Transcript
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The speaker opens by arguing that AI is a serious threat to SaaS businesses and outlines the talk’s structure. He introduces the idea that AI can attack SaaS from both the supply side and the demand side.
Speaker A
How the do you survive if you're a SaaS company, how do you survive in this age of AI?AI is more of a problem probably for every SaaS founder in this room than you think.You know, I could start one today and probably have pretty close feature parity in a few months.They don't need your 50 features, they only need the three that they use.If you don't agentify your software, build some type of agent on top of it, I think you're going to zero in the next couple years because someone's going to come along and they're going to.QuickBooks is terrible software.I hate using it, but I don't care because my accountant uses it and he likes it.You're probably lucky, probably doing pretty, pretty well.If you have one or two of these.I am going to try to scare you a little bit with this talk.
This is the.I think I have 91 slides, 92 slides.It is by far the densest talk I've ever given.This one has a lot of gravity to it, you'll notice.It's also the, I think the only talk I've ever written, co written with someone, so it says by Rob Walling and Anna Voset.Because Annar Voset spent about a month wrestling with 89 different papers written by think tanks, private equity groups, Gartner mashing them with Claude chatgpt going back and forth trying to figure out how the do you survive if you're a SaaS company, how do you survive in this age of AI?Because what Saaspocalypse tells us, tells us on social media is all SaaS is going to zero.Okay?So we can say, well that's not true, it's just not true.It's objectively not true.
But is it going to go back to normal?Are we okay, should we ignore it?That's not true either, right?So there's something in the middle and that's what we're trying to find with this.So where we're going today, normally I have three acts, but today I have four.
I want to try to get you a little scared.AI is more of a problem probably for every SaaS founder in this room than you think.I don't want to scare you too much, but just enough to pay attention.I'm going to talk about classic SaaS motes, what I mentioned in SAS playbook.If you've read that I have a few motes and how some of those are dying or have died, then talk about what we think are the motes that still work.
And then I have like three or four slides that is really could be a whole four hour workshop on how do you evaluate your SaaS company?What questions do you ask?I tack it on at the end because it's important, but can't possibly cover that in a 45 minute talk.So this is a sentiment that we're hearing on the Internet.Microcontinent.I'm a founder.SaaS founder, AI is amazing.I'm shipping so much faster.And obviously my customers are hairstylists or lawn care specialists.They're never going to vibe code my product.
Okay, so that is an attack.That's one attack that AI can make against you is someone, your customer, specifically Vibe codes your product.So I'm going to now show you 10 attacks, nine additional ones, several of which you probably haven't thought of.They're grouped into two buckets, the supply side and the demand side.Okay, so basic economics.
If we have a widget and suddenly the supply of widgets goes way up, the price of widgets go down.Commodity, they get commoditized.You lose as a company, you lose as a founder, right?Well, SaaS can be the same thing.Imagine you have a single SaaS application that does scheduling links and suddenly there are 99 others.There's a huge supply becomes very messy.So when the supply gets shocked, that's a problem.On the other side, demand is, well, these are my customers, right?People buying, well, what if I have a million potential customers in the US and their businesses and let's say 90% of them go out of business tomorrow, Suddenly my demand plummets.This is bad.
Both of these are bad.So I'm going to cover 10 across supply and demand.I'm going to break them into those buckets.
This section walks through the ten ways AI can disrupt SaaS, including customer-built replacements, rapid competitor parity, open source acceleration, platform bundling, custom software, and model absorption. It also covers demand-side shocks like customer business failures, seat reduction, category collapse, and agent-driven replacement.
Speaker A
The supply shock has six different vectors that AI can come after you with.The thing to remember is everyone gets AI, not just you and not just your customers.
Everyone gets AI.So the first attack is the one we all think about.Your customer builds it, right?Some people say my app's pretty complicated.It has 50 different features.
You're going to get the slides at the end, by the way, but 50 different features.They're never going to vibe code it.One thing to think about is they don't need your 50 features, they only need the three that they use.All right?
Second attack is competitors reaching parity very quickly.
