Matt

Always learning. b/g in data science, AI/ML. I write a bit. read at your own discretion. nothing is advice.

[Matt @MatterCapital]

@davey_juice Any good analyst can have a debate on their positions. I’ll never forget challenging his $PYPL thesis many years ago and his hostile and holier than thou responses told me everything about him. Oh yeah and the stock is down 81% in the past five years.

[Matt @MatterCapital]

@viggy_krishnan I’m an honest man and can admit when I was wrong or pessimistic. I tried it today with my car insurance — improved my coverage and saved me over 1k a year.

[Matt @MatterCapital]

@viggy_krishnan I’ve seen a couple of these examples shared on here without the prompt posted. I’m skeptical until shown otherwise that this is actually a thing.

[Matt @MatterCapital]

@blondesnmoney Market thinks SMSN earnings growth aren’t as durable within HBM. SKHY is expected to retain over 40% market share. Still the valuation is extremely difficult to defend.

[Matt @MatterCapital]

@XPeaked 2/2 People dunked on OAI for losing the Enterprise to Anthropic. They’ve refocused the company and now it’s a zero because some Slack, Tableau and SFDC GTM folks who have a fundamentally different skillset are out? Show me Engineering or Product at OAI that came from SFDC.

[Matt @MatterCapital]

@XPeaked 1/2 The same person who is a reason they poached Salesforce GTM is the reason they are now out. It’s really not that hard.

Selling Enterprise ChatGPT is very different than Codex or API usage, it’s as simple as that.

[Matt @MatterCapital]

@XPeaked If you think that’s by choice then…

[Matt @MatterCapital]

@XPeaked Salesforce employees shouldn’t be your barometer

[Matt @MatterCapital]

@alameldinkhaled @kaushikm_ This isn’t just any croissant. Best in all of the US if not the world.

[Matt @MatterCapital]

@cap_zay @RM_Transit Also getting a stop on the Barrie GO line…

[Matt @MatterCapital]

@sv_techie Good post but not taking into account any growth expansion via AI on productivity and GDP growth.

[Matt @MatterCapital]

@WatchMyReview Fair but Liljegren is getting scratched in San Jose who have an incredibly weak D corps.

[Matt @MatterCapital]

@negligible_cap @buccocapital Hence why you’re seeing the likes of dbx and snow converge into that space with FDE models

[Matt @MatterCapital]

@pitdesi Lokma or Pearl 6101

[Paul, not a CFA @Investmentideen]

Call me out in a few years when all my software investments go to zero:

AI (incl. “vibe coding”) commoditizes code, not systems of record. CSU owns mission‑critical systems of record in niche markets. Those moats are data, workflows, integrations & switching costs – not the difficulty of writing code.

Think about what CSU actually buys: 20‑year‑old billing, practice management, municipal, utility, hospital, etc. systems that are completely entangled with how that vertical runs. Replacing them is a multi‑year capex + career‑risking project. AI doesn’t change that risk calculus.

Vibe coding makes it cheap to stand up “an app”. It does not:
• migrate 15 years of messy production data
• recreate hundreds of integrations (banks, tax authorities, devices)
• rebuild reports auditors & regulators already trust
• retrain an entire workforce on new workflows

Most CSU businesses sit at a control point in the value chain. They are the authoritative ledger for money, people, or regulated data. That’s qualitatively different from a point solution that sends emails or draws dashboards on top of someone else’s data.

AI is great at “systems of action”: generating content, orchestrating tasks, moving data between APIs. Those are the tools that get nuked – thin SaaS wrappers around Gmail, Stripe, HubSpot, QuickBooks, etc. They have shallow data gravity and low switching costs.

But systems of record (ERP/CRM/core VMS) encode:
• strict data models & referential integrity
• audit trails, permissions, compliance
• deterministic workflows that boards, auditors, and regulators understand.
You don’t vibe‑code your general ledger or your clinical records.

We’ve seen a similar wave already: low‑code/no‑code. For a decade you could drag‑and‑drop your own business app. Did enterprises kill SAP, Oracle, or niche ERPs? No – they use low‑code at the edges while keeping standardized core systems. AI just turns that dial further.

The “every company will build their own ERP with AI agents” story underestimates non‑coding costs: product mgmt, domain expertise, change mgmt, security, incident response, integration maintenance. Most CSU end‑markets don’t even have the teams to run that experiment.

On margins: AI is more likely to be margin‑accretive for CSU‑type vendors. It:
• boosts dev productivity (faster features/integrations with same R&D)
• automates support, onboarding, documentation
• improves internal ops (billing, collections, forecasting)

Can buyers use AI to squeeze prices? Some, at the margin. But in most CSU verticals, software is 1–2% of revenue and mission‑critical. The binding constraint is risk, not license cost. As long as the app works and is maintained, there isn’t much appetite to rock the boat.

Meanwhile vendors can repackage AI as upsell: copilots, agents, forecasting, process mining. Core ERP/CRM pricing stays per‑seat/per‑site; AI is a new line item or higher tier. That’s ARPU expansion, not commoditization. The code got cheaper – the outcome got more valuable.

Where AI really hurts is exactly what you flagged: point solutions. Single‑feature SaaS that:
• sits at the UI layer
• talks to a few APIs
• has no proprietary data model or workflow depth.
Those become prompts: “Hey model, do what this $30/month SaaS was doing.”

Net effect:
• Point solutions & generic horizontal tools: heavy pressure.
• Core vertical systems of record: AI is an add‑on + cost reducer, not a replacement.
• CSU’s skill set (buying sticky, boring, regulated, low‑IT‑budget software) is aligned with where AI is least disruptive.

Could AI still reshuffle winners within verticals? Sure. Incumbents that ignore AI may lose to incumbents that embrace it. Some CSU properties will under‑invest and stagnate. But that’s competition at the margin, not “vibe coding obsoletes the whole business model.”

So why doesn’t AI commoditize CSU? Because their moat isn’t lines of code. It’s being the entrenched, audited, regulator‑blessed system that runs payroll, billing, tax, and operations for thousands of tiny niches. AI will sit on top of that stack long before it replaces it.

Oh and I haven't even started talking about the complexity of running a software company and building a team.

$CSU.TO $ACP.WA $SGN.WA $TOI.V $LMN.V

[Matt @MatterCapital]

@thecto X outage last time was supposedly due to them not paying their GCP bill

[Matt @MatterCapital]

@_tenZdhon_ Hi

[Matt @MatterCapital]

@fahdananta Did you also use Chit Chats to ship into the States via USPS and not pay absurd Canada Post rates?

[Matt @MatterCapital]

@StockTalk416 You lost me at Jonah Lupton

[Matt @MatterCapital]

@TheHimalayanYak @dalibali2 No