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10 years building vertical software: are we cooked?
- marginalia_nu 7mo agoShow me even a single trader who would prefer a slow-ass chat interface to 36 monitors full of stock tickers and charts.
- gjsman-1000 7mo agoHeck; show me anyone who is not more productive with a boring old UI once they learn how to use it. Maybe with a chat interface as a how-to assistant.
- marginalia_nu 7mo agoThere's probably legit uses in finance for LLMs, in exploring potential scenarios and strategies, spit-balling ideas, summarizing financial news. Sure. Great. Maybe even as a trading agent, questionable, but I'd buy that as maybe happening. But replacing Bloomberg terminals with "Chat with NYSE", that is no exaggeration one of the most out of touch ideas I think I have ever heard in my life!
- MuffinFlavored 7mo agoIs trading even a real thing? Is there really a job title "trader"? Entities really think they can outperform DCA SPY?
- idiotsecant 7mo agoI guess you better go tell them they don't exist.
- t0mas88 7mo agoYes. Traders are involved in all kinds of deals that aren't like index funds.
- wrs 7mo agoWho do you think makes the price of SPY change?
- tptacek 7mo agoI think using the BB terminals as the big example here was probably not the best move; there are other huge vertical software platforms where this argument is more of a layup. (Though: you can do a lot with IB, right? Same deal.)
- zthrowaway 7mo agoGetting really sick and tired of the AI doomerism.
- gjsman-1000 7mo agoI’m sick and tired of people forgetting that with every field, the first 95% is easy, the last 5% is almost insurmountably hard and what people get paid for. Yelling “it’s 95% there, we’re so cooked” when anyone can be 95% there for any field since Google was invented doesn’t show much.
- Animats 7mo agoThat may be true, but it can mean layoffs of 95% of the employees.
- gjsman-1000 7mo agoYou completely missed the point. Technology, Google, all of it, makes it easy enough to learn how to do 95% of many common roles and fields. However, you will never be hired, or replaced, until you master that last 5%. Every role, even some of the lowest ranking, has its own insurmountable 5%. How well has fully replacing cashiers with self checkout gone, after… two decades… of trying? If we can’t fully replace a cashier yet, the most automatable role in existence, politely stuff your pie hole when saying AI will replace skilled roles.
- fnord77 7mo agoWas this generated by AI? Anyway, I dispute that there's "zero switching" costs to go from proprietary keyboard shortcuts to english sentences as the interface. In the bloomberg example, the shortcuts are precise. LLM's responses are not always what you want. Imagine being a vim or emacs user and have those replaced by something you have to type entire sentences for functionality. "Public Data Access → Commoditized" Also, no. Today I tried to have gemini pro give me some data from wikipedia for a list of countries that I supplied. It gave me data and source links, but the numbers were all wrong! I would have zero confidence in this for anything serious.
- xfour 7mo agoEven if it wasn't generated by AI, it reads like an advertisement for some company which sure sounds like a wrapper on top of a LLM. I think the moat for that type of company is a lot less defensible than any of the Vertically Integrated category leaders by a country mile.
- johntb86 7mo ago> Imagine being a vim or emacs user and have those replaced by something you have to type entire sentences for functionality. As a former vim user who uses cursor, I've found that as the models get better I'm typing less and less. I appreciate the vim key bindings, but eventually I can imagine not missing them.
- nickysielicki 7mo ago> Imagine being a vim or emacs user and have those replaced by something you have to type entire sentences for functionality. This has already happened for a non-negligible amount of people on this site. I still use magit to prepare commits and review diffs. Everything else is English and Claude code or opencode. Ironically, part of the reason I like emacs and formerly liked vim was because it reduced the amount of time my hands had to leave the keyboard. I simply look where I want to type, press the chord to jump with avy, and then begin typing. New tools are spiritually aligned with this goal. I look at the screen, I think about what I don’t like, and now instead of translating the criticism into code changes, I just stream my thoughts directly into the tool.
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- 3rodents 7mo agoThe bottom of the market fell out because of political turmoil. The U.S just revised job numbers down by a million for the first time in decades. The author’s thesis about the future of software businesses could be right or wrong but it is not the cause of the recent market collapse.
- zahlman 7mo ago> The S&P 500 Software & Services Index, 140 companies, fell 20% year to date. The overall index has been pretty well flat. What sectors gained? And surely there aren't 140 "software and services" companies in the top 500 by market cap?
- bigiain 7mo agoPretty sure there are 500 "software and services" companies in the The S&P 500 Software & Services Index.
- bts89 7mo ago500 is the target, not a hard requirement. The current SP500 index is comprised of 503 constituents. I’m also pretty sure S&P doesn’t maintain a ‘S&P 500 Software & Services Index‘. There is a ‘S&P Software & Services Select Industry Index’ with 140 constituents. That’s probably the index in question.
