The Only SaaS Moats Left in 2026

How the hell are SaaS companies going to survive in this age of in this age of in this age of artificial intelligence? artificial intelligence? artificial intelligence? AI is probably a AI is probably a AI is probably a bigger problem for bigger problem for bigger problem for every every every SaaS founder in this room than you SaaS founder in this room than you SaaS founder in this room than you think. think. think. You don't, I can You don't, I can You don't, I can launch one launch one launch one today and probably today and probably today and probably achieve closeness achieve closeness achieve closeness in features in a in features in a in features in a few months. few months. few months. They don't need your 50 They don't need your 50 They don't need your 50 features, they features, they features, they only need the three they only need the three they only need the three they use. If use. If use. If you don't make your software you don't make your software you don't make your software agent-based, if you don't create agent-based, if you don't create some kind of agent based on it, I think you'll be reduced to zero you'll be reduced to zero you'll be reduced to zero in a couple of years. Because in a couple of years. Because in a couple of years. Because someone will come along and say: someone will come along and say: someone will come along and say: ClickFunnels is terrible software, I ClickFunnels is terrible software, I ClickFunnels is terrible software, I hate hate hate using it, but using it, but using it, but I don't care because my I don't care because my I don't care because my accountant accountant accountant uses it and uses it and uses it and loves it. You loves it. You loves it. You probably got lucky. probably got lucky. probably got lucky. You're probably You're probably You're probably doing pretty well if doing pretty well if doing pretty well if you have one or two of you have one or two of you have one or two of these. I'm going to try to these. I'm going to try to these. I'm going to try to scare you a little with this scare you a little with this scare you a little with this conversation. Um, there conversation. Um, there conversation. Um, there seems to be 91 slides, 92 seems to be 91 slides, 92 seems to be 91 slides, 92 slides. This is by far the slides. This is by far the slides. This is by far the most concise most concise most concise presentation I have presentation I have presentation I have ever given. ever given. ever given. She has a lot of weight. You'll She has a lot of weight. You'll She has a lot of weight. You'll notice that this also notice that this also notice that this also seems to be the only seems to be the only seems to be the only speech I've speech I've co-written with co-written with anyone. So it anyone. So it anyone. So it says "authors: Rob says "authors: Rob says "authors: Rob Walling and Interval Set," Walling and Interval Set," Walling and Interval Set," because Interval Set because Interval Set because Interval Set spent about spent about spent about a month going a month going a month going through 89 different through 89 different through 89 different papers papers papers written by written by written by think think think tanks, tanks, tanks, private equity groups, private equity groups, private equity groups, Gartner, combining them with Gartner, combining them with Gartner, combining them with Claude and ChatGPT, Claude and ChatGPT, Claude and ChatGPT, debating, debating, debating, trying trying trying to figure out: how do to figure out: how do to figure out: how do SaaS companies survive in this SaaS companies survive in this SaaS companies survive in this age of AI? Because what the age of AI? Because what the age of AI? Because what the SaaS apocalypse SaaS apocalypse SaaS apocalypse is telling us on social is telling us on social is telling us on social media is that all media is that all media is that all SaaS will be reduced to zero, SaaS will be reduced to zero, SaaS will be reduced to zero, okay? So we okay? So we okay? So we can say, "Well, can say, "Well, can say, "Well, that's not true. That's that's not true. That's that's not true. That's just not true. That's just not true. That's just not true. That's objectively not true."

objectively not true." objectively not true." But will But will But will everything return to normal? Are we everything return to normal? Are we everything return to normal? Are we safe? Should we safe? Should we safe? Should we ignore this? That's ignore this? That's ignore this? That's not true either, right? not true either, right? not true either, right? So there's something in between So there's something in between , and that's what we're , and that's what we're , and that's what we're trying to find trying to find trying to find with this. with this. with this. So where we're So where we're So where we're headed today, headed today, headed today, usually I have three usually I have three usually I have three acts, but today I have acts, but today I have acts, but today I have four. I want four. I want four. I want to try to scare you a little to try to scare you a little to try to scare you a little . AI is . AI is . AI is probably a bigger probably a bigger probably a bigger problem for every problem for every problem for every SaaS founder in this SaaS founder in this SaaS founder in this room than you think. room than you think. room than you think. I don't want to scare you I don't want to scare you I don't want to scare you too much, too much, too much, just enough to make just enough to make just enough to make you pay attention. I'm you pay attention. I'm you pay attention. I'm going to talk going to talk going to talk about the classic SaaS about the classic SaaS models that I models that I models that I mentioned in the "SaaS Playbook" mentioned in the "SaaS Playbook" mentioned in the "SaaS Playbook" if you've read it. if you've read it. if you've read it. I have several models I have several models , and I will tell you how some , and I will tell you how some , and I will tell you how some of them are dying or have of them are dying or have of them are dying or have already died. Next, already died. Next, already died. Next, let's talk about let's talk about let's talk about which approaches we which approaches we which approaches we think still work. think still work. I have a few I have a few slides that could slides that could slides that could be a whole 4- be a whole 4- hour seminar hour seminar hour seminar on how to value on how to value on how to value your SaaS company. What your SaaS company. What your SaaS company. What questions should you questions should you questions should you ask? I'm leaving this ask? I'm leaving this ask? I'm leaving this for last because it's for last because it's for last because it's important, but important, but important, but impossible to cover in a impossible to cover in a impossible to cover in a 45-minute talk. 45-minute talk. So, these are the sentiments So, these are the sentiments we hear on the internet. we hear on the internet. MicroConf, TinySeed, I am the MicroConf, TinySeed, I am the founder, SaaS founder, SaaS founder. AI is founder. AI is founder. AI is amazing. I produce amazing. I produce amazing. I produce products faster, and products faster, and products faster, and of course my clients are of course my clients are hairdressers or hairdressers or hairdressers or lawn care professionals.

lawn care professionals. lawn care professionals. They will never They will never They will never "vibe-code" my "vibe-code" my "vibe-code" my product. Of course? product. Of course? product. Of course? This is an attack. This is one of the This is an attack. This is one of the This is an attack. This is one of the attacks that AI can attacks that AI can attacks that AI can direct against you. direct against you. direct against you. When someone, your When someone, your When someone, your client, specifically client, specifically client, specifically creates your product creates your product creates your product through "vibe coding." through "vibe coding." through "vibe coding." So now I'm going to show So now I'm going to show So now I'm going to show you 10 attacks, nine you 10 attacks, nine you 10 attacks, nine extra ones, extra ones, extra ones, many of which you many of which you many of which you probably haven't thought of. probably haven't thought of. They are grouped into two They are grouped into two baskets. baskets. baskets. Supply side and Supply side and Supply side and demand side. demand side. demand side. Of course? Fundamentals of Of course? Fundamentals of Of course? Fundamentals of economics. If we economics. If we economics. If we have a product, and suddenly have a product, and suddenly have a product, and suddenly the supply of this the supply of this the supply of this product increases dramatically, product increases dramatically, product increases dramatically, the price drops, it becomes a the price drops, it becomes a the price drops, it becomes a mass product. You mass product. You mass product. You lose as a lose as a lose as a company. You company. You company. You lose as a lose as a lose as a founder, right? Well, the same thing founder, right? Well, the same thing founder, right? Well, the same thing can happen with SaaS can happen with SaaS can happen with SaaS . Imagine you . Imagine you . Imagine you have a SaaS have a SaaS have a SaaS meeting scheduling application meeting scheduling application , and suddenly , and suddenly , and suddenly 99 more of the same ones appear 99 more of the same ones appear 99 more of the same ones appear . . . The offer is becoming The offer is becoming The offer is becoming huge. The situation is huge. The situation is huge. The situation is becoming very confusing. becoming very confusing. becoming very confusing. So when supply So when supply So when supply is shocked, that's a is shocked, that's a is shocked, that's a problem. On the other problem. On the other problem. On the other hand, demand is my hand, demand is my hand, demand is my customers, right? People customers, right? People customers, right? People who buy. What if who buy. What if who buy. What if I have a million I have a million I have a million potential customers potential customers potential customers in the US, and, let's say, 90% of in the US, and, let's say, 90% of in the US, and, let's say, 90% of them them them go bankrupt tomorrow? Suddenly go bankrupt tomorrow? Suddenly go bankrupt tomorrow? Suddenly my demand is my demand is my demand is dropping precipitously. This is bad.

dropping precipitously. This is bad. dropping precipitously. This is bad. Both options are Both options are Both options are bad. So I will bad. So I will bad. So I will go over 10 points go over 10 points go over 10 points related to related to related to supply and demand. supply and demand. supply and demand. I will divide them into these I will divide them into these I will divide them into these categories. categories. categories. Supply shock has six Supply shock has six Supply shock has six different vectors different vectors different vectors through which AI can through which AI can through which AI can attack you. It's important attack you. It's important attack you. It's important to remember: AI to remember: AI to remember: AI benefits everyone, not benefits everyone, not benefits everyone, not just you and not just your just you and not just your just you and not just your customers. Everyone gets AI customers. Everyone gets AI customers. Everyone gets AI . The first attack is what . The first attack is what . The first attack is what we all we all we all think about. Your customer think about. Your customer think about. Your customer creates your product creates your product creates your product themselves, right? Some people say, " themselves, right? Some people say, " My app is quite My app is quite My app is quite complex. It has 50 complex. It has 50 complex. It has 50 different features." By different features." By different features." By the way, at the end you the way, at the end you the way, at the end you will get slides, but will get slides, but will get slides, but 50 functions—they will 50 functions—they will 50 functions—they will never be able to never be able to never be able to reproduce them because of " reproduce them because of " vibe coding." vibe coding." vibe coding." Think about the fact that Think about the fact that Think about the fact that they don't need all 50 they don't need all 50 they don't need all 50 features, they features, they features, they only need the three they only need the three they only need the three they use. use. use. Agreed? The second Agreed? The second Agreed? The second attack is when attack is when attack is when competitors competitors competitors reach reach reach parity very quickly. This parity very quickly. This parity very quickly. This slide shows slide shows slide shows eight of the 46 different AI eight of the 46 different AI notebooks I notebooks I notebooks I found online. found online. And what is this? Otter, Fireflies , Krisp, Fathom, TLDR, Read AI, , Krisp, Fathom, TLDR, Read AI, , Krisp, Fathom, TLDR, Read AI, Circleback, Granola. I wanted to Circleback, Granola. I wanted to Circleback, Granola. I wanted to show them in show them in show them in that order because you that order because you that order because you look back at your Otter in 2016 look back at your Otter in 2016 and think, "Oh, that's and think, "Oh, that's and think, "Oh, that's all mine." "It's just all mine." "It's just all mine." "It's just amazing." And now amazing." And now amazing." And now we have Granola and all the others we have Granola and all the others we have Granola and all the others in between, which have in between, which have in between, which have almost all the almost all the almost all the same features. This is essentially the same same features. This is essentially the same product. I know this would product. I know this would piss off piss off piss off the founders if the founders if the founders if they were here, but...I they were here, but...I they were here, but...I could launch one like this could launch one like this could launch one like this today today today and probably reach and probably reach and probably reach parity in a few parity in a few parity in a few months. This is great months. This is great months. This is great for a startup, but