This slide shows eight of the 46 different AI notetakers that I could find on the Internet.And it's.What is it?Otter, Fireflies, Crisp Fathom tldv read AI Circleback granola and I wanted to show them in this order because, you know, you think about your otter in 2016 and you're like, oh, I got this all to myself.This is amazing.
And now we have granola and everyone in between who almost.They almost all have feature parity.They're kind of the same product and I know that would piss off the founders if they were here, but you know, I could start one today and probably have pretty close feature parity in a few months.That's great for an upstart and it's really bad for, for your supply.It's a supply shock that everyone can get to feature parity with most apps these days.
It buys you.Features used to buy you a lot of time.They buy you a lot less time.So tack number one was customers, tack number two competitors.Tack number three is open source.
I have already seen this.There are more open source projects.There are more open source projects working, moving faster than they used to.Because I'm coding, everybody gets AI, they're moving faster.And non technical buyers who used to stay away from open source, they can deploy it because they talk to Claude or Claude code and they can run open source.
None of these causes saaspocalypse.10 of them together makes a difference.Okay, my estimate, and this is just me doing this for 20 years and taking a guess, said this multiple times.I think somewhere saaspocalypse says everything's going to zero and everyone's plateauing.That's not happening.That's not true.I think somewhere between 10 and 20% of all SaaS companies in the world are either going to decline or go to zero.That's a lot.It's a lot and it's not.I mean, does that include like little indie hacker projects?Probably.That's still a lot, right?10%, 20%.That gives you an idea.Attack number four is a platform like a system of record that you're tied into ships your feature for free because they can build it in a week, a month.They can build it a lot faster.They already have the customers.You've basically given them a spec through your ui.
They could feasibly, if you're an add on to something, they could go out.I'm imagining if you're.
Well, anything that ties into a CRM isn't Salesforce and HubSpot and Close and any other CRM is just going to start building all the ancillary things because they're just easier to build now.So Your platform.This is like an integration partner that's going to come for you.I think tack number five, we're seeing this custom software at SaaS prices, approximately.If you're an agency, you used to charge 30 grand, 50 grand for a build because it took three months.
Now you can vibe, code it, you can code it with AI assistance in a third, fourth, fifth of the time.And you always want.Agencies want recurring revenue.So If I'm charging 99 bucks a month for mine, my one size fits all agency charges, whether it's 299, 499, 999, whatever it is completely custom made for you, supported for you.This model is becoming a thing.In fact, if I were like in my early 20s, I would think about something like this.This is really interesting business model is still an attack on SaaS.And the sixth supply side is if the model absorbs your product.This may or may not happen.But you remember when we used to pay apps to generate like ad copy and headlines and images and all that stuff?
Those apps went away.And there's a bunch of examples of others that have as well.All right, so that's the supply demand shock.There are four of these.
This the demand shock, I find.And when Anders started bringing these to me, I was like, oh, I hadn't thought of, I hadn't thought of that.I hadn't thought of that.And most SaaS founders, the founders that I've talked to as I've been writing this talk are like, I didn't even think about that.
What if your customers just go out of business?50%, 90%, whatever the number is, huge swaths that AI wipes them out.So imagine that your SaaS serves translation agencies or transcription agencies that used to have a human sitting there listening to something.The number of words translated and transcribed since AI have gone through the roof.Right.There's a lot more volume of this happening.The revenue of these agencies is effectively going to zero because we are basically using AI.Now, one can argue there's going to stay some boutique agencies.If you're doing medical transcription, I'm sure if you're.Or translation, you know, there's certain areas where this is critical, but this ecosystem is going to take a big hit.I mean, I say 10 to 20% of SaaS is going to experience a problem.80%, 90% of these agencies are, are going to zero.There's big disruptions in copywriting as well.
There's a lot of things.So while the activity grows, your customer's ability to pay you plummets.If your customers start going out of business, there's no recovery from that.Right.In terms of.That's just involuntary churn tact.Number eight, are your seats going away?This one we've heard, remember when Sasspocalypse came up and they're like seats are going away because agents are going to do everything.Yes and no.In some businesses seats are going to have a problem because if you are Zendesk and you are customer service or customer support software, I think when Derek and I left drip we had six or eight customer support and we had six customer success now.So that was about 12 people.Customer success these days still can't.
