EP 08 – The SaaSpocalypse?

A founder named Avi Patel posted on X that a Y Combinator startup had just raised $31 million by copying his company — design, website, product idea and all — using AI to spin it up in days. General Catalyst led the round. Avi was furious. Harry and Anthony use it as the lens for a conversation that every SaaS founder and software investor needs to hear.

The cold capitalist read: this is just capitalism. Ideas are public domain. Execution is the only moat. If someone can copy your product in an afternoon with Claude and deploy it by Monday, then your real moat was never the software — it was the relationships, the distribution, and the domain expertise you built around it.

But there’s a deeper structural shift happening. Harry calls it the SaaSpocalypse. The entire valuation logic for software businesses was built on the assumption of long competitive advantage periods: high net retention, pricing power, durable margins, 20-year cash flow runways. AI collapses the competitive advantage period from 20 years to maybe 2. That means the multiple you paid — 10x revenue — was pricing a moat that no longer exists.

What replaces it: Anthony and Harry argue the new moat is human relationship + sales execution + domain depth. Not the software itself. The companies that survive are the ones building consultative relationships with customers — the ones where a customer thinks “I know the people there, they help us, I’m not switching.” The ones that are just a credit card on a SaaS dashboard are the ones that die.

They also get into Ken Griffin at Stanford: a former AI skeptic who watched Citadel’s PhD-level research teams get out-run by AI agents doing weeks of work in hours. When Griffin calls AI a “fantasy land for entrepreneurs,” he’s saying the moats of the incumbents — including his — are being bridged from every direction. That’s not a threat if you’re the builder. That’s the door opening.

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Follow Anthony: @djabatt | Follow Harry: @hdemott