for a startup, but for a startup, but very bad for your very bad for your very bad for your offering. It's offering. It's offering. It's supply shock—now supply shock—now supply shock—now almost anyone can almost anyone can almost anyone can achieve achieve achieve feature parity in most feature parity in most feature parity in most applications. applications. applications. Functions used to give you Functions used to give you Functions used to give you a lot of time, now a lot of time, now a lot of time, now they give you much they give you much they give you much less. So, the first less. So, the first less. So, the first attack is on customers, attack is on customers, attack is on customers, the second is on competitors. the second is on competitors. the second is on competitors. Attack number three is Attack number three is Attack number three is open source. I've open source. I've open source. I've seen it before. There are seen it before. There are seen it before. There are more more more open source projects emerging, they open source projects emerging, they open source projects emerging, they are developing faster are developing faster are developing faster than before, because I write the than before, because I write the than before, because I write the code, and everyone gets code, and everyone gets code, and everyone gets AI. They move AI. They move AI. They move faster, and non-technical faster, and non-technical faster, and non-technical buyers who previously buyers who previously buyers who previously avoided open avoided open avoided open source can now source can now source can now deploy it because they deploy it because they deploy it because they communicate with Claude or communicate with Claude or communicate with Claude or Claude code and can Claude code and can Claude code and can run open source. run open source. run open source. None of these reasons are None of these reasons are None of these reasons are causing a SaaS causing a SaaS apocalypse. But all apocalypse. But all apocalypse. But all ten together—that's ten together—that's ten together—that's important. Of course? important. Of course? important. Of course? My assessment—and this is just My assessment—and this is just My assessment—and this is just a guess after 20 a guess after 20 a guess after 20 years in this field. I have years in this field. I have said this many times. Some say said this many times. Some say that the SaaS apocalypse that the SaaS apocalypse that the SaaS apocalypse means that everything means that everything means that everything is heading towards zero and everyone is heading towards zero and everyone is heading towards zero and everyone has reached a plateau. has reached a plateau. has reached a plateau. This is not This is not This is not happening. This is happening. This is happening. This is not true. I think that not true. I think that not true. I think that somewhere between 10 and 20% of all somewhere between 10 and 20% of all somewhere between 10 and 20% of all SaaS companies in the world SaaS companies in the world SaaS companies in the world will either decline or will either decline or will either decline or disappear altogether. That's a disappear altogether. That's a disappear altogether. That's a lot. That's a lot, and lot. That's a lot, and lot. That's a lot, and at the same time, not much. Does at the same time, not much. Does at the same time, not much. Does this include this include this include small indie small indie projects? Probably so.

projects? Probably so. projects? Probably so. That's still a lot, That's still a lot, That's still a lot, right? 10%? 20%? This gives right? 10%? 20%? This gives right? 10%? 20%? This gives you an idea of ​​the you an idea of ​​the you an idea of ​​the situation. Attack number situation. Attack number situation. Attack number four is a platform, four is a platform, four is a platform, like an accounting system that like an accounting system that like an accounting system that you're tied to, you're tied to, you're tied to, that releases your that releases your that releases your feature for free feature for free feature for free because it can build it because it can build it because it can build it in a week or a month. in a week or a month. in a week or a month. They can do it They can do it They can do it much faster. much faster. much faster. They already have customers. You have They already have customers. You have They already have customers. You have effectively given them a effectively given them a effectively given them a technical brief with technical brief with technical brief with your interface. your interface. your interface. They could, if you They could, if you They could, if you were an add-on to were an add-on to were an add-on to something, just something, just something, just push you out. I push you out. I push you out. I mean, imagine if mean, imagine if mean, imagine if you, well, say, you, well, say, anything CRM-related, would anything CRM-related, would anything CRM-related, would n't Salesforce, n't Salesforce, n't Salesforce, HubSpot, Close, and other CRMs HubSpot, Close, and other CRMs HubSpot, Close, and other CRMs just start building just start building just start building all these ancillary all these ancillary all these ancillary features because now they're features because now they're features because now they're just easier just easier just easier to develop. So your to develop. So your to develop. So your platform, it's like an platform, it's like an platform, it's like an integration partner integration partner integration partner that I think will that I think will that I think will come after you. Attack come after you. Attack come after you. Attack number five, we see number five, we see number five, we see this: custom this: custom software at software at SaaS prices, roughly. SaaS prices, roughly. If you're an agency, If you're an agency, you used to charge 30-50 you used to charge 30-50 you used to charge 30-50 thousand for development because thousand for development because thousand for development because it took 3 months, and it took 3 months, and it took 3 months, and now you can now you can now you can code it with code it with code it with artificial intelligence artificial intelligence artificial intelligence in a third, a quarter, in a third, a quarter, in a third, a quarter, or a fifth of the or a fifth of the or a fifth of the time. And you always time. And you always time. And you always want, agencies want, agencies want, agencies want, to have a want, to have a want, to have a regular income. So regular income. So , if I charge , if I charge , if I charge $99 a month for $99 a month for $99 a month for my all-in-one my all-in-one my all-in-one solution, agencies solution, agencies solution, agencies charge $299, $499, $999, charge $299, $499, $999, charge $299, $499, $999, whatever it is, whatever it is, whatever it is, for a completely for a completely for a completely customized, customized, customized, built and built and built and supported solution for you supported solution for you supported solution for you . This model is . This model is . This model is becoming popular.

becoming popular. becoming popular. In fact, if I In fact, if I In fact, if I were in my early 20s, I would have were in my early 20s, I would have were in my early 20s, I would have thought about something thought about something thought about something similar. This is a very similar. This is a very similar. This is a very interesting business model. interesting business model. interesting business model. This is still an attack on SaaS. This is still an attack on SaaS. This is still an attack on SaaS. And the sixth And the sixth And the sixth supply factor is when supply factor is when supply factor is when the model absorbs your the model absorbs your the model absorbs your product. This may or may product. This may or may product. This may or may not happen, not happen, not happen, but remember how but remember how but remember how we used to pay apps we used to pay apps we used to pay apps to create to create to create ad copy, ad copy, ad copy, headlines, headlines, headlines, images, and all images, and all images, and all that? Um, those apps are that? Um, those apps are that? Um, those apps are gone. And there are a bunch of other gone. And there are a bunch of other gone. And there are a bunch of other examples of the same thing examples of the same thing examples of the same thing happening. happening. happening. Okay, that's about Okay, that's about Okay, that's about the proposal. the proposal. the proposal. Demand shock, there are four of them. Demand shock, there are four of them. This demand shock, I This demand shock, I think, and when Anna think, and when Anna think, and when Anna started telling me about it started telling me about it started telling me about it , I , I , I thought, "Oh, I had thought, "Oh, I had thought, "Oh, I had n't thought about that." I didn't n't thought about that." I didn't n't thought about that." I didn't think about that. And most of the think about that. And most of the think about that. And most of the SaaS founders SaaS founders SaaS founders I spoke to while I spoke to while I spoke to while writing this talk writing this talk writing this talk say, "Holy [ __ ], I say, "Holy [ __ ], I say, "Holy [ __ ], I never even thought about never even thought about never even thought about that." What if your that." What if your that." What if your clients just clients just clients just go bankrupt? 50%, 90%, go bankrupt? 50%, 90%, go bankrupt? 50%, 90%, whatever the number is, whatever the number is, whatever the number is, huge masses that huge masses that huge masses that artificial intelligence will artificial intelligence will artificial intelligence will simply sweep away. So, simply sweep away. So, simply sweep away. So, imagine your SaaS imagine your SaaS imagine your SaaS serving serving serving translation or translation or translation or transcription transcription transcription agencies, where previously a agencies, where previously a agencies, where previously a person would sit and person would sit and person would sit and listen to something.

listen to something. The number of words translated and transcribed has words translated and transcribed has skyrocketed with the advent of AI skyrocketed with the advent of AI skyrocketed with the advent of AI . Isn't that right? . Isn't that right? . Isn't that right? The scope of this work has The scope of this work has The scope of this work has increased significantly. The revenue of increased significantly. The revenue of increased significantly. The revenue of these agencies is these agencies is these agencies is actually heading towards actually heading towards actually heading towards zero because we are zero because we are zero because we are essentially using essentially using essentially using AI. Of course, you can AI. Of course, you can AI. Of course, you can argue that argue that argue that some some some niche agencies will remain. niche agencies will remain. niche agencies will remain. If you are involved in If you are involved in If you are involved in medical medical medical transcription or transcription or transcription or translation, you know translation, you know there are certain areas where this is there are certain areas where this is there are certain areas where this is critically important. But critically important. But critically important. But this ecosystem will this ecosystem will this ecosystem will suffer greatly. I suffer greatly. I suffer greatly. I mean, 10-20% of SaaS mean, 10-20% of SaaS companies will face companies will face companies will face problems, and 80-90% of problems, and 80-90% of such agencies will such agencies will such agencies will go bankrupt. There go bankrupt. There go bankrupt. There are also significant are also significant are also significant shifts in shifts in shifts in copywriting. A lot is copywriting. A lot is copywriting. A lot is happening. happening. happening. So, while activity So, while activity So, while activity is increasing, is increasing, your customers' solvency is your customers' solvency is rapidly declining. If rapidly declining. If rapidly declining. If your customers your customers your customers start going out of start going out of start going out of business, there's no way business, there's no way business, there's no way to fix it, right? From a to fix it, right? From a to fix it, right? From a business perspective, this is business perspective, this is business perspective, this is simply a forced simply a forced simply a forced outflow of customers. outflow of customers. Attack number eight. Are Attack number eight. Are your jobs disappearing your jobs disappearing your jobs disappearing ? We've heard about it before ? We've heard about it before ? We've heard about it before . Remember . Remember . Remember when the topic of the " when the topic of the " SaaS apocalypse" came up, everyone SaaS apocalypse" came up, everyone SaaS apocalypse" came up, everyone said: "Jobs said: "Jobs said: "Jobs will disappear because will disappear because will disappear because agents will do everything." Both agents will do everything." Both agents will do everything." Both yes and no. Some yes and no. Some yes and no. Some businesses businesses businesses will have will have will have problems with jobs. Because if you're problems with jobs. Because if you're problems with jobs. Because if you're Zendesk, the Zendesk, the customer service software, it customer service software, it seems like when seems like when seems like when Derek and I left Drip, Derek and I left Drip, Derek and I left Drip, we had six or eight we had six or eight support people and six— customer success. It customer success. It customer success. It was about 12 people.