Is not agentic yet.Customer support is 80, 90% automated in a lot of things.So suddenly you have go from eight agents to maybe one or two that is supervising a bunch of.Yes, eight human agents down to one or two AI agents and they're just supervising them.Right.
So you have massive contraction of seats and you'll see, you see Zendesk and help scout and these folks moving towards outcome based.There's a bunch of things they're doing with pricing to try to get around this.It's still a big shock attack.Number nine of ten, does the thing you manage still matter?Are people using it at all or does it just go away because of AI?
Whether it's agents.Imagine that you were software to manage take home coding tests.We don't do those anymore.Right.The whole category of software, managing take home code.Because if you give someone a take home code exist, what do they do?Well, they're going to use AI for it, but you want them to use AI, but how much did they do versus how much did the AI do?So Derek and I were just talking.You mentioned like six times in my talk.I guess you and I were just talking on the podcast a couple weeks ago talking about hiring and it's like, well, we do pair programming now.
That's what I would do.Right.You're not going to.I'm not going to do a take home coding.Take home coding test.
So some people in this room impacted by it, others not still an attack.The 10th and final one is it's related to seats, but it's different.Imagine if you were software for receptionists.Okay.Or like almost like call centers where they are going to be replaced by AI agents.
So you have a bunch of seats, there's a bunch of humans.And now if.And you have software you're selling for $50 a month.If you don't agentify your software, build some type of agent on top of it, I think you're going to zero in the next couple of years because someone's going to come along and they're going to say, yeah, you want that software plus like a fully Autonomous, let's say 90% accurate agent for 300, $500 a month.When you're paying 50 bucks a month, but you can let the receptionist go or the call center people, they're gonna pay the 300 to 500 bucks or whatever that is.
So is the human even using your software anymore related to seats?But it's different.So that's the part that gets you scared to make you think, you know, I need to pay attention.Cause even if your business is doing okay today and you're bootstrapping and you just wanna run it forever, some of this stuff's coming for you now and some of it's coming for us over the next few years.
The speaker shifts to classic SaaS moats and explains why they still matter in an AI world. He connects these defenses to investor confidence, acquisition multiples, and real market examples like HubSpot and Atlassian.
Speaker A
All right, so we're gonna talk about some.
I'm gonna zip through this part.This is like classic moats that I've thought about, that we've Talked about in SaaS Traditionally, why customers used to stick around.I came up with nine reasons.I saw this slide this morning and I realized there's probably eight.But whatever, it doesn't really matter.So used to be, I have unique features.They're not gonna leave because they need these features.I have a real strong brand.They're gonna stick with me for or continue to buy from me for.I have these owned traffic channels.I have SEO that I've been doing for years.Clever code, complex algorithms.Five years of honing, refining, working around buggy APIs, whatever else.The team is familiar with my UX.They don't want to retrain people.So there's no.Not going to switch.I have 30 integrations.Man, those are complex to build, aren't they?
High switching costs of just.It's hard to get my data out.I don't, you know, it can't really export.And then configuring in the new workflow thing on the other places.And pain in the butt if multiple people are in my app coordinating.Similar to retraining.It's like everyone has to move at once.And we cut over on this day and then I'm a system of record where all this data comes in and it's complicated to move.Right.These are nine reasons I came up with there probably more.And we're just going to check a few of these off, shall we?
So what does AI do.AI makes building features doesn't bring it to zero.I don't want to act through this talk like suddenly I can build a year's worth of software in a week.That's not true.But it dramatically reduces the moat or the barrier to just rolling out new features that competitors have.Feature parity.I think products are going to all kind of converge because whoever's really good at product and UX people are just going to wind up copying them with AI own traffic channels.This one I'm 5050 on.Yeah, if you have really good SEO, it's fine.Is is AI making marketing and just like it's making kind of starting to trivialize code.Is it starting to make really muddy.It is clever code.I think we can just admit that someone can probably now that AI is solving 100 math proofs.Anyone hear about this?
