AI Software Selloff: The Bottleneck isn't Technology, It’s Marketing
The market is panic selling SaaS stocks because "software is free." They are wrong. AI lowers the cost of coding, which expands margins. The new bottleneck isn't building the product; it's getting anyone to care.
Investors think cheap AI models kill SaaS. Actually, they kill the "Cost of Goods Sold." The winners won't be the best coders; they will be the best distributors.
Inspiration: Watching the market panic over DeepSeek and sell off software stocks, reminiscent of when they sold Google the day ChatGPT launched.
The market is panicking. With the release of cheaper, faster models (DeepSeek, Llama 3), investors are dumping SaaS stocks.
The Narrative: "If AI can write code for free, then software has no moat. Margins will collapse."
The Reality: This is backward. AI lowers the cost of building software. That doesn't kill SaaS; it increases margins. If I can build a feature for $100 instead of $10,000, my profitability explodes—if I have customers.
The Google Parallel
Remember when ChatGPT launched? The market dumped Google stock. "Search is dead!" Google came back. Why? Because they own the Distribution.
Technology is a commodity. Attention is the asset.
The Developer's Blind Spot: Marketing
Most developers are terrible marketers. They think: "If I build it, they will come." They won't.
We are entering an era of Infinite Supply.
- There will be 10,000 CRM apps.
- There will be 50,000 project management tools.
- All built by AI. All functional.
Who wins? The one with the best brand, the best sales team, and the best integrations.
The "Corporate Moat" (Shopify & Meta)
Look at Shopify. An indie dev can build an e-commerce store with AI in a weekend. But can they integrate deeply with Meta's Ad API, Google's Merchant Center, and TikTok's Shop? No.
That Partnership Moat is untouchable. Big SaaS wins because they have the rails. Shopify isn't just code; it's a legal and financial ecosystem. You can't prompt that into existence.
The "ClawdBot" Lesson
Look at the recent chaos with "ClawdBot" (or whatever it’s called today). The tech was fine. The Branding was a disaster. It got renamed multiple times in a few days. It confused users. It looked amateur.
It proved that Product-Market Fit is useless without Product-Message Fit.
Conclusion: The Marketing Arbitrage
The selloff is an opportunity. The market thinks software value is in the code. The value is in the customer.
My Prediction: The next generation of unicorns won't be founded by 10x Engineers. They will be founded by 10x Marketers who use AI to handle the engineering.