- zahlman 7mo agoRight; so if it's not "the software and services subset of S&P 500", then TFA was mistaken in including "500" in the name. That's what I was trying to establish. Either that, or there really are 140/503 software and service companies, and I learned something surprising.
- bts89 7mo agoAgreed. It’s likely just a typo.
- deleted 7mo ago[deleted]
- Animats 7mo ago> The overall index has been pretty well flat. What sectors gained? Data centers and AI. The current US economy is flat except for AI and data centers.[1] [1] https://fortune.com/2025/10/07/data-centers-gdp-growth-zero-first-half-2025-jason-furman-harvard-economist/ https://fortune.com/2025/10/07/data-centers-gdp-growth-zero-...
- JBAnderson5 7mo ago> Now consider what the same analyst does with an LLM agent: "Show me all software companies with over $1B market cap, P/E under 30, and revenue growing over 20% year over year. Build a DCF model for the top 5. Run sensitivity analysis on discount rate and terminal growth." While I think LLMs can improve the interface and help users learn/generate domain specific languages, I don’t see how a professional can trust an llm to get a technical request like this correct without verification. Wouldn’t a financial professional trust the Bloomberg llm agent that translates their request into a set of Bloomberg commands more?
- bwestergard 7mo agoYes, I balked at this point as well. Moreover, how do you accommodate new analysis concepts? What are you training the model on?
- nradov 7mo agoReal financial analysts already have DCF spreadsheets where they can just plug in numbers for any company. An LLM can help with fine tuning or catching errors but it's not a game changer.
- tptacek 7mo agoI think there's a lot of overstatement about LLM capabilities throughout this piece, but I think it's generally directionally correct. There's an attitude of "LLMs are just going to directly perform business logic" or "data extraction and ingestion" or "calculations". The reality is that deterministic human-mediated code is going to do all that stuff (and AI is going to drastically amplify human leverage in building that code), and LLM agents will call into it as tools. It's like the people who talk about how LLMs can't count the r's in "raspberry" and don't seem to understand that GPT5 can reliably e.g. work out a transformed probability distribution function from a given PDF by integration and derivation --- in part because frontier models are smarter but more importantly because they're all presumably just calling into CAS tooling.
- deleted 7mo ago[deleted]
- trescenzi 7mo agoI find this line of thinking so hard to follow. I happen to have worked at FactSet and when I was there we were stuck supporting chromium 18 because it was embedded in the version of the workstation that a partner had signed a contract which prevented them from needing to upgrade the base install. SASS is of course to some extent about functionality. Maybe it will make sense for larger customers to duplicate functionality themselves using AI. I very much doubt we’re anywhere near being able to prompt Claude and get FactSet out but fine we can grant that. The reason SASS is so valuable though is because it allows firms to pass off the costs and risk of maintenance behind SLAs. Why would you want to bring that risk in-house when you can essentially buy insurance against software errors by paying a SASS company?
- einrealist 7mo agoI can follow the arguments, and I find many of them plausible. But LLMs are still unreliable and require attention and verification. Ultimately, it's an economic question: the cost of training the model and the computing power required to produce accurate results. The strongest argument is the one about the interface. LLMs will definitely have a large impact. But under the hood, I still expect to see a lot of formally verified code, written by engineers with domain knowledge, with support by AI.
- jujube3 7mo agoyes.jpg
- jayd16 7mo agoNow that this guy is selling AI, surprise, surprise, its going to revolution everything else...But its misleadingly written as "we" are cooked. Its another ad, no?
- add-sub-mul-div 7mo agoLook at his submission history, nothing but self promotion. His entire presence here is just an ad.
- tptacek 7mo agoYou both need to take this stuff to hn@ycombinator.com instead of hashing it out here. I think you're wrong, but either way: stop crudding up the threads when all you've got to say is "this person submitted their own post". People do that all the time. Again: if you think they've crossed the line, the guidelines specifically ask you not take to the threads with it. Mail Dan and Tom. They'll get back to you quickly.
- hippo22 7mo agoIt’s worth asking: what do Wall Street traders know about building software companies? Almost nothing. Anyone who has attempted to start a startup knows that the software is always the easy part. Building the business is hard. The notion that we’re going to undo 100K+ years of specialization just so that companies can run mediocre, buggy versions of SaaS tools just to save a few bucks is crazy to me. SaaS stocks are currently the buying opportunity of a lifetime.
- outside1234 7mo agoAlso, has nobody thought about operations? I pay SaaS companies so I don't need to think about operations. It is insane to me to think that people think a restaurant company is going to suddenly want to get into managing the operations of its vibe coded accounting app. Absolutely not.