There's like a hundred math proofs that haven't been solved ever in human history.
And they're saying inside it was anthropic or Gemini or somebody.They just solved 100 of them.And Anar and I were talking, I was like, well, glad I'm not getting my PhD in math.It's like, what do you do anymore?Right.AI's doing it.UX familiarity.Yes.If it's still humans, if things go agentic, your UX doesn't matter at all.Integrations.
Isn't the API really just the spec to hand to my bot now to fucking code the thing?No, I'm getting depressed, all right?And high switching costs used to be a thing.They still are a little bit, but, man, have you seen someone point an AI at an app and say, pull out all my data even when there's no export.Yeah, it really can and does happen.
So of these nine, I think three are still like, system of record is a real thing.You're going to see it in this list here.Coordination between people is a thing and a brand.Plus some stuff is the thing.So we have these three.
I'm going to add five more and we're going to dig into those.Now, this is the meaty, meaty part of the talk.So for each of these.Hey, real quick, if you're getting value out of this talk, you should subscribe to the Microconf YouTube channel.We're posting all the talks from Microconf Europe.
So even if you couldn't make it to Iceland, you can still get a lot of the learnings from the event.We also have a back catalog of some amazing talks from our previous events.All right.Let's dive back in.I'm going to talk about them, I'm going to say what the mode is, I'm going to give at least two examples for each one.
And that's the real, that's probably the important part of the talk.I tried to give a big name example we all know and tried to do a smaller like microcont, tiny seed company just because I don't want to just give, hey, you should be slack Facebook and Google, like this is not helpful, right?So I tried to do a big one, a small one.And then there's a question at the end to help you almost evaluate your own product in the context of this, something I didn't say at the beginning is that the M and A market, one of the reasons so ANAR came at this problem from private equity and the M and A market because a big part of what makes the whole SaaS ecosystem work and so valuable is that private Equity, which does 70% of the acquisitions of our types of SaaS companies, they have been paying incredible multiples for the past six, eight years, maybe a little longer and they follow public markets.
So as HubSpot or Atlassian move, so does private equity and these multiples change.Even if you never plan to sell, this ecosystem works because a lot of money has been flowing into it.If you don't have any of these moats, what an R has been seeing at discretion capital, right, he runs a sell side M and a advisory for two to $20 million SaaS companies.What they've seen is that private equity and strategic buyers as well are really scared.Not about the present, but they don't know if you're going to be around in a year, three, five years.So he came at it as what can you have in your business that gives them confidence that you're going to be around in three to five years such that they will pay our old multiples that we've talked about all this time.
I come at it from more the founder side.He comes at it from kind of the finance, private equity side.And that's why these moats are important.Even if you never plan to sell, even if you're bootstrapped, these are defensive defenses against AI.And the other interesting thing, I had a couple slides I pulled out and it's about Atlassian and HubSpot within a day of each other in August, it's about five weeks ago, they reported their earnings and HubSpot beat earnings, beat almost every expectation, did a billion dollar stock buyback and their stock dropped 21%.
And Atlassian had similar results.But their MCP server had, like, doubled in use.It had a bunch of.AI was making it better.They went up 35%.
It was a huge swing.Like, imagine, you know, tens of billions of dollars moving around.And when we look at it, it's like, well, Atlassian and Jira specifically has several of these moats.And HubSpot's inbound marketing engine is probably going to, I wouldn't say wiped out, is massively negative, negatively impacted by AI.So we're already seeing it in public markets, we're seeing it in private equity and acquisition markets.
And obviously we are seeing or going to see it in the bootstrapper markets as well.So let's dive into the moats.
This chapter covers the first four moats: being trusted by buyers, becoming a system of record, being able to act rather than just advise, and being so reliable that customers never check your work. Examples include QuickBooks, Shopify, JIRA, Stripe Connect, Gusto, and Avalara.
Speaker A
The first one is that buyers know and trust you.I've tried to summarize each of these with this phrasing, but then there's bullets.It's like, well, what does that mean?Right?It's a strong brand.And also, you know how your buyers, you know your buyers and you know how they buy.You have partners potentially that have built their businesses around recommending you, and you have a champion inside a company that will fight for you.So the true, like, strongest form of this moat is when a competitor who came in with better software, who can vibe code, it still has to build all of this.
