies is the management teams are addicted to reporting non-gap, which excludes the impact of SBC. And so if you are an entrepreneur who founded the software business, who's technical, hasn't really ever cared that much about the financial side, you're a product person, you may think that you've been doing a good job of being a profitable company because your CFO is telling you, well, we're at a 25% non-gap operating margin. That's pretty good.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“because they're transcribed somewhere. And so you have VCs in Silicon Valley who will refuse to use them, and you have other firms that are all in and recording everything that happens across the board so that they can upload that into AI as context. I think it's a really great point. And one of the things that makes me wonder is companies that are willing to skirt the rules or, you know, play fast and loose will be moving much faster over the next two or three years. And one of the reason big incumbents struggle is because they actually do have to care about this stuff. They have stuff to protect. They don't want to be sued. They can't handle a major breach. And startups are able to just move faster given that.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“And then it turned out that for a while on Moltbook, which was this social media for all of the APIs were available in a public-facing database that anyone could go read. And so it was like a completely open system that had to get fixed. And so enterprises really do worry about this stuff. And they worry about it for good reason. I'll give you another really interesting example. So there's a bunch of startups that help you record Zoom calls and transcribe them. All of those Zoom calls then become legally discoverable.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a really interesting question. And this is where there's probably the biggest disparity between how enterprise buyers think and how humans think, right? I'm sure you guys have seen Claude Bot and the kind of rise of this open source agents that people are deploying for themselves, giving them access to everything, their whole computer, et cetera. Yeah.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, look, like in any situation, they're going to have to make decisions, right? So in Amazon, you know, built AWS, they had to decide where are we going to press and where are we not? Are we going to sell database software or are we going to let other vendors do that on top of us? And they kind of made those decisions as it went out. What's really interesting is if you look at the foundation model vendors, they have been racing towards the application layer, both cloud code and cowork and OpenAI codecs are applications that people download and use, right? And I think that reflects this understanding that there is value in getting the users used to using your application. Otherwise, you risk being an API that's commoditized. People switch back and forth between you and that kind of application vendor has that control.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“100%. But I think if you think about when we talk about this a little bit earlier, think about where software pricing was already, right? Think about Salesforce, you know, at the elite tier, you know, $80,000, $90,000, $100 per user per month. So for round numbers, say $1,000 per user per year for sales reps who could be making on average $250, $300,000 per year. If you have a technology that can come in and replace a sales rep, you can charge $50,000, still give the customer a 5x ROI, and then you have effectively 50x your take rate on that revenue. And so that's the exciting opportunity that that's what has people excited in startup land for sure. If you talk to folks from Silicon Valley, they are foaming at the mouth about the opportunity to really expand tech spend in this way. And that's also the opportunity for the software companies that get it right.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's result based pricing. There's a lot of questions on how it'll ultimately shake out. Fundamentally, what these companies are doing is they are reselling intelligence, right? The core model vendors, OpenAI, Anthropic, Google, have created a way to get elastic intelligence. And if you have the right data and you can put the right harness around it, you can now sell that to your customers. What's an open question is how do you price that relative to the intelligence? So I was talking to someone this morning who said they think 50% gross margins on intelligence are about right, but we see a lot of variance in how startups are doing it today. Some are getting 80% gross margins on top of the model vendors. Others are getting 20%. But what's absolutely true in any case is if you're able to do that, you get much, much higher pricing in total dollars than you did before. Orders of magnitude in some cases.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, you're really going to them and saying, we are replacing human labor. And there's a different pricing paradigm now. You used to think of us as something you paid 20, 30, 40, $50 per seat per month for as a tool for your employees, almost as if your employees are artisans and they're getting a toolkit to work with. And now we're just selling you an employee or the results of an employee. So, you know, we will sell you customer support tickets getting closed out for 50 cents or a dollar per ticket. And you can do the math of what it would cost you for the human to do that or what it would cost you for AI to do that. And we'll be cheaper, but we're also dramatically increasing what you pay us because, you know, we're cutting into a completely different stream. And so that's what I think it looks like. We see a lot of exciting examples in the startup space of companies that are getting much, much higher pricing than they ever.