was about 12 people. Customer success work is still not fully automated. But fully automated. But customer support is 80-90% automated in customer support is 80-90% automated in customer support is 80-90% automated in many aspects many aspects . So suddenly . So suddenly the number of agents the number of agents the number of agents goes from goes from goes from eight to one or eight to one or eight to one or two who just two who just two who just oversee a bunch of... oversee a bunch of... yeah, eight human yeah, eight human yeah, eight human agents are replaced by agents are replaced by agents are replaced by one or two who one or two who one or two who just manage AI just manage AI agents, right? agents, right? agents, right? So you have a massive So you have a massive So you have a massive reduction in the number of reduction in the number of reduction in the number of jobs. And you jobs. And you jobs. And you see Zendesk, Help Scout, see Zendesk, Help Scout, see Zendesk, Help Scout, and others moving to a and others moving to a and others moving to a pay-for- pay-for- pay-for- performance model. They performance model. They performance model. They do a lot with do a lot with do a lot with pricing to pricing to pricing to somehow get around this somehow get around this somehow get around this problem. It's still a problem. It's still a problem. It's still a big blow. Attack big blow. Attack big blow. Attack number nine out of number nine out of number nine out of ten. Does it ten. Does it ten. Does it matter what you matter what you matter what you manage? Do people even manage? Do people even use this? Or does it use this? Or does it just disappear because of just disappear because of just disappear because of AI? Whether they are AI? Whether they are AI? Whether they are agents or not, agents or not, agents or not, imagine that you are imagine that you are imagine that you are developing software to developing software to developing software to manage programming test manage programming test manage programming test tasks tasks tasks at home. at home. at home. We no longer We no longer We no longer conduct such tests. conduct such tests. conduct such tests. Truth? This category of Truth? This category of Truth? This category of software for managing software for managing software for managing homework tests homework tests homework tests has disappeared, because if you give has disappeared, because if you give has disappeared, because if you give someone such a task, someone such a task, someone such a task, what will they do? what will they do? what will they do? They will use They will use They will use AI for this, even though you AI for this, even though you AI for this, even though you want them to want them to want them to use it use it . But how much did . But how much did . But how much did they do, and how much did AI do?

they do, and how much did AI do? they do, and how much did AI do? Derek and I were just Derek and I were just Derek and I were just talking...you were talking...you were talking...you were probably probably probably mentioned about six times in my mentioned about six times in my mentioned about six times in my speech. You and I speech. You and I were discussing were discussing hiring on the podcast a few weeks ago, and you're hiring on the podcast a few weeks ago, and you're hiring on the podcast a few weeks ago, and you're like, "Well, we're like, "Well, we're like, "Well, we're doing pair doing pair doing pair programming right now." That's what programming right now." That's what programming right now." That's what I would do, right I would do, right ? I'm not going to give a ? I'm not going to give a programming homework test. So programming homework test. So some people in this room some people in this room some people in this room were touched by it, others weren't. were touched by it, others weren't. were touched by it, others weren't. But it's still an attack. But it's still an attack. But it's still an attack. The tenth and final The tenth and final The tenth and final point is this. It's point is this. It's point is this. It's related to related to related to jobs, but a little jobs, but a little jobs, but a little differently. Imagine you're differently. Imagine you're differently. Imagine you're building building building software for software for software for administrators, administrators, administrators, okay? Or, say, okay? Or, say, okay? Or, say, for call centers, which for call centers, which for call centers, which will soon be will soon be will soon be replaced by AI agents. replaced by AI agents. So, you have a lot of So, you have a lot of jobs, a lot of jobs, a lot of jobs, a lot of people, and if you people, and if you people, and if you sell software for sell software for sell software for $50 a month, $50 a month, $50 a month, but you don't turn it but you don't turn it but you don't turn it into an agency, don't into an agency, don't into an agency, don't build an agency build an agency build an agency on top of it, I think in on top of it, I think in on top of it, I think in a couple of years your a couple of years your a couple of years your business will be reduced to business will be reduced to business will be reduced to zero. Because someone zero. Because someone zero. Because someone will come along and say, "Yes, will come along and say, "Yes, will come along and say, "Yes, you want this software plus, you want this software plus, you want this software plus, let's say, a fully let's say, a fully let's say, a fully autonomous agent with autonomous agent with autonomous agent with 90% accuracy for 90% accuracy for 90% accuracy for $300-500 a month $300-500 a month $300-500 a month instead of instead of instead of paying $50 paying $50 paying $50 but firing but firing but firing the administrator or the administrator or the administrator or call call center staff?" They center staff?" They center staff?" They will pay those 300-500 will pay those 300-500 will pay those 300-500 dollars or whatever it dollars or whatever it dollars or whatever it takes.

takes. takes. So, does So, does So, does anyone use your software anyone use your software anyone use your software at all? It is related to at all? It is related to at all? It is related to jobs, but the jobs, but the jobs, but the situation is different. This is what situation is different. This is what situation is different. This is what should scare you. This should scare you. This should scare you. This makes you think: makes you think: makes you think: you need to be vigilant, you need to be vigilant, you need to be vigilant, because even if your because even if your because even if your business is business is business is doing well now doing well now , you are developing on , you are developing on , you are developing on your own and want to your own and want to your own and want to manage it forever— manage it forever— some of this will come some of this will come some of this will come to you now, and to you now, and to you now, and some to us in the some to us in the some to us in the coming years. coming years. coming years. OK. So, we're OK. So, we're OK. So, we're going to talk about some going to talk about some ...I'll go through ...I'll go through ...I'll go through this part quickly. These are this part quickly. These are this part quickly. These are the classic “moats” ( the classic “moats” ( benefits) that I benefits) that I benefits) that I was thinking about, that we’ve was thinking about, that we’ve was thinking about, that we’ve traditionally talked about traditionally talked about traditionally talked about in SaaS—why customers in SaaS—why customers in SaaS—why customers used to stay with used to stay with used to stay with us. I found us. I found us. I found nine reasons. I nine reasons. I nine reasons. I saw this slide saw this slide saw this slide this morning and this morning and this morning and realized there must be realized there must be realized there must be eight of them, but eight of them, but eight of them, but never mind, it doesn't really never mind, it doesn't really never mind, it doesn't really matter. It used to matter. It used to matter. It used to be like this: be like this: be like this: I have unique I have unique I have unique features, they won't features, they won't features, they won't leave because leave because leave because they need these features. I have a they need these features. I have a they need these features. I have a very strong brand, very strong brand, very strong brand, they will stay with they will stay with they will stay with me or me or me or continue to continue to continue to buy from me. buy from me. buy from me. I have my own I have my own I have my own traffic channels, SEO that I've traffic channels, SEO that I've traffic channels, SEO that I've been doing for years, been doing for years, been doing for years, smart code, complex smart code, complex smart code, complex algorithms, 5 years of algorithms, 5 years of algorithms, 5 years of polishing, polishing, polishing, refining, refining, refining, working around API bugs, and working around API bugs, and working around API bugs, and more. The team more. The team more. The team is used to my UX, they is used to my UX, they is used to my UX, they don't want don't want don't want to retrain people, to retrain people, to retrain people, so they won't so they won't so they won't switch.

switch. switch. I have 30 integrations. I have 30 integrations. I have 30 integrations. God, they're so God, they're so God, they're so hard to develop, hard to develop, hard to develop, aren't they? High aren't they? High aren't they? High switching costs, switching costs, switching costs, simply because it is difficult to simply because it is difficult to simply because it is difficult to extract data. I'm not extract data. I'm not extract data. I'm not sure they sure they sure they can be can be can be exported properly, and exported properly, and exported properly, and setting up a new setting up a new setting up a new workflow workflow workflow elsewhere is a elsewhere is a elsewhere is a real real real headache. Um, if a lot of headache. Um, if a lot of headache. Um, if a lot of people are coordinating people are coordinating people are coordinating actions in my actions in my actions in my app, it's like app, it's like app, it's like retraining—everyone retraining—everyone retraining—everyone has to switch has to switch has to switch at the same time when we at the same time when we at the same time when we switch, and I'm the switch, and I'm the switch, and I'm the system of record where system of record where system of record where all the data goes, and all the data goes, and all the data goes, and that's hard to change, that's hard to change, that's hard to change, right? Here are nine right? Here are nine right? Here are nine reasons I reasons I reasons I came up with. There are probably came up with. There are probably came up with. There are probably more of them. And we'll just more of them. And we'll just more of them. And we'll just check out a few of check out a few of check out a few of them, okay? So what them, okay? So what them, okay? So what does AI do? AI makes does AI do? AI makes does AI do? AI makes creating features creating features creating features easier, but it doesn't easier, but it doesn't easier, but it doesn't reduce the effort to reduce the effort to reduce the effort to zero. I don't want to zero. I don't want to zero. I don't want to pretend during this pretend during this pretend during this conversation that I can conversation that I can conversation that I can suddenly create a suddenly create a suddenly create a year's worth of software in a year's worth of software in a year's worth of software in a week. This is not true. week. This is not true. week. This is not true. But this significantly reduces the But this significantly reduces the But this significantly reduces the moat or barrier to moat or barrier to moat or barrier to quickly quickly quickly implementing new implementing new implementing new features that competitors already have features that competitors already have features that competitors already have . In . In . In terms of terms of terms of feature matching, I think all feature matching, I think all feature matching, I think all products will eventually products will eventually products will eventually become equal, because whoever become equal, because whoever become equal, because whoever is a master in is a master in is a master in product and UX, others will product and UX, others will product and UX, others will simply copy them simply copy them simply copy them using AI. using AI. using AI. Own Own Own traffic channels. I traffic channels. I traffic channels. I have 50/50 doubts about this.