All right, A lot of these moats, actually, all of them, they're not on or off.It's not a bit.Maybe it's a 0 to 10, right?A 0 to 100.And you could say, well, Salesforce or Shopify are at 90 out of this.
And you can say, well, maybe I'm at 10 now.How do I get to 20 or 30 examples of this strong brand?Buyers, you know, the buyers, partners recommend you.QuickBooks is a perfect example of this huge ecosystem.We could replicate QuickBooks tomorrow and we would be fighting against the accountants.
Like every accountant I've ever.QuickBooks is terrible software.I hate using it, but I don't care because my accountant uses it and he likes it.And a better product doesn't get you in this conversation.I mean, zero is doing okay, but what is zero 10, 12 years into this?
Shopify is another example.Their partner network is extensive.There's a bajillion agency, I think literally thousands of agencies that implement Shopify stores.So, yeah, hey, there it is on the slide.It must be true.
So when a merchant, if you go to a merchant, goes to hire an agency and says, what cart should I use?Well, they're like well obviously we're going to do Shopify, right?Platform's already decided the moat.Two questions.I'm sorry, the moat.Two examples.And now we have the question which is who's built their business or their career around recommending or defending you.That's one way to evaluate this.Moat number two.You are a system of record.
What does that mean?It's a source of truth within a business for data.
This is where daily operations are built around you.It means people are logging in every day to do stuff.You might be the operating system of that business that if you go down the business is like shit out of luck, they can barely do stuff.There are systems of record that aren't just the operating system if they have a source of data that can't be easily exported and that everyone's working in all the time.But I think the biggest moat here is daily operations are built around you.You have balances, you have approvals, you have statuses, you have all types of stuff.Workflows, living roles and rules are configured and a lot of other systems are wired in either reading from it to act or pumping data in to you and that data doesn't come out.JIRA is a good example of this, right?We think of it as just an issue tracker but there is so much, I mean devs and managers and product people.
You have multiple teams in JIRA and you could export your tickets in an afternoon but migrating all the history, the audit trail, the integrations and getting all those teams to move to a different system would be very, very painful.
So there is the fact that it is a system of record, just has gravity, it has weight and it pulls, keeps you there.GymDesk is a tiny seed company.He had an amazing, amazing life changing exit.And it's basically imagine your gym, martial arts store, dojo, yoga studio, your entire business runs on him.And it started as, I don't remember, it was like a part of the gym and then suddenly he's like integrating with hardware so people can use like a fob to get in the door and every aspect of the gym it just boom, boom, boom, invoicing and billing and just kept spreading.And so now if you're a gym, you get gym desk done.No one, very few are going to switch off this for any type of AI.So the question is if your customer wants to leave, what can't they export?
What breaks downstream and what would, what would they have to rebuild moat number three?This is where it starts to get esoteric.Where Anar showed me These.And I was like, what do these mean?And I had to spend hours, like thinking through.You're allowed to act.What does that mean?
So if you're a tool that recommends that a clerk makes a payment, your one type of tool versus a tool that can make the payment, that can actually move money.So do you give them a spreadsheet with a list of PayPal emails and dollars?Okay, so you're like a report, you're an analysis, you're a reporting tool, or do you actually move the money?If you can move the money, then you act.Examples of this.Stripe Connect doesn't.No one's switching off.Stripe Connect doesn't just recommend a payment.It actually moves money.
Tiny C company, Reimbi.It reimburses.If I wanted to pull a job candidate in, fly them out, and they have expenses, meals, hotel, other stuff.I don't want to set them up as a vendor in my system.I want to pay them via Venmo PayPal Cash app.
Reambi does the whole thing.Soup to nuts.The fact that Reambi can act means that it has a pretty nice moat here.You don't have to be Stripe to have the authority to pay.