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“300 million of ARR or something like that. And so they've really re accelerated their business by building an AI native tool that actually solves the work, not just a tool that just kind of exists as a tool that humans use. And so, yeah, I think that's like the mega bullcase, right? I think about it like almost a transition from brick and mortar retail to e-commerce where you have a brand new way of doing business and you have a bunch of legacy companies and some of them will probably just exist as they always have. Others can benefit from the change and add new business lines. You look at Walmart's share price. It's done amazingly well at incorporating e-commerce into its business. And then there's going to be some that are like Sears and go away.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think that's right. I actually kind of think of it as there's three cases there's the software gets wiped out case there's the not much happens to software case and then there's the bull case where the software companies capture a lot of value. I think it's a little different than them adding a lot of features and functionality. Frankly, I think a lot of software products today are pretty mature. There have been a thousand engineers working on them for 10 years and they've built not all, but most of the things that you'd want to build with today's technology. But with agents, there's ways to automate a big chunk of the work. So one software company that's done this very well is Intercom. Intercom sells customer support software. It's those little widgets on the bottom right-hand corner of websites. They were the creators of that. They had a nice business, but then they got very aggressive about building out an AI product called Fin, which answers customer support queries on its own. And they've mentioned that it's almost 100 million of ARR now on a base that was, you know, like...”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Which is a crazy stat and probably reflects that labor is inefficiently allocated across the market. But when you actually double click into what DocuSign does, there are ways in which it's very complicated, right? Understanding the signature regulations in every country around the world, what does it take for a signature to be legally valid? Most of its signatures are done as an API, so folks are integrating it into their own applications. And there's a benefit to using DocuSign, which is the brand. People have been giving away free e-signature software for a very long time, but if you're a company of a certain esteem, you want to make sure your customers trust what they're signing. And if they're getting a contract from you, you'd much rather say DocuSign than XYZ sign that someone vibe coded, right? And so I think it's really important to look company by company. It's definitely a stock picker's market where there's some that are either relatively immune or have a chance to benefit. And there's others that could be in real trouble.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“All about independent grocery. And he's certainly not going to sit down and vibe code himself a point of sale system and put the store on it. I can guarantee you that, nor will any dentist, right? There's a chance that someone comes along with a cheaper version. But, you know, I think that's not something he's going to switch to anytime soon. He doesn't want to go through that pain for another few decades to come, right? And so it really is kind of company by company. Like I'm doing this exercise right now on X where every day I look at a different software company and just”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's a great question. I mean, certainly in the world, it gets really weird scenario. It's not clear there's anywhere immune from threats, but it's important to think through what it looks like. I think what's most at threat is companies that serve enterprises with very customized software already or software that takes a very heavy implementation. And the reason is if anyone's going to take advantage of this wave of technology to really advance and replace a core system of software, it's going to be the enterprises that have the resources and the customization needs. If you think about SMBs, you know, my dad runs our family's grocery store in the family for 100 years, and he just changed his point of sale for the first time in a few decades. And it was a really messy process. Took a long time.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly, but a lot of that context does live in human brains, you know, a sales rep meets a person at dinner, gets to know their kids, figures out what sports team they root for, and they're not automatically pumping all that into the CRM. And so there's this race to collect the information that an AI agent would need in order to actually take proactive action. And the software companies have a position there, but there's also this set of AI native startups that are coming in building actual agents who are doing their own work to collect that context. And that's one of the battles that we saw, you know, that we kind of highlighted in our deck is whoever wins that has a chance to be a really valuable company.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, exactly. People assume that software management teams know exactly what's going on, but they're looking through really messy Salesforce data and doing their very best”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Notes from sales reps on what's going on, the status of their account, their customer support requests. It's an incredibly complex piece of software for a large enterprise. And obviously, if you are an AI agent working within a company, you would need access to that in order to get almost anything done, right? But you need more than is there. You don't know what happened at the sales dinner last night unless the rep took really detailed notes. And I can tell you one comment learning in software is they do not take very detailed notes.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Data is definitely something that gets more valuable in this world. If you think about a stylized AI model, it could have PhD level intelligence in a domain. But if you hired a PhD into your company and sat her down on her first day, she wouldn't be very useful, right? She would have to understand how the organization functions, where do things live. Do I trust this chart or that chart? I need access to the Google Drive. I need access to Slack. I need to spend some time reading up. And so we call this kind of context, right? It's all the extra information that an AI needs to get something done, no matter how intelligent it is. And we wrote about this in the chart in the deck, but there's a real question of who becomes that system of context. And you're right. A lot of the software companies do sit on a pool of very important data. Let's talk about Salesforce, for example, right? CRM is where you track the records of every customer you have, every prospect in your pipeline, all of your historic interactions with them.