have 50/50 doubts about this. have 50/50 doubts about this. Yes, if you have very Yes, if you have very Yes, if you have very good SEO, it's good. good SEO, it's good. good SEO, it's good. Is AI making Is AI making Is AI making marketing, like code, marketing, like code, marketing, like code, trivial, or is it trivial, or is it trivial, or is it starting to make starting to make starting to make marketing very marketing very marketing very confusing? That's right. confusing? That's right. confusing? That's right. Smart code, I think Smart code, I think Smart code, I think we can just we can just we can just accept that someone accept that someone accept that someone probably now that probably now that probably now that AI is solving hundreds of AI is solving hundreds of AI is solving hundreds of mathematical mathematical mathematical proofs...Has anyone heard proofs...Has anyone heard proofs...Has anyone heard of this? There are about of this? There are about of this? There are about a hundred mathematical a hundred mathematical a hundred mathematical proofs that have never proofs that have never proofs that have never been solved in been solved in been solved in human history, and human history, and human history, and they say it was done by they say it was done by they say it was done by Anthropic, Gemini, or someone Anthropic, Gemini, or someone Anthropic, Gemini, or someone else. They just else. They just else. They just untied a hundred of untied a hundred of untied a hundred of them. And A. and I were talking them. And A. and I were talking , and I said, "Well, I'm glad I'm , and I said, "Well, I'm glad I'm , and I said, "Well, I'm glad I'm not getting a not getting a not getting a PhD in PhD in PhD in mathematics." Like, what mathematics." Like, what mathematics." Like, what else is there else is there else is there to do, right? AI to do, right? AI to do, right? AI does everything. UX familiarity. does everything. UX familiarity. does everything. UX familiarity. Yes, if they are still Yes, if they are still Yes, if they are still people. If everything becomes people. If everything becomes people. If everything becomes agent-based, your UX won't matter agent-based, your UX won't matter agent-based, your UX won't matter at all at all at all . Integrations. Isn't an . Integrations. Isn't an . Integrations. Isn't an API just a API just a API just a specification that specification that specification that I can give my bot I can give my bot so it can so it can so it can write the hell out of code? write the hell out of code? write the hell out of code? Oh no, I'm getting Oh no, I'm getting Oh no, I'm getting depressed. Okay, and depressed. Okay, and depressed. Okay, and high switching costs high switching costs high switching costs used to be a used to be a used to be a significant factor. significant factor. significant factor. They still They still They still exist a little bit, but exist a little bit, but exist a little bit, but man, have man, have man, have you ever seen someone you ever seen someone you ever seen someone point an AI at an point an AI at an point an AI at an application and say, " application and say, " Extract all my data, Extract all my data, Extract all my data, even if there's no even if there's no even if there's no export"? Yes, it export"? Yes, it export"? Yes, it really can happen really can happen really can happen and does. So, out of and does. So, out of and does. So, out of those nine, I think those nine, I think those nine, I think three are still three are still relevant, like the relevant, like the recording system—it's a recording system—it's a recording system—it's a real thing. You real thing. You real thing. You will see it in this will see it in this will see it in this list. Coordination list. Coordination list. Coordination between people is a thing, and a between people is a thing, and a between people is a thing, and a brand plus some things is also a brand plus some things is also a thing. So, we have thing. So, we have thing. So, we have these three. I'll add these three. I'll add these three. I'll add five more, and we'll dig into them now five more, and we'll dig into them now five more, and we'll dig into them now . This is the . This is the . This is the most meaningful most meaningful most meaningful part of the speech. So part of the speech. So , to each of you, , to each of you, , to each of you, hey, quick: if you're hey, quick: if you're hey, quick: if you're benefiting benefiting benefiting from this talk, you from this talk, you from this talk, you should subscribe to the should subscribe to the should subscribe to the MicroConf YouTube channel. We MicroConf YouTube channel. We MicroConf YouTube channel. We publish all the publish all the publish all the presentations from MicroConf Europe.

presentations from MicroConf Europe. presentations from MicroConf Europe. So even if you weren't So even if you weren't So even if you weren't able to make it to able to make it to able to make it to Iceland, you Iceland, you Iceland, you can still get can still get can still get a lot of useful a lot of useful a lot of useful information from this information from this information from this event. We also have event. We also have event. We also have an archive of amazing an archive of amazing an archive of amazing talks from our talks from our talks from our previous events. previous events. previous events. Okay, let's Okay, let's Okay, let's get back to the topic. get back to the topic. get back to the topic. I will tell you what a I will tell you what a I will tell you what a moat is. moat is. I will give at least I will give at least two examples for two examples for two examples for each of them. And that's each of them. And that's each of them. And that's actually probably the actually probably the actually probably the most important part of the most important part of the most important part of the performance. I tried to performance. I tried to performance. I tried to give an example of a give an example of a give an example of a big company that big company that big company that we all know and a we all know and a we all know and a smaller one, like smaller one, like smaller one, like TinySeed from MicroConf, TinySeed from MicroConf, TinySeed from MicroConf, simply because I don't simply because I don't simply because I don't want to limit myself to want to limit myself to want to limit myself to advice like "hey, advice like "hey, advice like "hey, be like Slack, Facebook, or be like Slack, Facebook, or be like Slack, Facebook, or Google." That's not very Google." That's not very Google." That's not very helpful, is it? So I helpful, is it? So I helpful, is it? So I tried to take a tried to take a tried to take a big example and a big example and a big example and a small one, and small one, and small one, and at the end there's a at the end there's a at the end there's a question that will question that will question that will help you evaluate your help you evaluate your help you evaluate your own product in own product in own product in this context. What this context. What this context. What I didn't say at I didn't say at I didn't say at the beginning is that the the beginning is that the the beginning is that the M& M& M& A market is one of the A market is one of the A market is one of the reasons why A&R... So reasons why A&R... So reasons why A&R... So A&R approached this A&R approached this A&R approached this problem from the problem from the problem from the private equity private equity private equity and M&A market side, because a and M&A market side, because a and M&A market side, because a big part of what big part of what big part of what makes the whole makes the whole makes the whole SaaS ecosystem SaaS ecosystem SaaS ecosystem work and be work and be work and be so valuable is that so valuable is that so valuable is that private private private equity, which equity, which equity, which accounts for 70% of the acquisitions of accounts for 70% of the acquisitions of accounts for 70% of the acquisitions of our types of SaaS our types of SaaS companies, has been paying incredible multiples for the companies, has been paying incredible multiples for the companies, has been paying incredible multiples for the last six to last six to eight years, maybe eight years, maybe eight years, maybe longer longer . And . And they monitor the they monitor the they monitor the public markets.

public markets. public markets. So as So as So as HubSpot or Atlassian change, so does HubSpot or Atlassian change, so does private equity, and private equity, and these multiples these multiples these multiples change too. change too. change too. Even if you Even if you Even if you never plan never plan never plan to sell the business, this to sell the business, this to sell the business, this ecosystem works ecosystem works ecosystem works because there is because there is because there is a lot of a lot of a lot of money flowing into it. If you money flowing into it. If you money flowing into it. If you don't have any of these don't have any of these don't have any of these defensive moats, what does defensive moats, what does defensive moats, what does A&R at A&R at A&R at Discretion Capital watch? He Discretion Capital watch? He Discretion Capital watch? He runs an runs an runs an M&A consulting firm M&A consulting firm M&A consulting firm for SaaS companies with for SaaS companies with for SaaS companies with revenue between two and revenue between two and revenue between two and twenty million twenty million twenty million dollars. They see dollars. They see dollars. They see that private equity that private equity that private equity and strategic and strategic and strategic buyers are actually buyers are actually buyers are actually very scared not by very scared not by very scared not by the present, but by the fact that the present, but by the fact that the present, but by the fact that they don't know whether they don't know whether they don't know whether you will be in the market you will be in the market you will be in the market in a year, three or in a year, three or in a year, three or five years. So he five years. So he five years. So he came to the conclusion: what came to the conclusion: what came to the conclusion: what can you have in can you have in can you have in your business to your business to your business to give them confidence that give them confidence that give them confidence that you're you're you're going to last three to five going to last three to five going to last three to five years, so that they years, so that they years, so that they pay our old pay our old pay our old multipliers that multipliers that multipliers that we've been talking about all this time we've been talking about all this time we've been talking about all this time . I approach this . I approach this . I approach this more from a more from a more from a founder's perspective. founder's perspective. founder's perspective. He approaches He approaches He approaches this from the side of finance this from the side of finance this from the side of finance and private equity, and private equity, and private equity, and that's why these "moats" are and that's why these "moats" are and that's why these "moats" are important. Even if important. Even if important. Even if you don't plan you don't plan you don't plan to sell your business, to sell your business, to sell your business, even if you're even if you're even if you're developing with your developing with your developing with your own funds, this is own funds, this is own funds, this is protection against AI. And protection against AI. And protection against AI. And another interesting point: another interesting point: another interesting point: I prepared some I prepared some I prepared some slides about Atlassian and slides about Atlassian and slides about Atlassian and HubSpot—they HubSpot—they HubSpot—they reported reported reported earnings earnings earnings one day apart in August, one day apart in August, one day apart in August, about five weeks about five weeks about five weeks ago. HubSpot beat ago. HubSpot beat earnings expectations, executed a billion- billion- dollar share buyback, but their dollar share buyback, but their dollar share buyback, but their stock fell 21%, and stock fell 21%, and stock fell 21%, and Atlassian had similar Atlassian had similar Atlassian had similar results, but results, but results, but their MCP server their MCP server their MCP server doubled in usage doubled in usage , and AI made it , and AI made it , and AI made it better. They grew better. They grew better. They grew by 35%. It was a by 35%. It was a by 35%. It was a huge leap.

huge leap. huge leap. Imagine tens of Imagine tens of Imagine tens of billions of dollars billions of dollars billions of dollars changing hands changing hands changing hands . And when we . And when we . And when we look at it, we look at it, we look at it, we see that Atlassian, see that Atlassian, see that Atlassian, specifically Jira, has several specifically Jira, has several specifically Jira, has several such “moats,” such “moats,” such “moats,” while HubSpot’s while HubSpot’s while HubSpot’s inbound marketing tool is inbound marketing tool is inbound marketing tool is likely not to be likely not to be likely not to be destroyed, but destroyed, but destroyed, but to be massively to be massively to be massively negatively impacted by negatively impacted by negatively impacted by AI. So, we're already AI. So, we're already AI. So, we're already seeing it in the seeing it in the seeing it in the public markets, we public markets, we public markets, we 're seeing it in the 're seeing it in the 're seeing it in the private equity and M private equity and M private equity and M &A markets, and of course &A markets, and of course &A markets, and of course we're seeing it or will see we're seeing it or will see we're seeing it or will see it in the markets for companies it in the markets for companies that are growing on that are growing on that are growing on their own. their own. their own. Let's delve deeper Let's delve deeper Let's delve deeper into these "moats." The first into these "moats." The first is that buyers is that buyers is that buyers know you and know you and know you and trust you. I trust you. I trust you. I tried tried tried to summarize each of to summarize each of to summarize each of them with this them with this them with this wording, but there are wording, but there are wording, but there are more points. It's like, well, more points. It's like, well, more points. It's like, well, what does that mean, right? It's a what does that mean, right? It's a what does that mean, right? It's a strong brand, and strong brand, and strong brand, and you also know your you also know your you also know your customers and understand customers and understand customers and understand how they buy. You how they buy. You how they buy. You potentially have potentially have potentially have partners who partners who partners who have built their have built their have built their businesses on businesses on businesses on recommending you. And recommending you. And recommending you. And you have a supporter you have a supporter you have a supporter within the company within the company within the company who will fight for who will fight for who will fight for you. So the real, you. So the real, you. So the real, strongest form of strongest form of strongest form of this "moat" is when a this "moat" is when a this "moat" is when a competitor who competitor who competitor who came up with better came up with better software and can software and can write it quickly write it quickly write it quickly still has to still has to still has to build it all from build it all from build it all from scratch, you know?