And I threw a third one in here, ChurnKey, which is if you're a SaaS company, you can put Churnkey in.And they have offers.When people go to Churn and they help, they offer discounts and they offer all kinds of different variations to try to reduce your churn.And there's a lot of tools that will tell you who's about to Churn.But churnkey is literally allowed to get in the cancellation flow and make an offer.They're allowed to act.They're allowed to step in front of your customers.And you don't.You don't even check on them.So question here is, can you act?Can your software act, or can it only advise?Are you a reporting tool or something that actually does something?
Moat number four is that.This is another one.When he said it, I was like, what are you talking about?They don't check your work.
This the best example of this is Gusto.I've used gusto for 10 years at least.No, no.Since 2013, probably 13 years.And I've never once checked their work.
I could go to jail for IRS something or other if Gusto decided to me.Cause I have never once looked at anything but the W2 they issued to me.You just don't.And we can say, well, it's complicated.Like, why don't I.Well, I don't know.I don't understand it.Great.So am I going to switch when someone AI Vibe codes Augusto competitor.I'm not, because these guys got it dialed.
Another example, this is Avalara, also a tax.This is sales tax, though once again, we don't check the number.This was when I had.I struggled to find like a small, like a tiny seed microconf example of this.So I had two big ones.
And it's not just, hey, we're trustworthy.They've earned this permission.Right.They've been right for years and years and years.So if you were to, like I said, vibe code Gusto or Avalara, switching is not likely.
The speaker explains the remaining moats: regulatory approval, network effects, learning loops, and the burden of hard-to-run infrastructure. He uses examples like Vanta, Slack, Stripe Radar, Mailchimp, Cloudflare, and Drip to show how these defenses can still hold up.
Speaker A
All right, we're in the home stretch here.The fifth one.Oh, yeah, this was the one we added the other day because it had gotten lumped in.Man, you do this long enough and they start lumping in.At one point we had 10 and then realized, yeah, you can imagine this, how this goes, trying to build something like this from nothing.
So this one is that someone official already said yes.And what I mean by that is this is where their regulations, licenses, accreditations, certifications.Right.Anything where there's a third party board or body that is monitoring these things and that you as the vendor have to qualify, get certified, et cetera, et cetera.Just because your customer.I guess I have a bullet here.But just because your customers do it.Yeah, yeah.Serving regulated customers isn't the same as holding an approval yourself.And because the competitor can clone your code again, every one of these is like, all right, if cloning the code, let's just assume it gets faster and faster, easier and easier, and it goes to zero.Much like hard drive space did, Internet speeds, bandwidth, all that.Right.It just approached zero.Didn't get to zero, but it approached zero.Let's assume for the sake of argument, code approaches zero.
What else are these motes doing for us?And this is where you have to get.This can be the ISO 27001.It can be, I want to say GDPR.That's not what I mean.
What is a SoC2 is what I'm thinking of.But it can all.And these are just little speed bumps in the road.But it can also be things like, well, I'll get to it in a second.I guess HIPAA is another one.
So compliance is so brutal that Vanta is literally a billion dollar company and they just spring up over the past.I mean, they haven't been around for more than five or six years because These things are tough and they are.They take a while.They're expensive.An example of a tiny seed company that works with this.And if you were to try to vibe code this exact same thing, it would be very hard because no one in here knows what ABA is except for the founder.I forget what it is, but it's like an element of psychology and it's related to that.But they have courses that count towards credentials and if you try to vibe code this, you have to get board approval.And are any of us going to go through that?No.So she has a moat around her business.Another example of this is one that I just thought of in the last couple days.
Sending texts in the US is shockingly difficult and the laws are way worse than email.We thought we had it bad with Drip.When I deal with the text, the SMS companies and tiny seed, I'm like, good Lord, I would never start a business in that.Well, that's a moat right there, right?So you have to.There's carrier registration, there's consent laws, there's all types of ways.It is very cumbersome.The software for this is not that hard to code, but dealing with texting is not fun.
So that is a bit, you know, is it 100%?No one's ever going to do it.No.But it is going to be a barrier.So question here is what approval complexity?What legal stuff do you know, have you navigated that a competitor would have to earn number six is that everyone's already in the software.This is the idea of network effect.Who has to move if they leave your software?Is it one person?Well, they can switch in an afternoon, right?You have a whole team.All right, Everyone agrees we move next week.It's a whole community or a whole company all at once.It's painful.So the more folks that are in there coordinating, the bigger the moat.
