Agencies are wildly underrated

“In the case of Cursor, the AI IDE, it just raised a three hundred million dollar round at a nine billion dollar valuation, which was 45 times revenue.”

“And also, why do I think that software and agency multiples will converge? Short answer is I believe the business is The agency business will look a lot better in the age of AI.”

“AI is going to have a massive impact on the margins of agency businesses long term. As this technology, being AI, lowers the cost of intelligence, agentic workflows that support smaller agency teams will start giving these businesses the type of leverage that …”

“Like the oversupply of content on the internet, you will have an oversupply of software that is, one, more specific and niche than it's ever been, So there's going to be this whole long tail of software products that are created for the first time ever. Some, …”

“This acceleration of competition is going to hurt software margins in two ways, I think. Retention and marketing. Acquiring users will be more difficult than ever before, which means that spending on paid marketing or employees to do organic marketing will bec…”

“And so I think what was typically considered to be a more quality recurring revenue stream in software products is going to be less true than it's ever been.”

“I believe agencies are going to be ground zero for new AI tools and workflows to be built, and if agency owners are ambitious, long-term minded, and commercial enough, they can use the cash flows of their businesses to incubate non-agency products.”

“I think Tenex just as a, an agency business can be a hundred million dollar a year business because I view the opportunity for AI transformation to basically be the GDP of the United States.”