Software is eating the world faster than ever before. We've all heard Marc Andreessen's famous quote, but what we're witnessing now isn't just software eating the world – it's AI accelerating that consumption at a pace we've never seen before. At Valsoft, we stand at a critical juncture. Our traditional advantages – our distribution channels, our acquisition playbook, our transformation process – are eroding faster than most realize.
In a world where AI-assisted development compresses months into days, our distribution-heavy but acceleration-light approach has become our Achilles' heel. Solo developers with AI tools can now build sophisticated solutions in days, while small teams rapidly capture market share. Even our own employees, understanding these dynamics, could potentially outmaneuver us.
But this threat is also our greatest opportunity. The forces eroding our advantages could become our strengths – if we embrace radical transformation. We have the resources, market presence, and business acumen. What we need is a fundamental shift in how we approach software development, team structure, and value creation in the AI era.
This is our moment to redefine Valsoft as Valsoft X – a company built for the AI era, where speed of development, AI integration, and hyper-tailored solutions become our competitive advantages. The market won't wait, and neither should we.
The Problems with Our Current Approach
Our approach to software development and business transformation isn't just outdated – it's fundamentally misaligned with modern realities. Our biggest blind spot is modernization. We've invested millions in rewrites and cloud migrations, repeatedly hitting the same wall: expecting V1 teams to build V2 solutions while the world races toward V3.
Here's the core paradox: the expertise that makes our teams excellent at maintaining V1 often makes them the wrong choice for building V2. It's not about technical skills – it's about mindset. When you've spent years mastering one paradigm, it becomes nearly impossible to think outside it. We're asking classical musicians to write hyperpop and wondering why it doesn't work.
Our R&D investments reflect this dated thinking. In a world where software development velocity has increased by orders of magnitude, we're still operating on old assumptions. Our distribution channels – once our greatest strength – are becoming liabilities as competitors build comparable solutions in weeks rather than years.
The most dangerous part? Every day we continue this way, we fall further behind. While we debate modernizing VB6 applications, competitors are building new solutions from scratch in weeks. Our success has become our weakness – we're so proficient at our traditional approach that we're blind to its limitations. We're like a champion boxer who's mastered the rules of their sport, only to find themselves in a UFC octagon.
If I Left Valsoft: A Thought Experiment
Here's a scenario that keeps me up at night – not because it's frightening, but because it's entirely possible today. Imagine I left Valsoft tomorrow. I'd target one of our weaker businesses where I understand the market dynamics. With today's AI-assisted development tools, I could rapidly build a streamlined solution focused on core customer needs. No need to replicate every feature – just deliver real value through a modern, responsive solution.
The strategy would be simple but devastating: Use the first customer as a beachhead, then leverage each success to fuel the next conquest. Every new customer provides not just revenue, but validation and resources for expansion. I'd build a team of pioneers who understand AI-enabled development, creating a more agile version of Valsoft – one moving at the speed of thought rather than traditional development cycles.
The truly sobering part? This playbook is available to anyone who understands our portfolio's weaknesses. Look at what's happening in our own building – non-traditional developers using AI are producing work that seasoned developers would struggle with. Vincent, with a math background, built a POC that a competitor just received $3M in funding to develop.
YC is already funding vertical market software acquirers aiming to automate entire businesses with AI. While their vision of running $1B AUM with one employee might be premature, it signals where the industry is heading. The democratization of software development means small, nimble teams can now accomplish what once required large organizations.
But here's our opportunity: Every vulnerability described is also a potential advantage – if we're willing to embrace radical change. Instead of waiting to be disrupted, we can become the disruptor. We have what solo entrepreneurs don't: established customer relationships, deep industry knowledge, and significant resources. We just need the courage to disrupt ourselves before someone else does.
The New Force Multipliers
In today's software landscape, velocity isn't just an advantage – it's survival. But true velocity isn't about working faster; it's about force multipliers that compound your impact. Consider this: a VB6 application and a modern TypeScript solution might both generate $3 million in revenue. The critical difference emerges when you need to adapt – the modern stack becomes a force multiplier that dramatically accelerates your ability to capture market share.
Following James Clear's work on multiplication effects, we've identified three critical force multipliers: A-class players who truly understand modern development, a modern tech stack that accelerates their capabilities, and AI tools that amplify their impact further. When combined, these multipliers don't just add to your capabilities – they multiply them exponentially.
Small teams are crucial to this equation. Instagram scaled to 14 million users with just three engineers, solving technical problems that larger competitors couldn't crack. Small, focused teams of 2-4 people can move with an agility that larger teams simply can't match. This isn't about doing twice as much – it's about achieving 200 times more impact with the same number of people.