- nerdsniper 7mo agoYes, I’m very aligned with “minimal dependencies, live off the land, roll your own” to avoid lock-in and vendor bullshit. Shit I’d rather rent baremetal from Hetzner than VPS from EC2/GCP/etc if I have enough workload to justify it. But for my startup I still use a ton of SaaS services for things that I could probably do just fine myself. (Clerk/StackAuth, Supabase/PlanetScale, Cloudflare STUN/TURN, Clickhouse, Vercel, Calendly, Google Workspace, ngrok, Tailscale). Spiritually, I hate using these. Any one of these would be dead-simple to replace. But my time is genuinely better spent on my startup’s particular value-add. Maybe I’ll replace these some day when we can hire someone to manage internal replacement services - some of which are as easy as “a postgres database” or “wireguard on some VPS instances”. But it’s just not worth my time right now when I’m focused on building revenue. Even if they all cost $300/mo in total, and we’re bootstrapped, it’s a lot easier to cut back on UberEats or shiny nerdy toys than it is to replace all of these SaaS offerings. I recognize there’s a lot of ”I don’t know what I don’t know” and I’m liable to subtly misconfigure something in a potentially disastrous way.
- nradov 7mo agoThere's enough unhappiness with commercial SaaS EHRs that I expect as few health system CIOs will decide to operate their own vibe coded replacements. This won't work out well for most of them but I think it's going to happen.
- kristjank 7mo agoMy experience is that in most of small companies, the revenue extraction cycle from big SaaS suites has gone far enough that people are moving to self-hosted (or rather colocated with a local-ish provider that installs and provides unofficial support) software, like they used to do before the great plague. Considering how Zipf's law works, there might be a huge discrepancy coming on as we see the products deteriorating from all the AI and H1B spaghetti code to the point where LibreOffice appears quite competent by comparison. Most of the people I worked with just want to sell lamps or furniture or trumpets or whatever they do, and the inventions of modern SaaS make this a lot harder to do. Once enough small businesses stop paying their 5-user subscriptions, I think this whole thing will pivot heavily into the favor of those that just maintained their product well and didn't ensloppify it in the mantime.
- noosphr 7mo agoI build a website generator from Word files in a folder for a coop I'm in. Four years back I had to move it to using libre office because Word broke how links in files work. As of last year the whole coop is using libre office because it works better than ms office which has corrupted old important files multiple times. I don't see a reason why they can't move to an xfce Debian. Having a consultant come in once every 5 years to update everyones computers is a lot cheaper than all the ms licenes you have to pay for now and easier to use without constant breaking changes.
- tptacek 7mo agoI think this is more interesting as a rubric than as a prediction. I agree with some of it and not with others; I don't know if we're "cooked" or not; I do like how they've broken vertical software's moats down though. 1. I don't buy that chat interfaces will replacing existing user interfaces. I'm in particular a little bit familiar with Bloomberg's user culture. I don't know that I buy that it's going to be replaced with LLM chat prompts. But software agents are going to make faithfully reproducing those existing user interfaces much easier, so: half credit? 2. Half credit again on LLMs vaporizing the "business logic" moat, because the vertical-specific rules that justified the original software market are I think a lot harder to encode in Markdown than the 1 week they gave it, and also verification becomes a bear as more ground-truth business logic is replaced with nondeterministic AI output. There's a thing happening here for sure, I just don't buy it's as decisive as they say. 3. Public data access: I 100% buy this. If this was a real moat, it's dead. 4. Talent scarcity: same deal. Remember, we're talking about vertical software, where the underlying technical work is fairly repetitive and best-practices driven; it's the exact slice of software development work LLMs excel at. 5. Bundling (you get IB messaging along with your charting and your news service); maybe. This point feels tautological. Work out what LLMs do to each of the bundled experiences and there's your answer for how resilient that moat is. 6. Proprietary data: I think they're just dead on right here, and it does indeed seem to be a good time to be a company like Bloomberg? 7. Regs lock-in: half credit, because AI does make regs compliance a lot easier, and I think we're at the very early stages of seeing how. 8. Network effects seems like a repetition of "bundling" and if I have a qualm about this rubric it's that they made it look like an even 10, so they could have clean wins and losses. 9. Transaction embedding (ie, being a payment processor or a loan originator) also seems tautological; it's a moat, sure, but they're begging the question of whether AI enables people to stand up viable competitors. 10. I think "system of record" and "transaction embedding" are kind of the same moat. I wish people would not blog on X (I will call it X when it's used as a crappy blog platform); these ASCII charts are awful. But that's neither here nor &c.
- basilikum 7mo agoFrom the guidelines: > Please don't use HN primarily for promotion. It's ok to post your own stuff part of the time, but the primary use of the site should be for curiosity.
- hmokiguess 7mo agoGreat theory, in practice I just expect things to relocate and shuffle around as it usually goes.
- sublinear 7mo agoLLMs do a lot of things, but none of them well enough.