Obviously prototypical example of this is Slack.Some of us love it, some of us hate it.We all try to move off of it.No one does.There's competitors to Slack.We can't name them because Slack is the king.But you don't have to be Slack.Commit Swimming is a tiny seed company and swim team management built for coaches.But what they do is.And a lot of the swim, there's adult swim teams, but imagine there's a bunch of kids swim teams and they get all the parents in signed up for it and it's notifications, right?
Here's the meet, here's the location.We're all doing this pizza party, blah Blah, blah, every family's all signed up.These are all non technical folks generally.So switching doesn't just mean, oh, move the software.It's like everybody has to move all at once and the whole league has to agree like it's a pain in the ass.
Right?So the question here, this is a pretty, this one's very interesting and obviously hard to achieve.Would a competitor have to move everyone at once?Is the question number seven of eight, every customer that you have makes your software smarter.You're going to hear me talk and use the phrase learning loop.
ANAR is going to be talking about learning loops in a couple hours.Example of this is Stripe Radar, which identifies fraud.And every merchant that stripe has sees fraud patterns and that feeds up into a Borg like mind that protects all the other merchants.So if you were to try to go start your own Stripe radar with just your data, it's worth way, way, way, way, way less than Stripe radar.And their system gets smarter.
No single merchant could ever build it.Right.And if you leave that, you lose it.The diagram here is a situation comes up, human or software takes an action, you see what the result is and, and then you correct and make it better.If you have a lot of data, doesn't matter.
You have to be able to use that data to predict across all your customers because that then becomes the moat because switching means you lose it.Another example of this is ramp, which is bookkeeping.And every correction that one of their customers makes to a Verizon line item, oh, I'm going to do that as a cell phone, whatever.Well, everybody else gets that too, right?That's a trivial example, but you get the idea.
And then churn key again.Every cancellation in theory should make their engine better.I don't actually, I didn't have a chance to contact the turnkey guys.I don't know if they're actually doing that, if they're doing a feedback loop, but you can bet that I'll be contacting me after this talk and say, build that in because you should have this moat.So this one only counts if you have clear three gates.Number one, every customer makes it better for every other.Can't just be siloed that this customer makes it better for themselves because then they can go build it or a competitor can build it.Number two, customers can take their data, but not what you learn from it.Yeah, they can export it, but they don't know what you learn.And the last one is you have to keep learning.Right?Because if it's stagnant and you don't get better over time, then it doesn't matter.
They can just leave.Another example I thought about, this is a mailchimp.Mailchimp's the only ESP that ever made freemium work because the biggest thing in email is spam.
And they built an engine called Omnivore that figured out how to detect spam at a level, at a machine learning level.This is in 09, like way before any of this AI came out.They're another good example.So your question is, does what happens to one customer make your product smarter for the rest of the.And the last one that I added just a couple days ago based on this Peter Lovells tweet.It's hard to keep running.So Peter levels tweets.I've tried for weeks now he's Peter Levels indie hacker.Half a million followers on Twitter.He's just vibe coding everything.I mean even like 20, $30 stuff.He wants to like vibe code and host it himself because that's what Peter does.So he's at the extreme end of that.He's trying to vibe code everything.So he tried to do scraping beef, which is a.
It's a proxy.It's a tiny C company proxy service that helps you not get blocked as you try to scrape things, right?Cause Everybody blocks your IPs.Tried to code it, tried to code it.Finally he's like it, I'm just gonna pay him 99 bucks a month.
So if you look at his list of he said these are the only things I'm paying for.Now it's Cloudflare, like raw server, bare metal server boxes and VPs and blah blah blah and scraping me.And it's like, what a trip.These massive companies are scraping B.Why is that?