In the old world, distribution channels were our moat. But when development velocity increases by orders of magnitude, distribution alone cannot save you. Customers aren't loyal to distribution channels – they're loyal to solutions that solve their problems. This demands a fundamental shift: from being distribution-heavy but acceleration-light to becoming acceleration-heavy. The new moat isn't in controlling distribution – it's in your ability to out-accelerate the market.
Remember: we're not just competing with traditional rivals anymore. We're competing with every small team that understands these force multipliers. The future belongs not to the largest companies or those with the best distribution networks, but to those who can harness these multipliers most effectively. That's how we'll win in the AI era.
Our Path Forward
Let me paint you a picture of Valsoft X – not as a distant dream, but as our immediate future. This isn't another iteration of our business model; it's a fundamental reimagining of how we create value in the AI era.
The core of our vision starts with pairing each acquisition with an AI solution from day one. Think of Sadie and our AI pods, but systematically applied across our entire portfolio. Every company we acquire becomes a launchpad for an AI-enhanced future version of itself. We use the existing MRR from these businesses not just to maintain operations, but as rocket fuel for rapid development.
Here's where it gets powerful: these AI-enhanced solutions begin to eat our own legacy software from the inside out. Think of it as controlled disruption – we're building our own competitors, but with our existing customer base as the launchpad. Once we perfect this transformation process with our own products, we turn outward. We'll execute the same aggressive strategy I described in my thought experiment about leaving Valsoft, but with all the advantages of our existing business behind us.
This solves our organic growth problem fundamentally. Instead of trying to grow through traditional means, we're creating a mechanism for exponential growth. Each successful transformation becomes a template for the next one. Each market we capture becomes a base for capturing the next. Every acquisition isn't just a new portfolio addition – it's an opportunity to transform entire market segments.
This is Valsoft X – a company that uses AI not just as a tool but as a force multiplier. One that views every acquisition not just as a revenue stream but as a launchpad for transformation. One that doesn't just compete in markets but systematically transforms them.
Building the Right Culture
The transformation we're pursuing isn't just about technology or strategy – it's about fundamentally reimagining how we structure and empower our teams. I predicted in my first AI presentation that the future belongs to small, focused teams of two to four people. This isn't about cost savings. This is about creating force multipliers that fundamentally change what's possible.
We face a critical imbalance in our organization. We have fantastic operators who deeply understand our markets and customers. But our technical capabilities lag far behind. In a world where technology drives value creation, we can't afford this gap between our business and technical excellence.
Picture this: an exceptional HR professional paired directly with an engineer in a small team, both enabled by AI. This isn't about doing things twice as fast – it's about achieving 200 times the impact. The small team structure eliminates the bureaucracy and complexity that kills innovation. When you have too many people to manage, you create layers of process that slow everything down.
We need excellence across the board. We can't just have strong operators and weak technical teams, or excellent HR but weak finance. Every part of our organization needs to operate at the same high level, enabled by AI and modern tools.
This is why the pod model of 2-4 person teams is crucial. These aren't just small teams – they're focused units that combine business understanding with technical excellence. When you pair an A-player operator with an A-player technical person and enable them both with AI, you create something exponentially more powerful than a traditional team structure.
We are, in many ways, dinosaurs looking at the first signs of a changing climate. But unlike the dinosaurs, we have a choice. We can evolve. We can build an organization that combines the best of human capability with AI enhancement. We can create teams that move with the speed of startups while leveraging the resources of an established organization.
Conclusion: The Time for Action is Now
The future isn't coming – it's here. While we've been debating the potential impact of AI, companies like YC are already funding ventures aimed at automating entire software businesses. Their vision of running multiple AI-automated businesses with minimal human intervention isn't a distant possibility – it's happening now.
Everything I've described for Valsoft X isn't theoretical. The tools exist today. The capabilities are here. We've seen it in our own building, with our own teams, in our own experiments with AI. Every day we wait to embrace this transformation is a day we fall further behind.
Valsoft sits in a uniquely powerful position to lead this transformation. We have what emerging competitors don't: deep industry knowledge, established customer relationships, and significant resources. But these advantages are perishable. They're valuable only if we act on them now, while they still matter.
The companies that will thrive in this new era aren't the ones with the biggest teams or the most established distribution channels. They're the ones that can move fastest, adapt quickest, and deliver value most efficiently. They're the ones that understand how to harness the power of AI, modern tech stacks, and small, elite teams to create exponential rather than linear growth.
This is our moment. The tools are ready. The opportunity is clear. The path forward is visible. All that remains is for us to have the courage to take the first step. To evolve from Valsoft to Valsoft X.
The future is calling. Are we ready to answer?