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10 years building vertical software: are we cooked?

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Re: 10 years building vertical software: are we cooked?

#41

Post by tptacek »

add-sub-mul-div wrote: post #36
jayd16 wrote: post #21

Now that this guy is selling AI, surprise, surprise, its going to revolution everything else...But its misleadingly written as "we" are cooked. Its another ad, no?

Look at his submission history, nothing but self promotion. His entire presence here is just an ad.

You both need to take this stuff to hn@ycombinator.com instead of hashing it out here. I think you're wrong, but either way: stop crudding up the threads when all you've got to say is "this person submitted their own post". People do that all the time.

Again: if you think they've crossed the line, the guidelines specifically ask you not take to the threads with it. Mail Dan and Tom. They'll get back to you quickly.

Re: 10 years building vertical software: are we cooked?

#42

Post by tptacek »

marginalia_nu wrote: post #2

Show me even a single trader who would prefer a slow-ass chat interface to 36 monitors full of stock tickers and charts.

I think using the BB terminals as the big example here was probably not the best move; there are other huge vertical software platforms where this argument is more of a layup.

(Though: you can do a lot with IB, right? Same deal.)

Re: 10 years building vertical software: are we cooked?

#44

Post by marcus_holmes »

hippo22 wrote: post #22

It’s worth asking: what do Wall Street traders know about building software companies? Almost nothing. Anyone who has attempted to start a startup knows that the software is always the easy part. Building the business is hard. The notion that we’re going to undo 100K+ years of specialization just so that companies can run mediocre, buggy versions of SaaS tools just to save a few bucks is crazy to me. SaaS stocks are…

We spent the last 20 years building a whole set of specialised little tools on the web to do specialised little tasks for businesses.

Now an LLM can do most of that, easier, and effectively for free. The first pass on a new problem is not googling to see if there's a SaaS for that, it's prompting an LLM to see if it can do it, or if it can build a tool that can do it.

Case in point: in my job we have to data-enter invoices. I have dealt with or in this industry for 30-ish years. I worked on various projects trying to get computers to read invoices, to various degrees of success. It's a hard problem; there's no standard format, or layout. Every company does its invoices differently. Some are Excel files, some are PDFs, some are Word docs, etc.

This entire problem vanished this year. You get an LLM to read the invoice. It does this more accurately than humans do. Job done.

There are entire SaaS businesses that read invoices that are now obsolete and have no moat.

Re: 10 years building vertical software: are we cooked?

#45

Post by nradov »

marcus_holmes wrote: post #44
hippo22 wrote: post #22

It’s worth asking: what do Wall Street traders know about building software companies? Almost nothing. Anyone who has attempted to start a startup knows that the software is always the easy part. Building the business is hard. The notion that we’re going to undo 100K+ years of specialization just so that companies can run mediocre, buggy versions of SaaS tools just to save a few bucks is crazy to me. SaaS stocks are…

We spent the last 20 years building a whole set of specialised little tools on the web to do specialised little tasks for businesses. Now an LLM can do most of that, easier, and effectively for free. The first pass on a new problem is not googling to see if there's a SaaS for that, it's prompting an LLM to see if it can do it, or if it can build a tool that can do it. Case in point: in my job we have to data-enter in…

There has been a standard X12 EDI format for invoices for decades. It's kind of a hassle to work with but it can at least be reliably parsed. A lot of huge businesses like Walmart use it successfully, and even require their suppliers to submit all invoices that way.

I don't object to using LLMs to parse PDFs but over the long run it's going to be less efficient and reliable than other options.

Re: 10 years building vertical software: are we cooked?

#46

Post by walt_grata »

outside1234 wrote: post #24
hippo22 wrote: post #22

It’s worth asking: what do Wall Street traders know about building software companies? Almost nothing. Anyone who has attempted to start a startup knows that the software is always the easy part. Building the business is hard. The notion that we’re going to undo 100K+ years of specialization just so that companies can run mediocre, buggy versions of SaaS tools just to save a few bucks is crazy to me. SaaS stocks are…

Also, has nobody thought about operations? I pay SaaS companies so I don't need to think about operations. It is insane to me to think that people think a restaurant company is going to suddenly want to get into managing the operations of its vibe coded accounting app. Absolutely not.

