North Korea’s Secret US Workforce, Canceling the SaaSpocalypse, MSL’s Latest Exits | Diet TBPN

**John Coogan** (0:01)
We got to take a victory lap. You want to start taking a lap, Jordi? You want to take a lap while I tell everyone about our SaaSpocalypse victory lap?

**Jordi Hays** (0:07)
I was just appreciating some various software as a service companies charts yesterday. Bunch of companies up like crazy. And I was thinking, I texted John, I was like, when did we cancel the SaaSpocalypse? You pulled up our original sub stack that we sent back in February.
We just decided at that time, it's not happening. We canceled it and there was maybe too early to take a victory lap.

**John Coogan** (0:38)
But in hindsight, but there were some good arguments. There were some interesting arguments and there was a lot of fear. But there were a lot of companies that were getting thrown in the SaaS bucket as just like a pure pile of code. You could vibe code it.
And while that thesis might play out over a few years, it was a little bit too soon. It seemed a little bit too aggressive. And so we wanted to revisit the SaaS Apocalypse and the cancellation of the SaaS Apocalypse, see where things are now. So just to set the stage, the SaaS Apocalypse was a rough, rough go. $2 trillion of market cap lost across the SaaS Apocalypse, the major sell off of technology software companies broadly.
$2 trillion wiped out, gone. Moment of silence. Moment of silence. But a lot of it's come back. It appeared only logical at the time that every company would be vibe coding their own CRM, and this would happen imminently, and that any company built on a big pile of code would go to zero. Of course, the core thesis still holds over the long term, but it's a lot messier in reality. So yes, having a huge monolithic piece of software is less of a moat today than it was a decade ago. That's for sure. Competition is increasing, especially for point solutions. But many of those SaaS companies that were so beaten up in the SaaS apocalypse were revealed to have sources of strength that didn't fit neatly into the lots of lines of code written bucket. So babies were thrown out.

**Jordi Hays** (2:10)
1,000 business development representatives.

**John Coogan** (2:14)
Yeah.

**Jordi Hays** (2:15)
Source of strength.

**John Coogan** (2:16)
That's big. Also just another thing that's very valuable is what percent of revenue are you claiming from your customers? So if you are going to a customer and you're saying, I'm taking 30 percent cut, you're probably at more risk than someone who's saying, I'm an IT solution and you're going to spend one-tenth of one percent of revenue.

**Jordi Hays** (2:39)
Yeah, Shopify is the best example.
A lot of e-commerce entrepreneurs ask them, what's your biggest expense? None of them will say Shopify, even a brand that is like a Dale.

**John Coogan** (2:54)
Shopify Plus for a business that I know very intimately, I think is around $1,000 a month in cost, and the business is doing almost 100 million a year.

**Jordi Hays** (3:08)
Even with how good the models are today, you would need multiple people basically vibe-coding around the clock to have a product that was comparable.

**John Coogan** (3:17)
Yeah, a lot of babies were thrown out with the bath water.
The most ridiculous one was, I think, DoorDash, but there were lots of people coming for Spotify and a whole bunch of different platforms that should be very enduring because their source of strength is a network effect or something like that. So six months ago, we identified six companies that we wanted to use as case studies for the SaaS apocalypse. It was Google, Meta, your favorite company, Spotify, Shopify, Roblox and Salesforce as evidence that large-scaled software companies-

**Jordi Hays** (3:48)
We have a minute to talk about Meta.

**SPEAKER_3** (3:51)
I'm kidding. Business is doing great.

**John Coogan** (3:54)
I'm kidding. It always should have been-

**Jordi Hays** (3:55)
Don't get me started.

**John Coogan** (3:56)
Never should have been beat up. Don't get me started. It never should have been beat up.
Same with Google.
Then Spotify and Shopify were the interesting ones. Spotify, of course, there is a world where you're listening to AI music, but there's also a world where you're listening to AI music on Spotify. Same thing for Roblox. Yes, you'll be able to vibe code a game, but having all the Roblox network infrastructure distribution, that should be valuable in the future. Now, you have a long list of unsloppable SaaS companies, companies that can't just be immediately spun up and replaced by an AI app. There are AI winners now and it's a lot of who you'd expect. Cybersecurity is more important than ever. You mentioned CrowdStrike, but Palo Alto Networks is also on a tear. Palo Alto Networks over the past year is up 121%.