'Software companies taste like chicken,' says private-equity mogul. 'They’re selling different products, but 80% of what they do is pretty much the same'

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SHOW NOTES:

THE MARKET USUALLY ONLY SUPPORTS THREE OPTIONS

Walking around KubeCon,nearly every segment had 6-10 companies offering solutions
Markets can’t sustain more 3 in any category (Market Leader, Market Follower, Cheaper Option)
The Market can’t understand the differentiation of the 6-10 company market; 80% of the functionality is the same.
We’re coming out of Unicornpalozza (2019-2022)

OPEN SOURCE AND SAAS HAVE HOLLOWED OUT THE MIDDLE OF SOFTWARE

Open source typically highlights the creator, largest contributor to a project
Beyond that, open source is “integration” companies, or “lifecycle” companies
Large companies (or platforms) can buy up the “feature” companies to fill in their gaps
Companies in the middle have to build sales and marketing around mostly undifferentiated messaging or products.
SaaS allows companies to leverage product-led-growth, and micro-target to specific use-cases.
The successful middle (mid-sized, decent growth) will get picked off by PE
The unsuccessful middle (great tech, bad execution) may get picked off by large vendors
The unsuccessful middle (average tech, bad execution) will go under

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