scratch, you know? scratch, you know? Many of these "moats," Many of these "moats," Many of these "moats," in fact all of them, in fact all of them, in fact all of them, do not operate on an do not operate on an do not operate on an "on "on "on or off" basis. It's not a or off" basis. It's not a or off" basis. It's not a binary thing. Maybe binary thing. Maybe binary thing. Maybe it's a scale of zero to it's a scale of zero to it's a scale of zero to ten, right? From zero ten, right? From zero ten, right? From zero to one hundred. And you could to one hundred. And you could to one hundred. And you could say that Salesforce or say that Salesforce or say that Salesforce or Shopify are at Shopify are at Shopify are at level 90 on this level 90 on this level 90 on this metric, metric, metric, you know? And you you know? And you you know? And you might say, "Well, might say, "Well, might say, "Well, maybe I'm at maybe I'm at maybe I'm at level 10 now." How do I level 10 now." How do I level 10 now." How do I get to 20 or 30? get to 20 or 30? get to 20 or 30? Examples of this. A Examples of this. A Examples of this. A strong brand, strong brand, strong brand, customers know you, customers know you, customers know you, partners partners partners recommend you. QuickBooks is a recommend you. QuickBooks is a perfect example of perfect example of perfect example of this. A huge this. A huge this. A huge ecosystem. We could ecosystem. We could ecosystem. We could copy QuickBooks copy QuickBooks copy QuickBooks tomorrow, but we would have to tomorrow, but we would have to tomorrow, but we would have to fight fight fight accountants. Every accountants. Every accountants. Every accountant I've ever accountant I've ever accountant I've ever known says that QuickBooks known says that QuickBooks is terrible is terrible is terrible software. I software. I software. I hate hate hate using it, but using it, but using it, but I don't care because my I don't care because my I don't care because my accountant accountant accountant uses it and he uses it and he uses it and he loves it. And a better loves it. And a better loves it. And a better product doesn't give you a product doesn't give you a product doesn't give you a chance in this conversation. chance in this conversation. chance in this conversation. We've seen...I We've seen...I We've seen...I mean, Xero mean, Xero mean, Xero is doing pretty well, but is doing pretty well, but is doing pretty well, but how long has Xero been around, 10-12 years how long has Xero been around, 10-12 years how long has Xero been around, 10-12 years ? Shopify is ? Shopify is ? Shopify is another example. Their another example. Their another example. Their partner network is partner network is partner network is very extensive. very extensive. very extensive. There are many agents, There are many agents, There are many agents, I think literally I think literally I think literally thousands of agencies thousands of agencies thousands of agencies implementing implementing implementing stores on Shopify. So yeah stores on Shopify. So yeah stores on Shopify. So yeah , hey, it's on the , hey, it's on the , hey, it's on the slide. This must slide. This must slide. This must be true. So be true. So be true. So when a salesperson, if when a salesperson, if when a salesperson, if you go to a salesperson you go to a salesperson you go to a salesperson who hires an agency and who hires an agency and who hires an agency and asks, "What basket should asks, "What basket should asks, "What basket should I choose?" Well, they I choose?" Well, they I choose?" Well, they say, "Of course say, "Of course , we'll choose Shopify, , we'll choose Shopify, , we'll choose Shopify, right?" The platform has already right?" The platform has already right?" The platform has already been selected. Riv, two been selected. Riv, two been selected. Riv, two questions, sorry, yes, questions, sorry, yes, questions, sorry, yes, Riv, two examples, and Riv, two examples, and Riv, two examples, and now we have a question: now we have a question: now we have a question: who built their who built their who built their business or career on business or career on business or career on recommending or recommending or recommending or protecting you? This is one protecting you? This is one protecting you? This is one way to evaluate way to evaluate way to evaluate it. Rift number two, you are the it. Rift number two, you are the accounting system. What does this

accounting system. What does this accounting system. What does this mean? This is a source of mean? This is a source of mean? This is a source of reliable data reliable data reliable data within the business. This is within the business. This is within the business. This is the place around which the place around which the place around which daily operations are built daily operations are built daily operations are built . This means . This means . This means that people go there that people go there that people go there every day to every day to every day to do something. You can do something. You can do something. You can be the operating be the operating be the operating system for this system for this system for this business. If you business. If you business. If you fail, fail, fail, the business will be left the business will be left the business will be left with nothing. They with nothing. They with nothing. They can barely do anything. can barely do anything. can barely do anything. There are accounting systems that There are accounting systems that There are accounting systems that are more than are more than are more than just an operating just an operating just an operating system. If they system. If they system. If they have a data source have a data source have a data source that can't be easily that can't be easily that can't be easily exported and exported and exported and that everyone is constantly that everyone is constantly that everyone is constantly working on. But I think the working on. But I think the working on. But I think the biggest moat here is that the biggest moat here is that the day-to-day day-to-day day-to-day operations are built operations are built operations are built around you. You have around you. You have around you. You have balances, balances, balances, approvals, approvals, approvals, statuses, you have statuses, you have statuses, you have all sorts of things, live all sorts of things, live all sorts of things, live workflows. Roles workflows. Roles workflows. Roles and rules and rules and rules are set up, and many are set up, and many are set up, and many other systems other systems other systems are connected, either are connected, either are connected, either reading data for reading data for reading data for work or pumping work or pumping work or pumping data into you, and that data data into you, and that data data into you, and that data doesn't come back out. Jira is a good doesn't come back out. Jira is a good example of example of example of this. Isn't that right? We this. Isn't that right? We this. Isn't that right? We think of it simply think of it simply think of it simply as a task tracker as a task tracker , but there's so much , but there's so much , but there's so much more to it. I mean more to it. I mean , developers, , developers, , developers, managers, and product managers, and product managers, you have a managers, you have a managers, you have a lot of teams in Jira. You lot of teams in Jira. You lot of teams in Jira. You could export could export could export your tickets in half a day your tickets in half a day , but migrating all the , but migrating all the , but migrating all the history, history, history, audit trail, audit trail, audit trail, integrations, and integrations, and integrations, and moving all those moving all those moving all those commands to another commands to another commands to another system would be very, system would be very, system would be very, very painful. So very painful. So very painful. So the fact that it's an the fact that it's an the fact that it's an accounting system accounting system accounting system just has just has just has gravity. It has gravity. It has gravity. It has weight and pull, weight and pull, weight and pull, keeping you there.

keeping you there. keeping you there. Gymdesk is a small Gymdesk is a small Gymdesk is a small company from TinySeed. He company from TinySeed. He company from TinySeed. He had an incredible, had an incredible, had an incredible, stunning, stunning, stunning, fateful exit from the fateful exit from the fateful exit from the business. Imagine business. Imagine business. Imagine your gym, your gym, your gym, martial arts school, martial arts school, martial arts school, dojo, or yoga studio dojo, or yoga studio —your entire business —your entire business —your entire business runs on it. And it runs on it. And it runs on it. And it started, I do started, I do started, I do n't even remember how n't even remember how . It was just some . It was just some . It was just some part of the gym. And part of the gym. And part of the gym. And then suddenly it then suddenly it then suddenly it started integrating started integrating started integrating with the equipment so that with the equipment so that with the equipment so that people could people could people could use a use a use a special key special key fob to enter. And fob to enter. And fob to enter. And every aspect of the every aspect of the every aspect of the gym's operation— gym's operation— billing billing , payments—everything , payments—everything , payments—everything continued continued continued to evolve. So to evolve. So to evolve. So now, if you have a now, if you have a now, if you have a gym, you grab gym, you grab gym, you grab Gymdesk and you're done. No one— Gymdesk and you're done. No one— or very few— or very few— will give this up will give this up will give this up for for any artificial any artificial any artificial intelligence. So intelligence. So intelligence. So the question is, if the question is, if the question is, if your client wants to leave, your client wants to leave, your client wants to leave, what will they not be able what will they not be able what will they not be able to export? What to export? What to export? What will break in the will break in the will break in the workflow? And workflow? And workflow? And what would they have to what would they have to what would they have to create anew? create anew? create anew? Rift number three, this is where things get Rift number three, this is where things get Rift number three, this is where things get a little complicated, a little complicated, a little complicated, when Aida showed when Aida showed when Aida showed me these points and I me these points and I me these points and I asked, "What does this asked, "What does this asked, "What does this mean?" And I had to mean?" And I had to mean?" And I had to spend spend spend hours thinking. You hours thinking. You hours thinking. You have the right to act. What does have the right to act. What does have the right to act. What does this mean? If you are an this mean? If you are an instrument that only instrument that only instrument that only recommends that the clerk recommends that the clerk recommends that the clerk make a payment, then you are make a payment, then you are make a payment, then you are one type of instrument, one type of instrument, one type of instrument, as opposed to one as opposed to one as opposed to one that can that can that can make the payment itself and make the payment itself and make the payment itself and actually transfer the actually transfer the actually transfer the funds. So you give them a funds. So you give them a funds. So you give them a spreadsheet with a list of spreadsheet with a list of spreadsheet with a list of PayPal addresses and amounts?

PayPal addresses and amounts? PayPal addresses and amounts? Okay, then you are a Okay, then you are a reporting, analytical reporting, analytical reporting, analytical tool. Or are you tool. Or are you tool. Or are you actually actually actually transferring money? transferring money? transferring money? If you can If you can If you can transfer money, transfer money, transfer money, then you are acting. then you are acting. then you are acting. An example of this is Stripe An example of this is Stripe An example of this is Stripe Connect. No one is Connect. No one is Connect. No one is giving up giving up giving up Stripe Connect. He doesn't Stripe Connect. He doesn't Stripe Connect. He doesn't just recommend just recommend just recommend a payment, he actually a payment, he actually a payment, he actually transfers the funds. transfers the funds. The company with TinySeed—Reimbi. The company with TinySeed—Reimbi. He deals with He deals with He deals with reimbursement of reimbursement of reimbursement of expenses. If I want to expenses. If I want to expenses. If I want to invite a candidate invite a candidate invite a candidate for a job, pay for for a job, pay for for a job, pay for his flight, and his flight, and his flight, and he has expenses for he has expenses for he has expenses for food, hotel, etc. food, hotel, etc. food, hotel, etc. , I don't want , I don't want , I don't want to enter him as a to enter him as a to enter him as a supplier in the supplier in the supplier in the system. I want system. I want system. I want to pay him via to pay him via to pay him via Venmo, PayPal, or Cash App. Reimbi Venmo, PayPal, or Cash App. Reimbi Venmo, PayPal, or Cash App. Reimbi takes care of everything from takes care of everything from takes care of everything from start to finish. The start to finish. The start to finish. The fact that Reimbi can fact that Reimbi can fact that Reimbi can act means act means act means he has a pretty he has a pretty he has a pretty serious "moat." You don't serious "moat." You don't serious "moat." You don't have to be Stripe have to be Stripe have to be Stripe to be to be to be authorized authorized authorized to make payments. to make payments. And I added a And I added a third example here—Churnkey. third example here—Churnkey. third example here—Churnkey. If you are a SaaS company, If you are a SaaS company, If you are a SaaS company, you can implement you can implement you can implement Churnkey and they Churnkey and they Churnkey and they offer options offer options offer options when people when people when people try to try to try to cancel their subscription. cancel their subscription. cancel their subscription. They help, They help, They help, offer discounts and offer discounts and offer discounts and various various various options to options to options to try to reduce the try to reduce the try to reduce the churn of your churn of your churn of your customers. There are plenty of customers. There are plenty of customers. There are plenty of tools that tools that tools that will tell you who is will tell you who is will tell you who is about to leave, but about to leave, but about to leave, but Churnkey Churnkey Churnkey is literally allowed to intervene is literally allowed to intervene is literally allowed to intervene in the cancellation process in the cancellation process in the cancellation process and make an offer.