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“And you have to give the markets credit. Like the second ChatGPT came out, people were like, this company's in big trouble. They didn't wait for it to hit the financial results. And so there is signal in what people think.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, look at Cheg, right? Which went down very quickly in the aftermath of ChatGPT coming out, and that was completely correct, right? Investors were ahead of that. And of course, for the first few quarters, the management team of Chegg had their heads in the sand, but then it became clear that it really was existential to their business.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“So there's a lot going on right now with the terminal value, but it's very hard to argue that this is something that's happening today and showing up in the numbers. The thing is, investors are sharp, right? And they're constantly looking for that.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“And then there was a hangover, and that slowed down. And we wrote 18 months ago that that reflected the sector sort of maturing, the adoption had just slowed down because most folks had adopted the software that they needed under the pressure of the pandemic. And so for the last few years after that, we saw this degradation and growth rates across the sector by the beginning of last year. The median company was growing 18% instead of 40%. So you saw a pretty significant drawdown. What's fascinating is that if you look at the actual financial performance of the companies in the last year, it's been pretty good. That growth rate has held. It was 18% again in Q3. Net retention has also been consistent at about 110%. So that's revenue from existing customers over the same revenue from those customers a prior year. So there's not a churn issue developing or a lack of expansion within the customer base. And a lot of companies are actually accelerating growth or guiding to accelerating growth. We have a chart showing the number of those companies has increased each quarter of the last three successive quarters.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think it's really helpful. This is our second iteration of the deck. And so we kind of force ourselves to recenter on what actually happened since the last deck, right? And there's a very clear pattern in software and what happened over the last five years, which is the pandemic people freaked out at the beginning, but it was rapidly clear that it was an accelerant for SaaS as everyone tried to digitize their companies. And so you had a spike in the growth rate and net retention of the businesses. It peaked at just over 40% in 2021 for the median software company.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, I think, you know, it's a real fear, right? And the way I think about it is there are two arguments against software right now. One is the world is going to stay the same, but software is going to get a lot cheaper over time now that it's cheaper to build. And I think there's no one who would argue that it's not gotten dramatically cheaper to build. For reasons that we laid out in our deck, and we can talk through it more, we don't buy that argument. I don't buy that argument. But the second is the world's about to get really weird. And the way that knowledge work happens is going to change. And if we think out three, four, five years, who knows if there will even be customer support reps or sales reps or software engineers? And I think that's what's causing the kind of hit to the share prices lately is this terminal value concern.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“It's not a good use of time, especially when the software is already so cheap. And so that's another plank in what people are buying when they buy software is the standardization and the knowledge that they'll be able to hire employees who have that. And then there's things like brand, again, the kind of ecosystem that comes around it. And so it really is more than just the raw code.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“A big part of the story historically is that need to have support. Another thing that you sell when you sell as a software vendor is what I call herd familiarity, which means everyone on earth knows how to use your software, which just simplifies the training and onboarding workflow. I'll give a few examples because I'm sure it's a new term for listeners since I made it up. Zoom is a great business. Microsoft has been giving away a free version of the product forever in Teams. Why do people use Zoom? Because In certain industries, almost everyone knows how to use Zoom. They have their Zoom setup. They have their virtual background chosen. They're not going to fumble around for the first minute or two on the call. And that's well worth the $20 a month to have a Zoom plan. But that applies to lots of other areas as well. So think about Microsoft Excel, for example. You might be able to use Google Sheets to do the same thing, but do you really want to retrain every person who comes in on the Google Sheets shortcuts versus the Excel shortcuts?”