Jared Sleeper on Which Software Companies Will Survive the "SaaSpocalypse"
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What is the current “SaaSpocalypse” and why are software stocks crashing?
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Hello and welcome to another episode of the Oddlots podcast. I'm Joe Weissenthal.
And I'm Tracy Alloway.
Tracy, we're recording this February 11th in uh IGV, the software ETF, down another three percent today.
It has been ugly in software. Everyone's throwing around the term SAS Pocalypse. I mean the great thing about SaaS is there are a lot of things that like rhyme with it and a lot of homonyms. So you can you can make all those puns. Yeah, exactly. SAS is trash, whatever. But I'm looking at the share price of Salesforce in particular, because I always think of Salesforce as sort of like emblematic
the poster child.
Yeah. Poster child of like a software company that I'm not really sure what they do. But yeah, it's it's just ugly.
It's basically been cut in half, hasn't it? Since its peak, like in early twenty twenty five. Right now it's one eighty four, eighty four. And it's
all your fault, Joe.
It's all my fault. That's right. Because earlier in the year, after we got back from Christmas vacation or Christmas break, you know, around that I'd sa seen everyone playing around with Claude Code, and then I had to do it. We did an episode. And so people are like, Oh, if Joe Wisenthal can like figure out Claude Code, then there must not be any value to any of these companies at all. There, you know, you mentioned Salesforce. That's har far from the ugliest one I'm looking at. at Atlassian, which makes a lot of like workforce productivity companies, like some slack competitors and stuff. Yeah. That was a four hundred and fifty dollar stock back in twenty twenty one. That's an eighty six dollar stock.
So like it's ugly. She's And yeah, as you said, everyone is realizing that if any old fool can write software, maybe these companies
Yeah. I mean, I will just say it's not just software right now. So we're seeing this sort of rolling series of concerns where like every time AI does something or creates some new product, it hits a particular industry. So on Monday it was the insurance industry, insurance brokers and you know, today, Wednesday, February eleventh, I think it's some of the like stock broker firms.
Yeah, all you have to do is just say AI industry and there's a s you know, it's really there's a lot of anxiety. But there's something that like doesn't make any sense to me about this or the thing that I'm wrapping my head around. It's like, sure any of us could easily like write some software, but like writing software is a cost center for these companies, right? If your sales force And you can trivially reduce the cost of building software. That should that's also a benefit for you. And there's a lot more to a software company than just code generation because there's all kinds of, you know, network effects and links into this. It's like a software company is clearly more than just code. And so the fact that maybe code can be generated a lot cheaper does not scream to me like, oh, these companies are worth less.
Sure. But at the same time, they've been pricing their pricing is based on that assumption, right? Like that there is no competitor for what they're doing and suddenly you might have an in-house competitor.
Absolutely. But you know, it's like network effects and do companies want to start like building their own like payroll software? Anyway, I have a lot of questions about this sell-off.
No, no, no. This is you uh doing like penance for st for causing causing the sell-off.
All right, let's talk to someone who actually might be able to sort of answer some of these uh questions for us.
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Chapters
8 chapters
1
What is the current “SaaSpocalypse” and why are software stocks crashing?
0:00–6:05
2
How did the software business model evolve from in‑house builds to third‑party SaaS platforms?
6:05–13:28
3
Why does cheaper AI‑generated code not automatically devalue SaaS companies?
13:28–19:44
4
How are integration and human‑knowledge challenges reshaping software value?
19:44–26:18
5
What new pricing models (e.g., results‑based, intelligence‑resale) are emerging for SaaS?
26:18–32:53
6
Which types of software companies are most vulnerable to AI disruption?
32:53–39:24
7
Will we see large‑scale layoffs in the SaaS sector and what’s the timeline?
39:24–45:18
8
What is the long‑term outlook for software companies in a world of cheap AI code?
45:18–51:37
Speakers
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