Become Unsloppable
New Dwarkesh-Dario podcast, Nick Bostrom re-emerges with new paper, Huberman goes viral on TBPN, and more
Happy Friday.
The current things in tech and business are widespread dismay over the FDA issuing a Refusal-to-File (RTF) letter to Moderna for their mRNA influenza vaccine, Andrew Huberman’s comments on retatrutide being the next “trillion-dollar drug,” and Anthropic’s $30B Series G.
Today’s lineup
Investor and businessman Martin Shkreli at 12:00 PM
Meta Head of Threads Connor Hayes at 12:30 PM
DataDirect Networks Co-Founder and CEO Alex Bouzari at 1:00 PM
Figure AI Founder and CEO Brett Adcock at 1:30 PM
Daily Op-Ed, by Jordi Hays
Become Unsloppable
SaaSpocalypse is here.
“Software has undergone the largest non-recessionary 12-month drawdown in over 30 years (-34%), wiping out ~$2 trillion of market cap from the peak” — J.P. Morgan (Dubravko Lakos-Bujas, Feb 10, 2026)
“AI Threat Sparks Historic Software Stock Crash: Goldman Sachs Warns of Newspaper-Like Decline”
As of yesterday, over the prior 8 trading sessions, more than 20% of the S&P 500 had a drawdown of 7% or more in a single session.
As I write this, it seems very likely that more code will be written in the next 12 months than in all of human history combined. This is clearly great for humanity as there is seemingly unlimited demand for software and automation in all areas of modern life. But as exciting as the implications are for humanity, many of our Silicon Valley darlings have some difficult questions to answer.
Everything was great when we were disrupting manual workflows. But as we enter the software singularity, we are having the uncomfortable experience of disrupting ourselves.
Assume the marginal cost of software development goes to zero. If you are a software company where your moat was that a competitor would have to spend a billion dollars to hire a bunch of software engineers to write millions of lines of code to create a product, and you have no other moats, it’s going to be rough.
Thankfully, there are moats that are unaffected by coding agents and effectively zero-cost software development. Peter Thiel outlined four key sources of monopoly power in Zero to One back in 2014. Let’s revisit them:
Proprietary Technology
Network Effects
Economies of Scale
Brand (i.e. trust)
Most of these still hold, but proprietary technology by itself is no longer sufficient as a moat.
Becoming “Unsloppable” means two things. First, your business actually has to derive its economic power from a moat that is Unsloppable, and second, you need to clearly communicate that to shareholders. Right now, if the market thinks you’re just a bunch of lines of code, you’re cooked.
Tech companies I think of as “Unsloppable”
Hardware: Nvidia, AMD, Intel, Cisco, Broadcom, SK Hynix, Sandisk, Western Digital
Data Center Owners: Neoclouds, CoreWeave, Lambda
Social Networks: YouTube, Instagram, X, LinkedIn, Roblox
Marketplaces: AirBnB, Uber, DoorDash
IP Holders: Disney, Netflix, Warner Bros.
Platforms: YouTube, Spotify, etc.
It’s been an incredibly rough couple of weeks for public market CEOs. Doesn’t matter what kind of quarter you had, it’s been hard to avoid a massive sell-off.
There are two main questions everyone wants to know (even if they already sold your stock to buy atoms):
Do you have a durable moat in the software singularity?
Are you a true beneficiary of AI?
Many CEOs are still struggling to answer #1 because it really doesn’t matter what they say at this point. Just having to answer the question = sell off. On #2, this one can really only be answered in the numbers. You aren’t an immediate AI beneficiary if revenue is not accelerating.
Also, separately, there are a bunch of other crazy things happening in the economy right now that could be causing selling pressure unrelated to erosion of software-based moats.
It’s possible to be Unsloppable but not an obvious beneficiary, but you’ll still likely sell off, as the market digests and interrogates the actual real world impacts of coding agents. Some industries will be more resistant to change, other industries will be revealed to have a secret source of market power that was underappreciated in the before times.
A lot of the software market feels like the Office Equipment and Imaging sector in the 90s (remember Sharp, Ricoh, Canon, Panasonic). Revenue up and to the right, but widespread adoption of the internet, email, and PDFs on the horizon. Even today, you’ll still find a fax machine in every doctor’s office, and many of the giants of that era are still around, but if you stayed in those names you would have missed out on generational gains by simply being long PDF.
Headlines
Dwarkesh drops Dario interview
Coinbase posts earnings call recording with brainrot Subway Surfers clip
Marginal Revolution: I Regret to Inform You that the FDA is FDAing Again
Bloomberg: OpenAI Claims DeepSeek Distilled US Models to Gain an Edge
Forbes: ‘Misanthropic And Evil’: Musk Rails Against Anthropic After Its $30 Billion Fundraise
Bloomberg: Shield AI in Talks to Raise $1 Billion at $12 Billion Valuation
WSJ: The Mega-Rich Are Turning Their Mansions Into Impenetrable Fortresses
Crypto Briefing: Dutch House passes 36% tax on unrealized crypto and investment gains
Meta’s Threads releases Dear Algo feature
CBS: Trump administration moves to end “universally hated” start/stop feature for cars
Bloomberg: Tech Billionaires Swap Hoodies for Sandals in Tropical Miami
CNBC: Amazon’s Ring cancels Flock partnership amid Super Bowl ad backlash
The Stanford Review: Is YC for Cowards?
WSJ Opinion: Vinay Prasad’s Vaccine Kill Shot
Claude app is top-10 in the App Store
WSJ: The Booming Business of Luxury Grocery Stores
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