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's a great question. And you're 100% right. It's producing working code. And frankly, it has been for the last year or so. I built my first lovable app that was working in production about a year ago. And it's even intensified in the last three months, right? I think when people buy software, there's a set of things that they're buying. One thing that I think is important for everyone to understand is that open source software has been a thing. And there have been free open source versions of almost any software you could buy for all of recorded history. There's actually some companies that are public that built their businesses, packaging that open source software and adding a few custom features and then support on top of it. Because when a company is reliant on an open source database or a company like Elastic with its elastic search product, which is an infrastructure tool, and it breaks, they need someone to call, both for CIA reasons and because it can be very complex and technical and they need to quickly understand it. And so that has been”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, 100%. I think the challenge of writing the code for the integrations is going away. That's not the bulk of the challenge for majority of integrations. It's about really deeply understanding the prior system and how it maps to the new system. And the reality is within most organizations, that's a human problem. It's, hey, this column says status 2004. What does that mean? Like how does that map to the new system that we're building? So you have to go talk to someone and understand it. And so there's certain types of integrations where I think they're effectively solved problems now because you can write into chat into cloud code and get a perfectly written piece of software to make it happen. And then there's others that are just fundamentally human problems because the data doesn't exist in digital space.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Et cetera, that company's probably going to miss its earnings over the next one or two quarters because those transitions are so painful. And so yes, there's a big consulting complex around it that does its best to come in and parachute in the talent that's required to make those transitions smooth. And that tells you something about what makes software so sticky or at least has historically.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“100%, and there's two parts to that, which I think are important. One is the integrations into your existing systems, right? A lot of big old companies have old databases, old applications, and it's important for everything to be stitched together. So you need software engineers and consultants to go in and understand those existing systems and kind of get them linked up to the new systems. But the other one, which is probably bigger, is just people management and change management. Any software system is a combination of the code and all of the individual users who have learned how to use it. If you're trying to change out your CRM at a company, that means training every single sales rep on how to use the new CRM and getting it right. And if they get it wrong, then you lose deals that quarter. And so, you know, one of the kind of tropes in investing is if you see a company that's doing an ERP transition, ERP stands for enterprise resource planning. It's the kind of core software accounting, supply chain.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“And it's the same product for every customer. And then sell it to them for way cheaper than they could ever hope to build it themselves, even less than the cost of one employee.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's a great question. You know, back in the very early days of software, like back in the 70s or 80s, there was a lot done in-house. And we've seen a very clear mixture over time towards using third-party software. And what it comes down to is the software was expensive to build and maintain. And there's this need for an ecosystem of integrations around it, which are also expensive to build and maintain. And so if you look at a software company, it can afford to have one, two, three thousand engineers plus partnership teams, et cetera, all working to build the perfect piece of software for a given application. And then what's striking, and this will come up a lot more in this conversation, is not selling it for that much money, right? A lot of software companies report a stat, which is the share of our customers that pay us more than $100,000 a year. And $100,000 a year is less than half of a fully loaded cost of a software engineer, right? And so the software model was build a product that can be applied to thousands of customers.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. You can buy the product, ship it to yourself. If you're an investor in Viva, which makes CRM software for pharmaceutical reps, I bet you there's almost no investors in Viva who have ever been inside the product even once, much less used it on a day-to-day basis and understood how it works. Got it.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, if you're an investor in Lululemon, you have a pretty solid conception of what that business is. You can go into a store.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I get texted constantly from folks on the buy side just, you know, retrenching. I can't believe this is happening. Can it go lower? I keep saying that. It's the hundredth time I bought the dip. You use the SAS apocalypse like catastrophe is mine. It's definitely one of those moments. And we were talking about this a little bit earlier before starting. But one of the things about software that's really fascinating is there's very few folks even on the buy side who really understand how software works. It's one of those Rorschach tests kind of sectors where almost no one's logged into Salesforce and clicked around, much less been a Salesforce admin and understood the full complexity. And so when there's panic, there's not a lot of support for the stocks and people get scared very easily.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, my pleasure. So I think one thing that makes me a little bit different in the investor world is that I've spent time investing in early stage startups, public companies, and everything in between. So I spent a chunk of my career at an early stage venture fund in Boston called Matrix Partners working with an OG SaaS investor named David Scott. And then was also at Kotu where I ran public software. And so I've kind of have this like experience across the spectrum from ground floor startups to looking at the big public companies, which I've done for the last 10 years.”
2026-02-19 · Odd Lots · Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse" · IDENTIFIED FROM THE TRANSCRIPT · source