Or how you'll get all your data out and imported into your custom system.

Re: 10 years building vertical software: are we cooked?

#47

Post by hippo22 »

marcus_holmes wrote: post #44
hippo22 wrote: post #22

It’s worth asking: what do Wall Street traders know about building software companies? Almost nothing. Anyone who has attempted to start a startup knows that the software is always the easy part. Building the business is hard. The notion that we’re going to undo 100K+ years of specialization just so that companies can run mediocre, buggy versions of SaaS tools just to save a few bucks is crazy to me. SaaS stocks are…

We spent the last 20 years building a whole set of specialised little tools on the web to do specialised little tasks for businesses. Now an LLM can do most of that, easier, and effectively for free. The first pass on a new problem is not googling to see if there's a SaaS for that, it's prompting an LLM to see if it can do it, or if it can build a tool that can do it. Case in point: in my job we have to data-enter in…

I think that’s different. You have a problem: invoice management. LLMs have made that cheaper and you should expect disruption. But you’re not building your own invoice scanner. You’re using another, cheaper product on the market.

However, the hypothesis in the SaaS market is that LLMs have made software have zero value and therefore the SaaS companies will be less profitable. That’s like if wood was suddenly free, expecting home builders to go out of business. If anything, home builders are going to do better, because they can apply their expertise while deploying capital elsewhere. We should expect software companies to be more profitable, not less.

Of course, there are exceptions. Sometimes AI replaces the product itself, e.g. image generation models vs. contractors on fiverr.

Re: 10 years building vertical software: are we cooked?

#48

Post by zahlman »

bts89 wrote: post #33
bigiain wrote: post #12

Earlier quoted context omitted.

Pretty sure there are 500 "software and services" companies in the The S&P 500 Software & Services Index.

500 is the target, not a hard requirement. The current SP500 index is comprised of 503 constituents. I’m also pretty sure S&P doesn’t maintain a ‘S&P 500 Software & Services Index‘. There is a ‘S&P Software & Services Select Industry Index’ with 140 constituents. That’s probably the index in question.

Right; so if it's not "the software and services subset of S&P 500", then TFA was mistaken in including "500" in the name.

That's what I was trying to establish.

Either that, or there really are 140/503 software and service companies, and I learned something surprising.

Re: 10 years building vertical software: are we cooked?

#49

Post by bts89 »

zahlman wrote: post #48
bts89 wrote: post #33

Earlier quoted context omitted.

500 is the target, not a hard requirement. The current SP500 index is comprised of 503 constituents. I’m also pretty sure S&P doesn’t maintain a ‘S&P 500 Software & Services Index‘. There is a ‘S&P Software & Services Select Industry Index’ with 140 constituents. That’s probably the index in question.

Right; so if it's not "the software and services subset of S&P 500", then TFA was mistaken in including "500" in the name. That's what I was trying to establish. Either that, or there really are 140/503 software and service companies, and I learned something surprising.

Agreed. It’s likely just a typo.

Re: 10 years building vertical software: are we cooked?

#50

Post by gjsman-1000 »

Animats wrote: post #30
gjsman-1000 wrote: post #5

Earlier quoted context omitted.

I’m sick and tired of people forgetting that with every field, the first 95% is easy, the last 5% is almost insurmountably hard and what people get paid for. Yelling “it’s 95% there, we’re so cooked” when anyone can be 95% there for any field since Google was invented doesn’t show much.

That may be true, but it can mean layoffs of 95% of the employees.

You completely missed the point.

Technology, Google, all of it, makes it easy enough to learn how to do 95% of many common roles and fields. However, you will never be hired, or replaced, until you master that last 5%. Every role, even some of the lowest ranking, has its own insurmountable 5%. How well has fully replacing cashiers with self checkout gone, after… two decades… of trying?

If we can’t fully replace a cashier yet, the most automatable role in existence, politely stuff your pie hole when saying AI will replace skilled roles.

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