and make an offer. and make an offer. They are allowed to operate, They are allowed to operate, They are allowed to operate, allowed to reach out allowed to reach out allowed to reach out to your customers, and to your customers, and to your customers, and you don't even you don't even you don't even check on them. So check on them. So check on them. So the question is, the question is, the question is, can you act? can you act? can you act? Can your Can your Can your software act, software act, software act, or does it just give or does it just give or does it just give advice? Are you a advice? Are you a reporting tool reporting tool reporting tool or something that or something that or something that actually does something? actually does something? Point number four is another example. is another example. is another example. When he said that, I was When he said that, I was When he said that, I was like, "What are you like, "What are you like, "What are you even talking about?" They don't even talking about?" They don't even talking about?" They don't check your check your check your work. The best work. The best work. The best example of this is Gusto. I've example of this is Gusto. I've example of this is Gusto. I've been using Gusto for been using Gusto for been using Gusto for at least 10 years. at least 10 years. at least 10 years. No, probably around No, probably around No, probably around 2013. 13 years old. And I 2013. 13 years old. And I 2013. 13 years old. And I never never never checked their checked their checked their work. They report work. They report , and I could go to , and I could go to , and I could go to jail for some jail for some jail for some tax stuff tax stuff tax stuff if Gusto decided to if Gusto decided to if Gusto decided to frame me, because I frame me, because I frame me, because I never looked at never looked at never looked at anything other than the W-2 form anything other than the W-2 form anything other than the W-2 form they gave me. they gave me. they gave me. You just don't You just don't You just don't do it. And we can do it. And we can do it. And we can say, "Well, is that say, "Well, is that say, "Well, is that hard? Like, why do hard? Like, why do hard? Like, why do n't I do that?" Well, I do n't I do that?" Well, I do n't I do that?" Well, I do n't know. I don't n't know. I don't n't know. I don't understand this. Perfectly. understand this. Perfectly. understand this. Perfectly. So, will I switch to So, will I switch to So, will I switch to another service if another service if another service if someone uses AI someone uses AI someone uses AI to knock off a competitor to to knock off a competitor to to knock off a competitor to Gusto? No, because these guys Gusto? No, because these guys Gusto? No, because these guys fixed everything. Another fixed everything. Another fixed everything. Another example is Avalara, which is example is Avalara, which is example is Avalara, which is also taxes. Although also taxes. Although also taxes. Although it is a sales tax it is a sales tax . Um, again, we . Um, again, we . Um, again, we don't check the numbers.

don't check the numbers. don't check the numbers. I had a hard time I had a hard time I had a hard time finding a small, finding a small, finding a small, tiny example of a tiny example of a tiny example of a micro company for micro company for micro company for this case. So I this case. So I this case. So I only have two big only have two big only have two big examples. And it's not examples. And it's not examples. And it's not just that they're just that they're just that they're reliable, they've reliable, they've reliable, they've earned this permission, earned this permission, earned this permission, right? They've been right? They've been right? They've been doing everything right for years. doing everything right for years. doing everything right for years. So, as I said, So, as I said, So, as I said, if you try to if you try to if you try to stamp Gusto or stamp Gusto or stamp Gusto or Avalara, the transition is Avalara, the transition is Avalara, the transition is unlikely. unlikely. OK. We are already at the OK. We are already at the finish line. finish line. Fifth point...Oh yeah, that's the one Fifth point...Oh yeah, that's the one we added the other we added the other we added the other day. Because everything day. Because everything day. Because everything got mixed up. got mixed up. got mixed up. You know, you do this You know, you do this You know, you do this long enough and things long enough and things long enough and things start to get mixed up. start to get mixed up. start to get mixed up. Um, once we had 10 Um, once we had 10 Um, once we had 10 points, and then points, and then points, and then we realized...well, you can we realized...well, you can we realized...well, you can imagine what it's like imagine what it's like to build something to build something to build something like that from scratch. So, like that from scratch. So, like that from scratch. So, the point is the point is the point is that someone that someone that someone official has already said official has already said official has already said yes, and I mean, yes, and I mean, yes, and I mean, it's about it's about it's about regulations, licenses, regulations, licenses, regulations, licenses, accreditations, accreditations, accreditations, certifications, certifications, certifications, right? Anything where there right? Anything where there right? Anything where there is an outside board or is an outside board or is an outside board or body that oversees body that oversees body that oversees these things, and where you as a these things, and where you as a these things, and where you as a supplier have to supplier have to supplier have to go through qualifications, go through qualifications, go through qualifications, certification, etc.

certification, etc. Just because your Just because your customers do it— customers do it— I guess I have a I guess I have a I guess I have a point here—but just point here—but just point here—but just because your customers because your customers ...yeah, yeah. ...yeah, yeah. ...yeah, yeah. Serving Serving Serving regulated regulated regulated clients is not the clients is not the clients is not the same as having your own same as having your own same as having your own approval. After all, a approval. After all, a approval. After all, a competitor can competitor can competitor can copy your code. copy your code. copy your code. Again, each of Again, each of Again, each of these things is like: these things is like: these things is like: well, if well, if well, if copying code copying code copying code becomes faster and becomes faster and becomes faster and easier, and its easier, and its easier, and its cost goes cost goes cost goes to zero, like to zero, like to zero, like hard hard hard drive space, drive space, drive space, internet speed, internet speed, internet speed, bandwidth bandwidth , you get the idea? , you get the idea? , you get the idea? It just It just It just got closer to zero, got closer to zero, got closer to zero, didn't quite reach it, but it didn't quite reach it, but it didn't quite reach it, but it got closer. got closer. got closer. Let's assume, for the sake of Let's assume, for the sake of Let's assume, for the sake of argument, that argument, that argument, that the cost of code tends the cost of code tends the cost of code tends to zero. What else do these "moats to zero. What else do these "moats " (protective barriers) " (protective barriers) " (protective barriers) do for us? And that's the do for us? And that's the do for us? And that's the case where you case where you case where you should get...it should get...it should get...it could be ISO 27001. It could be ISO 27001. It could be ISO 27001. It could be, um...I wanted to could be, um...I wanted to could be, um...I wanted to say GDPR, but that's not what I meant say GDPR, but that's not what I meant say GDPR, but that's not what I meant . I was . I was . I was referring to SOC 2, but that's referring to SOC 2, but that's referring to SOC 2, but that's it...and those are just it...and those are just it...and those are just little speed bumps little speed bumps little speed bumps on the on the on the road, but they road, but they road, but they could also be things could also be things could also be things like...well, I'll get like...well, I'll get like...well, I'll get to that in a moment, I to that in a moment, I to that in a moment, I guess. HIPAA is guess. HIPAA is guess. HIPAA is another example. So another example. So another example. So the compliance is so the compliance is so the compliance is so strict that Vanta is strict that Vanta is strict that Vanta is literally a billion-dollar literally a billion-dollar literally a billion-dollar company that has company that has company that has only recently emerged, meaning only recently emerged, meaning only recently emerged, meaning they have been around for no they have been around for no they have been around for no more than 5 or 6 years.

more than 5 or 6 years. Because these things are Because these things are complicated, they complicated, they complicated, they take time, and they are take time, and they are take time, and they are expensive. An expensive. An example of a small example of a small company from TinySeed that's company from TinySeed that's company from TinySeed that's working on this, and if you working on this, and if you working on this, and if you tried to " tried to " code" ( code" ( intuitively) the same thing, it would be intuitively) the same thing, it would be very difficult very difficult very difficult because no one here because no one here because no one here knows what ABA is except the knows what ABA is except the knows what ABA is except the founder. I forget founder. I forget founder. I forget what it is, but it's what it is, but it's what it is, but it's like a psychology element like a psychology element related to it, but related to it, but they have courses that they have courses that they have courses that count towards the count towards the count towards the qualification qualification qualification requirements. And if you requirements. And if you requirements. And if you try to "cheat" try to "cheat" try to "cheat" it, you'll have to it, you'll have to it, you'll have to get get get council approval. Are council approval. Are council approval. Are any of us going to go through this any of us going to go through this any of us going to go through this ? No. So, ? No. So, ? No. So, she has a protective barrier she has a protective barrier she has a protective barrier around the business. Another around the business. Another around the business. Another example of this is one example of this is one I just I just I just thought about in the last thought about in the last thought about in the last few days. few days. few days. Texting Texting Texting in the US is in the US is in the US is shockingly difficult, and shockingly difficult, and shockingly difficult, and the laws there are much the laws there are much the laws there are much worse than for worse than for worse than for email. We email. We email. We thought we had a thought we had a thought we had a hard time with Drip. When I hard time with Drip. When I hard time with Drip. When I deal with SMS deal with SMS companies at TinySeed, I companies at TinySeed, I companies at TinySeed, I think, "Oh my God, I would think, "Oh my God, I would think, "Oh my God, I would never start a never start a never start a business in this field."

business in this field." business in this field." Well, that's what a protective Well, that's what a protective Well, that's what a protective barrier is, isn't it? So barrier is, isn't it? So , you need to... There's , you need to... There's operator registration, operator registration, consent laws, all sorts of consent laws, all sorts of consent laws, all sorts of restrictions. This is very restrictions. This is very restrictions. This is very burdensome. burdensome. It's not difficult to write software for this, but It's not difficult to write software for this, but working with working with working with text text text messages is messages is not very enjoyable. So that not very enjoyable. So that not very enjoyable. So that 's to some extent, 's to some extent, 's to some extent, you know, does that mean you know, does that mean you know, does that mean that nobody will ever that nobody will ever that nobody will ever do it? No, but it do it? No, but it do it? No, but it will be a barrier. So will be a barrier. So will be a barrier. So the question here is: the question here is: the question here is: what approvals, what approvals, what approvals, difficulties, legal difficulties, legal difficulties, legal nuances have you overcome nuances have you overcome nuances have you overcome that that a competitor will have to face? Number a competitor will have to face? Number six: everyone six: everyone six: everyone is already using your is already using your software. This is software. This is the idea of ​​the network the idea of ​​the network the idea of ​​the network effect. Who effect. Who effect. Who will have to will have to will have to transition if they transition if they transition if they leave your software? To leave your software? To leave your software? To one person? Well, one person? Well, one person? Well, she can she can she can switch in half a switch in half a switch in half a day, right? Do you have a whole day, right? Do you have a whole day, right? Do you have a whole team? Okay, everyone team? Okay, everyone team? Okay, everyone agrees to move agrees to move agrees to move next week. It's an next week. It's an next week. It's an entire community or entire entire community or entire entire community or entire company at the same time. This company at the same time. This company at the same time. This hurts. So the hurts. So the hurts. So the more people there are more people there are more people there are coordinating, the coordinating, the coordinating, the greater the protective greater the protective greater the protective barrier. Of course, the barrier. Of course, the barrier. Of course, the prototypical prototypical prototypical example of this is Slack. example of this is Slack. example of this is Slack. Some of us Some of us Some of us love him, some love him, some love him, some hate him. We all hate him. We all hate him. We all try to try to try to give it up.

