software companies

“With my kind of product background, I'm able to look at companies with that lens, and I think that, that's useful, right? That, that's a useful lens to look at, because these are all software companies, and the products are huge parts of their businesses.”

“What I don't think you'll see is the ten billion dollar exits that typically you see in true software, both enterprise and consumer software businesses, and like we look for out of our real estate technology fund,”

“Having that light and that spotlight on your company just makes the execution orientation of everybody go to another level, and I think it's just a really, really positive force in In the growth of a company, especially in software, and so I think it's just an…”

“To our earlier conversation, it's about eight percent of all payment spend goes through software companies. But our view is that that eight is going to 80.”

“And as we get better at this, and as consumers start to trust new software companies more, I think our financial lives will become more and more automated and just optimize in a much better way.”

“But interestingly enough, in the seven quarters after the IPO, the average company grew 18%. And that was considered fantastic. You couldn't get funded today if all you were doing was growing 18%. In the decade that followed, they grew 28%, and the decade just…”

“Give us enough inefficiency so we can earn a differentiated return. If you have a perfectly run business, then it's going to sell for a retail value on that cash flow, and we may not have enough delta to create an additional return from our efforts and from ou…”

“The more we studied these companies, the more we realized the recurring revenues are really strong, but none of them were making money. So we developed an approach that said, no, with 90, 80% gross margins, like today, these companies can be buyout candidates …”

“I would say maybe AI is eating the world and eating software, and companies that will not join the party will not be around.”

“So, you know, in the public markets, software companies, multiples there have corrected to what we saw in 2016, 1718 to normal multiples.”

“I think there's a challenge from software companies and sales leaders thinking too small inside of a box in terms of the profile of who they're looking for.”

“Historical forward multiple is about five X, let's just say, right? It's a little higher than that's about 5.5. And in the heyday of quantitative easing, the top quartile companies are trading at 40 times. And so you can't go, and today it's about maybe six.”

“Very few software companies have successfully gone from down market to up market. And very few have gone from up market down market. So it is just very hard to do.”

“Now you're investing at a hundred to 200 times revenue when public names are trading at the best public names are trading at 15 to 20 times. That dislocation does not make sense to me unless you believe that these companies fundamentally have much more persist…”

“Most, like, most software companies grow up in a very zero-sum world. Like, they are incredibly jealous of their adjacencies. Like, every software, that's not going to be more fair. Most software executives will spend their time thinking, which adjacencies can…”

“I think one thing that software companies have always been bad at for good reason. I don't think it's necessarily what we do is actually helping companies manage the adoption of this technology.”

“That I hear now that software companies are going away, right? AI is going to write all, all software. And I just think that's a naive view.”

“But in the future, we are more or less selling an employee. And like, you know, here's a very highly competent employee that is, that has specific skills, sorry, to perform in your company.”

“Are all of our software companies going to be completely disrupted and all of them go away? And like, I don't know, like I'm taking a stand that it's they're not. But like, I guess I could be totally wrong.”

“And now it's not a hundred percent, but 50, 60% of these bid market private equity firms also buy software companies. Like they have a sleeve to do software.”

“These software companies that are not just augmenting, but in some cases replacing the work that humans do and the budget allocated towards paying them for that work, these companies are going to get bigger, right?”

“If you cut R and D in the downturn, you're probably screwed. If you don't have that compelling second product that you built in 22, 23, 24, you know, you're just in a tough place.”

“Because if you're growing 15% or so, or in the teens, probably the majority is from price increases in today. That's, you know, it's fake growth. It is price increases or stuff jammed down the channel, and maybe it's a couple percent from new logos, but if you…”

“Maybe one in three companies does it for a single year. Only one in 10 does it for two years. Very rarely seen re-acceleration when you're already at 50%, for God's sake.”

“And folks want the smartest folks in AI, in, in applied math and others, they only want to work on the intellectual challenges they want to work on. And if you can't deliver that, And the right boss. There's so much portability that they will just leave. And t…”

“But if you're not making your software for autonomous agents today, you're going to be challenged in the future. Maybe it's six months, maybe a year, maybe 18 months, but you're going to be severely challenged if you still think human beings are going to buy y…”

“So I think at the end of the day, vibe coding is amazing technology, but I don't think it's going to disrupt software companies.”

“If you look at the earning calls and how business operate, everything is, is kind of normal. Some companies are even exceeded expectations and businesses are working great, but at the same time, The sentiment has shifted drastically, like I've never seen befor…”

“I feel this is like the lowest sentiment that software companies ever had.”

“I think vibe coding is one of those minor threats to software companies in our lifetimes, and I vibe code constantly. It's a minor threat.”

“Software earlier was a scale game where because you had produced a lot of software, it was cheaper for you to produce a lot of the guess what? Now everybody can produce software as cheaply as anybody else.”

“I think this is 100% overreaction because not all software companies are created equal, and we can talk about what the differences are.”

“If you're not making progress on that metric, as a software company, you are not with the program.”

“Give me 30% growth, give me profits, give me a story that's got some future in it, and I'll get you back to five times. I'll never give you 20 times again. I won't fall for that one this time.”

“The companies that don't have network effects are going to struggle very significantly because then there's not really a defensible moat in the pure software associated with the products that they build.”

“Probably some companies will skip the design phase. I think we can skip the design phase on functionality.”

“Software companies in the age of AI are either accelerating or irrelevant.”