Venture capitalist Jason M. Lemkin says software companies are blowing massive cloud and LLM spending without building profitable products their customers want. He calls it the biggest own-goal in history and warns many firms face terminal decline unless they aggressively build LLM agents that compete with Salesforce.
It's just brutal because there's been the amount of spend that has gone to cloud and LLMs is like nothing we've ever seen before. And if you're a public software company, you've captured none of that. It's a disaster. It's worse than it looks because you can't figure out any way to take all of that spend and turn it into an agent, an LLM that your, your 10,000, 50,000, 100,000 customers want to pay you more for. I mean, it is. The biggest fail and own goal in our history. And it's going to get worse. It's all worse than it looks because you can hide under multi-year contracts and annual contracts and price increases. And but like you, it's too— you had so much time. Like these 3 kids from Stanford that figured out how to use Opus. Why couldn't you? Why can't you put your 20 best engineers and just freaking clone Harvey or ElevenLabs or LoveWall? You all deserve to be fired.
It was probably a year of feeling ridiculous because you're talking about the small things. And the big thing is so much customers are saying, why aren't you focused on the big thing? And he just described very well what it took to be bloody-minded enough to make that happen. That's the kind of bloody-mindedness it's going to take to push through.
I just don't see it across startups and I don't see it in the public companies. You can go out there and say on Twitter LLMs are fungible and that systems of record should benefit because we own what matters and LLMs are commodity. I mean, give me a break. But they're dragging their companies with real product into the future. And I think everyone else, they're gonna— they're already starting to fall into the, the event horizon, into a state of terminal decline, that their teams don't want to do the work and that they're losing— they don't have the ideas. They don't have the ideas. Where's your agent that goes out and does all the work for your customer base, right? Um, they're just headed in the event horizon and they're trying to put on the jets, but it's, it's getting tougher each day to recover. Anyone in software, you got to be doing as good or better than Salesforce, I think you're hopeless. You're hopeless.