give it up. give it up. Nobody does that Nobody does that . There are competitors to Slack. We . There are competitors to Slack. We . There are competitors to Slack. We can't name them can't name them can't name them because Slack is king. But because Slack is king. But because Slack is king. But you don't have to you don't have to you don't have to be Slack. Commit Swimming is a be Slack. Commit Swimming is a be Slack. Commit Swimming is a TinySeed company, TinySeed company, swim swim team management software built team management software built team management software built for coaches. But what do for coaches. But what do for coaches. But what do they do—and there are they do—and there are they do—and there are a lot of swim a lot of swim a lot of swim teams, there are adult teams, there are adult teams, there are adult teams, but imagine teams, but imagine teams, but imagine a bunch of kids' a bunch of kids' a bunch of kids' swim teams where swim teams where swim teams where all the parents are signed up all the parents are signed up all the parents are signed up for notifications, right for notifications, right ? Hey, here's the competition, ? Hey, here's the competition, ? Hey, here's the competition, here's the place, we're all here's the place, we're all here's the place, we're all going there, pizza party, going there, pizza party, going there, pizza party, etc. Every family has already etc. Every family has already etc. Every family has already signed up. These are signed up. These are signed up. These are mostly non-technical mostly non-technical mostly non-technical people. So the transition people. So the transition people. So the transition doesn't just mean a doesn't just mean a doesn't just mean a software change, but that everyone software change, but that everyone software change, but that everyone has to transition has to transition has to transition at the same time, and the entire league at the same time, and the entire league at the same time, and the entire league has to agree—that's a has to agree—that's a has to agree—that's a hassle, right? So hassle, right? So hassle, right? So the question here is: is this the question here is: is this the question here is: is this enough...this is a very enough...this is a very enough...this is a very interesting point, and interesting point, and interesting point, and of course it's difficult of course it's difficult of course it's difficult to achieve. Hmm, will to achieve. Hmm, will the competitor have to the competitor have to transfer everyone transfer everyone transfer everyone at the same time—that is the at the same time—that is the at the same time—that is the question. Number seven of question. Number seven of question. Number seven of eight. Every eight. Every eight. Every customer makes your customer makes your customer makes your software software smarter. You smarter. You will hear me use the will hear me use the will hear me use the term “ term “ term “ learning loop”. In a few learning loop”. In a few learning loop”. In a few hours we will hours we will hours we will talk about talk about talk about learning loops. An example of learning loops. An example of learning loops. An example of this is Stripe Radar, which this is Stripe Radar, which this is Stripe Radar, which detects fraud. And detects fraud. And detects fraud. And every merchant that every merchant that every merchant that Stripe has sees Stripe has sees Stripe has sees patterns of fraud, and patterns of fraud, and patterns of fraud, and that feeds into a that feeds into a that feeds into a collective intelligence that collective intelligence that collective intelligence that protects all other protects all other protects all other merchants. So, if merchants. So, if merchants. So, if you were to try you were to try you were to try to run your own to run your own to run your own Stripe Radar Stripe Radar Stripe Radar using only using only using only your data, it would your data, it would your data, it would cost much, cost much, cost much, much, much, much, much, much, much, much less than Stripe much less than Stripe much less than Stripe Radar. And their system is Radar. And their system is Radar. And their system is getting smarter.

getting smarter. getting smarter. No individual No individual No individual trader trader trader could ever build this could ever build this , right? And if you , right? And if you , right? And if you leave there, you leave there, you leave there, you lose it. This lose it. This lose it. This diagram shows that a diagram shows that a diagram shows that a certain certain certain situation arises. A person or situation arises. A person or situation arises. A person or software software takes action. You takes action. You see the result and see the result and see the result and then you correct it then you correct it then you correct it and improve it. and improve it. If you have a lot of If you have a lot of data, it doesn't data, it doesn't data, it doesn't mean anything. You need to be mean anything. You need to be mean anything. You need to be able to able to able to use this use this use this data to data to data to forecast for forecast for forecast for all your customers all your customers all your customers because it becomes a because it becomes a because it becomes a protective barrier, protective barrier, protective barrier, because switching means because switching means because switching means you lose it. you lose it. you lose it. Another example of this is Another example of this is Ramp, a service for Ramp, a service for Ramp, a service for accounting. Every accounting. Every accounting. Every correction that one correction that one correction that one of their customers of their customers of their customers makes, for example, to a makes, for example, to a makes, for example, to a Verizon expense line. Oh, I'll Verizon expense line. Oh, I'll Verizon expense line. Oh, I'll chalk it up to chalk it up to chalk it up to mobile phone costs mobile phone costs mobile phone costs or something. Well, everyone or something. Well, everyone or something. Well, everyone else gets it too else gets it too , right? This is a trivial , right? This is a trivial , right? This is a trivial example, but you example, but you example, but you get the idea. Or Churn get the idea. Or Churn get the idea. Or Churn Key, again, every Key, again, every Key, again, every cancellation, in theory, cancellation, in theory, cancellation, in theory, should improve should improve should improve their mechanism. I have their mechanism. I have their mechanism. I have n't really had a n't really had a n't really had a chance to chance to chance to contact the contact the contact the guys at Churn Key. I don't guys at Churn Key. I don't guys at Churn Key. I don't know if they know if they know if they do that or if they do that or if they do that or if they use a use a use a feedback loop, feedback loop, feedback loop, but rest assured, I'll but rest assured, I'll but rest assured, I'll contact them after contact them after contact them after this conversation and say, this conversation and say, this conversation and say, "Add this, because you "Add this, because you "Add this, because you have to have this have to have this have to have this protective barrier." So protective barrier." So , this only works , this only works , this only works if there are if there are if there are three clear barriers three clear barriers . First: every customer . First: every customer . First: every customer makes the product makes the product makes the product better for everyone else better for everyone else . It can't be . It can't be . It can't be isolated, where this isolated, where this isolated, where this customer does better customer does better customer does better just for themselves, because then just for themselves, because then just for themselves, because then they can build it themselves they can build it themselves they can build it themselves or a or a or a competitor can competitor can competitor can do it. Second: do it. Second: customers can customers can take away their data, take away their data, take away their data, but not what you but not what you but not what you learned from it. Yes, learned from it. Yes, learned from it. Yes, they can they can they can export them, but export them, but export them, but they don't know what they don't know what they don't know what you've learned. And you've learned. And you've learned. And lastly: you have to lastly: you have to lastly: you have to keep learning keep learning , right? Because if , right? Because if , right? Because if everything stagnates and you everything stagnates and you everything stagnates and you don't improve over

don't improve over don't improve over time, then it doesn't time, then it doesn't time, then it doesn't matter at all. matter at all. matter at all. They can just They can just They can just leave. Another example leave. Another example leave. Another example I was thinking of is I was thinking of is I was thinking of is Mailchimp. This is the only ESP that Mailchimp. This is the only ESP that Mailchimp. This is the only ESP that has been able to make the has been able to make the has been able to make the freemium model successful freemium model successful freemium model successful because the biggest because the biggest because the biggest problem in email is problem in email is problem in email is spam, and they created an spam, and they created an spam, and they created an engine called engine called engine called Omnivore that has learned Omnivore that has learned Omnivore that has learned to detect spam at the to detect spam at the to detect spam at the machine machine machine learning level. This was in learning level. This was in learning level. This was in 2009, long before 2009, long before 2009, long before all this AI stuff all this AI stuff . They are another good . They are another good . They are another good example. So your example. So your example. So your question is: does what question is: does what question is: does what happens to happens to happens to one customer make your one customer make your one customer make your product smarter product smarter product smarter for others? And one last for others? And one last for others? And one last thing I added just a thing I added just a thing I added just a few days ago, few days ago, few days ago, based on this based on this based on this tweet from Peter Levels. tweet from Peter Levels. tweet from Peter Levels. This is difficult This is difficult This is difficult to maintain in to maintain in to maintain in working order. So, working order. So, working order. So, Peter Levels Peter Levels Peter Levels tweets: "I've tweets: "I've tweets: "I've been trying for been trying for been trying for weeks now." This is the same weeks now." This is the same weeks now." This is the same Peter Levels, indie Peter Levels, indie hacker, half a million hacker, half a million hacker, half a million followers on Twitter. followers on Twitter. followers on Twitter. He just " He just " vibes" everything in a row. vibes" everything in a row. vibes" everything in a row. I mean, even I mean, even I mean, even some little things for some little things for some little things for 20-30 dollars he wants to " 20-30 dollars he wants to " vibe-code" and vibe-code" and vibe-code" and host himself, because that's host himself, because that's host himself, because that's Peter's style. So he Peter's style. So he Peter's style. So he is at the is at the is at the extreme pole of extreme pole of extreme pole of this approach. He this approach. He this approach. He tries to "vibe- tries to "vibe- code" everything. He code" everything. He code" everything. He tried to make tried to make tried to make ScrapingBee, it's a ScrapingBee, it's a ScrapingBee, it's a proxy service, a proxy service, a proxy service, a company with TinySeed, that company with TinySeed, that company with TinySeed, that helps you avoid helps you avoid helps you avoid getting banned getting banned getting banned while scraping, while scraping, while scraping, you know? Because everyone you know? Because everyone you know? Because everyone blocks your IP.