Well, it's because web scraping isn't that hard to build.But to keep it working and not get blocked is a pain in the ass.It's a bunch of DevOps, it's servers, it's cycling IPs.It's a huge headache to run.It's a burden.Scraping big guys sold.They had a great exit, 8 figure cache exit they've been public about, but they didn't want to run it anymore.It was such a pain in the ass.But that was their moat.Cloudflare.Same exact thing, right?Are you going to vibe code Cloudflare if someone else vibe codes Cloudflare?Am I going to switch?No, it's a crazy moat.It's just hard to run.
Drip.God rest our souls.Derek Reimer.That we survived this drip was anyone can send an email.And this is why when I see people, I've seen someone like vibe code kind of an esp, right?And say, just plug in your Amazon SES and you can send your own email.And yep, Benedict you as well.We just kind of chortle because it's like, no, no, no, you don't understand.We had multiple full time people.All they did was try to fight spam.
You hook it into your SAS account, like it's a problem, right?So these are moats.Question here is, is it hard to build or is it hard to keep running?Because that thing that you hate and resent can actually be a moat.
The talk closes with a scorecard-style set of questions for evaluating which moats a company has or can build. He ends by encouraging founders to strengthen defensibility and then transitions into Q&A and event promotion.
Speaker A
These are the eight.
And now I'm going to wrap up with just a couple slides.These are more of a thought experiment that we, I mean we're going to be fleshing this next part out into hours and hours of stuff.So it's, it's going to be quick.But I want to answer the question quickly, like which of these are possible for you?And there's eight questions.
Each one corresponds to a moat.There's probably two, three, four questions we could ask for each of these, right?So it's like who has built, you heard some of these.Who's built their career or business around recommending you?Do you hold the definitive view of the work, right?
Are you a record of the work?Are you a system of record?Are you just a view of it?Do you take action or do you just recommend it?Do customers trust your output enough that they don't check you?
What approval?This is the regulation one, right?What approvals, regulations do you hold that a newcomer has to wait for?Who has to agree to replace you?Does one customer's experience make it better for everyone?
And what do you maintain that you resent maintaining?That's my favorite.And I think this is the last slide.It is.These are just examples that I was like for each of the moats, how would I go from where I am today to try to have that moat?
So if I was.And these are in the same order as well.So it's like if I had a vertical tool, I want to build an ecosystem, I want the vendor, I want to become the one that the industry recommends, right?If I'm a point solution, can I become a system of record?If I'm a reporting tool that gives reports, can I figure out how to act and actually move the money or actually, you know, put the churn thing, not just recommend it?
If I have something that calculates something, how do I get to be the output that nobody double checks?If I'm in a regulated industry, how do I become an approved or the approved provider?We see, don't we see anthropic and all the AI providers trying to basically regulate their industry so that they pull the ladder up behind them.If I'm a single seat tool, can I build that network effect?That's what everyone's coordinating.
If I collect data, can I build a learning loop?And if I have infrastructure that I babysit and I despise and hate, will that be a burden that no one else will carry?So in conclusion, try to figure out which ones are yours or which ones you can move into.Maybe you have one of these today.You're probably lucky, probably doing pretty well if you have one or two of these, I think.
So if you figure out which ones are yours or you move towards them, you're worth more.Business is more defensible.And as I said, this talk was about moats, about defense.And we're gonna hear from ANAR in a couple hours about how to go on offense.So that's it for me for today.We have time for questions.
Thanks for watching.There was a lot in that talk, so we turned it into a free field guide.The 10 attacks, the eight motes, and a scorecard you can fill out for your own business.Head to microconf.commotes and we'll send you the guide.You'll also get the recording of the Q and A from after the talk.
We're not posting that one on YouTube, so this is the only place to get it.And if you want to be in the room next time.In 2027, Microconf is headed to Austin, Texas in April and Dubrovnik, Croatia in October.Watching these talks on YouTube is great, but the real magic happens in person.You're in a room with about 250 founders who get exactly what you're building.
And some of the best conversations happen in the hallway between the talks.The last seven, maybe eight microconfs have sold out, so grab your Tickets [email protected] Events if you want to go.These events will sell out and I hope to see you there.And if you already have your ticket or you're just ready for another great talk, check out this one right here.I'll see you over there.