blocks your IP. blocks your IP. I tried writing the I tried writing the I tried writing the code, tried again. code, tried again. code, tried again. In the end, he's like, " In the end, he's like, " [ __ ] everything." "I [ __ ] everything." "I 'll just pay 'll just pay 'll just pay them 99 bucks a month them 99 bucks a month ." So, if ." So, if ." So, if you look at his you look at his you look at his list, he said, " list, he said, " These are the only things These are the only things These are the only things I'm crying about right now." "This is I'm crying about right now." "This is I'm crying about right now." "This is CloudFlare, bare metal CloudFlare, bare metal CloudFlare, bare metal servers, VPS and so on servers, VPS and so on servers, VPS and so on , and ScrapingBee." And it's , and ScrapingBee." And it's , and ScrapingBee." And it's like: "This is the turn. like: "This is the turn. " "These huge " "These huge " "These huge companies are ScrapingBee." companies are ScrapingBee." companies are ScrapingBee." Well, why is that? Because Well, why is that? Because Well, why is that? Because web scraping is not that web scraping is not that web scraping is not that difficult to build, but difficult to build, but difficult to build, but keeping it keeping it keeping it working so it doesn't get working so it doesn't get working so it doesn't get blocked is another blocked is another blocked is another headache. This is a headache. This is a headache. This is a bunch of devops. These are bunch of devops. These are bunch of devops. These are servers. This is a constant servers. This is a constant servers. This is a constant change of IP addresses. This is a change of IP addresses. This is a change of IP addresses. This is a huge hassle to huge hassle to huge hassle to operate. This is a operate. This is a operate. This is a burden. The guys from burden. The guys from burden. The guys from ScrapingBee sold ScrapingBee sold ScrapingBee sold the company. They had a the company. They had a the company. They had a great turnout. Exit great turnout. Exit great turnout. Exit with an eight-figure with an eight-figure with an eight-figure sum in cash. They sum in cash. They talked about it openly. But they did talked about it openly. But they did n't want to n't want to n't want to do it anymore. It was a do it anymore. It was a do it anymore. It was a real ordeal, but real ordeal, but real ordeal, but it was their it was their it was their defensive moat. CloudFlare. defensive moat. CloudFlare. defensive moat. CloudFlare. Exactly the same story, Exactly the same story, Exactly the same story, right? Are you going to right? Are you going to right? Are you going to "vibe-code" CloudFlare? "vibe-code" CloudFlare? "vibe-code" CloudFlare? If someone else is " If someone else is " vibe-coding" CloudFlare, will vibe-coding" CloudFlare, will vibe-coding" CloudFlare, will I switch there? No. This is an I switch there? No. This is an I switch there? No. This is an incredible protective incredible protective incredible protective barrier. It's just barrier. It's just barrier. It's just hard to maintain. hard to maintain. hard to maintain. Drip. May our souls rest in peace Drip. May our souls rest in peace Drip. May our souls rest in peace . They are . They are . They are reminders that reminders that reminders that we have been through this. Drip we have been through this. Drip — anyone can — anyone can — anyone can send an email. And so send an email. And so send an email. And so when I see people, I've when I see people, I've when I see people, I've seen someone seen someone seen someone trying to "vibe- trying to "vibe- code" something code" something code" something like an like an like an ESP, right? And ESP, right? And ESP, right? And they say, "Just they say, "Just they say, "Just connect your Amazon SES, connect your Amazon SES, connect your Amazon SES, and you can send your and you can send your and you can send your own emails." And yes, own emails." And yes, own emails." And yes, Benedict, you too. We Benedict, you too. We Benedict, you too. We just wag our just wag our just wag our finger at our temples finger at our temples finger at our temples because it's like, "No, no, no, because it's like, "No, no, no, because it's like, "No, no, no, you don't understand." " you don't understand." " you don't understand." " We had several We had several We had several people working full- people working full- people working full- time." "All they time." "All they time." "All they did was fight did was fight did was fight spam." You spam." You spam." You connect this to connect this to connect this to your SES account. This is a your SES account. This is a your SES account. This is a problem, right? So, uh problem, right? So, uh , these are our "moats."

, these are our "moats." , these are our "moats." The question is, is it The question is, is it The question is, is it hard to create, is hard to create, is hard to create, is it hard it hard it hard to maintain? Because what to maintain? Because what to maintain? Because what you hate and what you hate and what you hate and what annoys you annoys you annoys you may actually be a "moat." These are may actually be a "moat." These are may actually be a "moat." These are eight of them. And now I'll eight of them. And now I'll eight of them. And now I'll close with just a close with just a close with just a few slides. This is few slides. This is few slides. This is more of a thought more of a thought more of a thought experiment, we experiment, we experiment, we 'll be working on this 'll be working on this 'll be working on this next part for next part for next part for hours. So it will be hours. So it will be hours. So it will be quick. But I want to quick. But I want to quick. But I want to quickly answer the quickly answer the quickly answer the question: which ones are question: which ones are question: which ones are possible for you? And there are possible for you? And there are possible for you? And there are eight questions. Each of eight questions. Each of eight questions. Each of them corresponds to a them corresponds to a them corresponds to a certain "moat". certain "moat". certain "moat". You could probably You could probably You could probably ask two, three, ask two, three, ask two, three, four questions for four questions for four questions for each of them, right? each of them, right? each of them, right? So, who built it— So, who built it— you've heard some of you've heard some of you've heard some of them already. Who built them already. Who built them already. Who built their career or their career or their career or business on business on business on your recommendations? Do your recommendations? Do your recommendations? Do you have the you have the you have the final vision for final vision for final vision for the work, yes? Are you a the work, yes? Are you a the work, yes? Are you a record of work? Are record of work? Are record of work? Are you an accounting system? Are you an accounting system? Are you an accounting system? Are you just a you just a you just a reflection of that? Do reflection of that? Do reflection of that? Do you act, or do you just you act, or do you just you act, or do you just recommend? Do recommend? Do recommend? Do clients trust clients trust clients trust your results your results your results so much that they don't so much that they don't so much that they don't check them? What kind of check them? What kind of check them? What kind of approvals—this is about approvals—this is about approvals—this is about regulation, right? What regulation, right? What regulation, right? What permits or permits or permits or regulatory acts do you regulatory acts do you regulatory acts do you have that a beginner have that a beginner have that a beginner would have to wait for?

would have to wait for? would have to wait for? Who should approve Who should approve Who should approve your replacement? Does your replacement? Does one customer's experience improve the one customer's experience improve the product for everyone? And what product for everyone? And what product for everyone? And what do you support even though you do you support even though you do you support even though you hate doing it? hate doing it? hate doing it? This is my favorite. And I This is my favorite. And I This is my favorite. And I think this is the last think this is the last think this is the last slide. These are just slide. These are just slide. These are just examples of how, for examples of how, for examples of how, for each of the "moats," I each of the "moats," I each of the "moats," I could go from could go from could go from where I am today to where I am today to where I am today to getting that " getting that " moat." So, if I...and moat." So, if I...and moat." So, if I...and they are in the same order. they are in the same order. they are in the same order. So, if I had a So, if I had a So, if I had a vertical vertical vertical tool, I want to tool, I want to tool, I want to build build build an ecosystem. I want an ecosystem. I want an ecosystem. I want the supplier to the supplier to the supplier to become the one become the one become the one recommended by the industry recommended by the industry , right? If I am a point , right? If I am a point , right? If I am a point solution, can I solution, can I solution, can I become an become an become an accounting system? If I am a accounting system? If I am a accounting system? If I am a reporting tool reporting tool , can I learn to , can I learn to , can I learn to act—transfer act—transfer act—transfer money or enable something money or enable something , rather than just , rather than just , rather than just recommend? If I recommend? If I recommend? If I have something that does have something that does have something that does calculations, how do I calculations, how do I calculations, how do I become a source of data become a source of data become a source of data that no one that no one that no one checks? If I am in a checks? If I am in a checks? If I am in a regulated industry, regulated industry, regulated industry, how do I become an how do I become an how do I become an approved or approved or approved or primary primary primary supplier? Don't supplier? Don't supplier? Don't we see Anthropic we see Anthropic we see Anthropic and all and all and all AI vendors trying to AI vendors trying to AI vendors trying to actually regulate actually regulate actually regulate their industry to their industry to their industry to clean up after clean up after clean up after themselves? If I have a themselves? If I have a themselves? If I have a tool for tool for tool for one user, one user, one user, can I create a can I create a can I create a network effect that network effect that network effect that coordinates everyone?

coordinates everyone? coordinates everyone? If I collect data, If I collect data, If I collect data, can I create a can I create a can I create a learning loop? And if learning loop? And if learning loop? And if I have I have I have infrastructure that I infrastructure that I infrastructure that I maintain and maintain and maintain and hate, will it become a hate, will it become a hate, will it become a burden that no burden that no burden that no one else wants to one else wants to one else wants to bear? So, in bear? So, in bear? So, in conclusion, conclusion, conclusion, try to figure out try to figure out try to figure out which ones are yours or which ones are yours or which ones are yours or which ones you can which ones you can which ones you can move on to. Maybe you move on to. Maybe you move on to. Maybe you already have some of already have some of already have some of this today. this today. this today. You must have been lucky You must have been lucky . I think you're doing . I think you're doing . I think you're doing pretty pretty pretty well if you have well if you have well if you have at least one or two of at least one or two of at least one or two of these on your list. So these on your list. So these on your list. So if you define what if you define what if you define what is yours, or is yours, or is yours, or move in that move in that move in that direction, you will become more direction, you will become more direction, you will become more valuable and your valuable and your valuable and your business will be more business will be more business will be more secure. And, as I secure. And, as I secure. And, as I said, this conversation said, this conversation said, this conversation was about moats, about was about moats, about was about moats, about protection. And in a few protection. And in a few protection. And in a few hours we will hear from hours we will hear from hours we will hear from Einar about how to Einar about how to Einar about how to go on the offensive. go on the offensive. go on the offensive. So, that's So, that's So, that's all I have for today. We have time all I have for today. We have time all I have for today. We have time for questions. Thank you for questions. Thank you for questions. Thank you for watching. There for watching. There for watching. There was a lot of was a lot of was a lot of information in this report, so we information in this report, so we information in this report, so we turned it into a turned it into a turned it into a free free free guide: 10 Attacks, 8 guide: 10 Attacks, 8 guide: 10 Attacks, 8 Moats, and a Scorecard , Moats, and a Scorecard , that you can that you can that you can fill out for your fill out for your fill out for your business. Go business. Go business. Go to microconf.com/moats and we to microconf.com/moats and we to microconf.com/moats and we will send you this will send you this will send you this guide. You guide. You guide. You will also receive a recording of will also receive a recording of will also receive a recording of the question and the question and the question and answer session after the answer session after the answer session after the talk. We don't talk. We don't talk. We don't put it on YouTube, put it on YouTube, put it on YouTube, so that's the only place you so that's the only place you so that's the only place you can get it.

can get it. can get it. And if you want to And if you want to And if you want to attend attend attend next time, in next time, in next time, in 2027 MicroConf is heading to 2027 MicroConf is heading to 2027 MicroConf is heading to Austin, Texas, in Austin, Texas, in Austin, Texas, in April and to April and to April and to Dubrovnik, Croatia, Dubrovnik, Croatia, Dubrovnik, Croatia, in October. Watching these in October. Watching these in October. Watching these performances on YouTube is performances on YouTube is performances on YouTube is great, but the real great, but the real great, but the real magic happens magic happens magic happens live. You find yourself live. You find yourself live. You find yourself in a room with about 250 in a room with about 250 in a room with about 250 founders who founders who founders who understand exactly what understand exactly what understand exactly what you're building, and some of the you're building, and some of the you're building, and some of the best conversations best conversations best conversations happen in the lobby happen in the lobby happen in the lobby between pitches. between pitches. between pitches. The last seven, maybe The last seven, maybe The last seven, maybe eight eight eight MicroConf conferences have been completely MicroConf conferences have been completely MicroConf conferences have been completely sold out, so sold out, so sold out, so get your tickets now get your tickets now get your tickets now at microconf.com/events if at microconf.com/events if at microconf.com/events if you want to go. Tickets you want to go. Tickets you want to go. Tickets for these events for these events for these events will sell out and I will sell out and I will sell out and I hope to see hope to see hope to see you there. And if you you there. And if you you there. And if you already have a ticket or are already have a ticket or are already have a ticket or are just ready for just ready for just ready for another great another great another great performance, check this one out performance, check this one out performance, check this one out . See you . See you . See you there.