Navarre: Apple is dead, SaaS is next.

Author: Mustufa Khan; Translator: Peggy, BlockBeats

Editor's Note: This article uses Navarre Lavikant's podcast comment that "pure software is not worth investing in" as a starting point to discuss the repricing of technology companies in the AI ​​era. The core of the article is not simply to criticize Apple or SaaS, but to point out a deeper change: what will truly be scarce in the future will no longer be the software itself, but distribution channels, network effects, proprietary data, hardware integration, brand communities, and vertical industry barriers. In other words, AI is making "writing software" cheaper, and is also forcing entrepreneurs to re-answer a more fundamental question: What does your company have that AI cannot replicate?

This change means a revaluation for both large companies and startups. Apple's risk is that if the interaction layer is taken over by AI agents, its long-standing reliance on the premium of software experience may be weakened; the risk for SaaS companies is that the functionality itself is becoming increasingly difficult to use as a moat.

However, the democratization of software production capabilities may also lead to a new wave of individual creators and small team companies. For homogenized software, this is a dangerous era; for founders with distribution, taste, data, and industry depth, it may also be an unprecedented window of opportunity. The following is the original text: Apple is dead; the market just hasn't had time to complete the formalities for it. This is not a sensationalist judgment, but a structural summary of the industry changes over the past six months. Navarre Lavikant's remarks on his podcast last week almost confirm this. One of the most patient investors in the tech world, and one of the most astute capital allocators of the past two decades, has given an extremely clear conclusion about the entire software industry: pure software is no longer worth investing in. For founders, the real question isn't whether you agree with this judgment, but whether you have 18 months to complete the transformation before the market fully reacts. Background: Naval founded AngelList and is an early investor in Twitter, Uber, Notion, and approximately 200 other companies that shaped the tech landscape of the past decade. He rarely makes judgments lightly, but when he does, they are often cited repeatedly for many years. Therefore, when he says "pure software is no longer worth investing in," it's not a casual comment, but a capital allocator's repricing of the industry cycle. Below is his judgment and what it means for all entrepreneurs. No one can stop Apple from structurally dying. Apple won't go bankrupt, and it won't disappear from your pocket next year. The collapse Naval speaks of isn't operational, but economic. The fundamental pillar supporting Apple's $3 trillion market capitalization is essentially only one thing: using superior software experiences to support the premium pricing of high-end hardware. Once this experiential advantage ceases to hold, Apple will become a more refined Samsung. And this is already happening. The interaction layer is being commoditized. In the next 24 months, most people will open apps differently: they will no longer actively enter individual apps, but will directly interact with AI agents, which will generate the desired interface in real time. Apple's carefully built App Store, human-computer interaction standards, design aesthetics, and ecosystem moat will quickly lose their original value once the interface itself can be generated by AI in real time on any device. How did Apple respond to this transformation? By licensing to Google and introducing Gemini. This means that the company that has always considered "controlling the user experience layer" as its core identity is outsourcing that layer to its strongest competitor. After its bet on self-developed AI failed, Apple is using external models to fill internal strategic gaps. This is almost a rapid replay of the "post-mobile Microsoft" scenario. Microsoft missed the mobile era not because it lacked resources, but because it was unwilling to build a touch-native operating system from scratch. Its dominance in the old era led it to mistakenly believe that the old paradigm would continue. By the time Microsoft truly accepted reality, Apple had already won the next decade. Today, Microsoft is still a $3 trillion company, but Windows has lost the consumer war it could have won. Apple is currently making the same mistake in the AI ​​wave: it still believes that its hardware-first DNA can carry it through the era of intelligent agents. But this path is destined to be difficult. Once the operating system and user interface are commoditized, Apple's profit margins will be compressed to the level of hardware commodities. And hardware premiums are precisely the core source of profit supporting Apple's entire business empire. At that time, structural revenue and valuation reassessment will be difficult to avoid. You can certainly continue to hold Apple stock, but don't treat it as a growth stock anymore. This most valuable hardware company in history is about to be forced to answer a brutal question: without a software moat, how much is its hardware really worth? If your moat is software, you only have 18 months. For the founders, the harder part to accept is here. Naval's statement that "pure software isn't worth investing in" is correct in itself. However, what he didn't elaborate on is: what will happen to those SaaS companies that raised funds at Series A or Series B valuations in the previous cycle? The answer is: most of them are already dead, they just haven't realized it yet. The logic isn't complicated. Your SaaS company exists because building this product was difficult in the past. You were able to raise funds because technical execution requires a complete team. Your moat—whether you like it or not—essentially comes from the difficulty of replicating what you've built. And this difficulty is collapsing. A two-person team today, using Claude Code, can replicate 80% of the core functionality of most B2B SaaS products within 90 days. This isn't a toy version, but a usable product with a reasonable architecture, basic security, and scalability. The remaining 20%—specific integrations, enterprise sales systems, and compliance processes—still exist, of course. But that's not a moat; it's more like friction costs. And with the next generation of intelligent agents iterating every quarter, these friction costs will continue to be compressed. Similar changes are already beginning. Adobe acquired Figma for $20 billion in 2022 because Figma was considered a structurally difficult-to-replicate product at the time. But now, design tools with 70% of Figma's core functionality have been created by independent developers within months. Salesforce is one of the most valuable SaaS companies in history. But AI-native CRMs, which didn't exist 18 months ago, are already eroding its market share in the mid-range market. Workday, ServiceNow, Atlassian, Asana—each is becoming a potential target for AI-native alternatives, and the teams behind these alternatives are even smaller than their own HR departments. The companies that will survive this transformation won't be those that write the best software. Because the value of software itself is approaching zero. Those that will truly survive are those that have built something AI cannot directly replicate: distribution channels, network effects, data flywheels, hardware integration, branding, community, and regulatory barriers. These are the only remaining lasting lines of defense in this new era. If your honest answer to the question "What is our moat?" is "Our product is better," then you probably only have 18 months to find a true moat. Otherwise, you may watch your valuation evaporate by 70% to 90% in your next funding round. The founders who will weather this transformation are those who take these signals seriously today. Those who choose to dismiss it as noise will likely write a layoff letter in 2027, then ask in bewilderment: Why did everything happen so fast? The question is, which one are you? Companies that win the next decade don't rely on software itself. If pure software is no longer worth investing in, then what is? Navarre offers direction in his podcast: hardware, AI models, and businesses with network effects. Expanding further, founders really need to consider the following types of moats: First, distribution channels. The truly dominant companies today are not necessarily those with the best products, but those with the most direct relationships with customers. The product is merely the vehicle for serving customers; the audience is the moat. Your email list, community, reputation, and distribution network are all assets. If you still believe that "marketing" is a stage that only begins after the product is finished, then you are already behind the times. In the future, marketing itself will be part of the product; the product will merely be a downstream conduit for traffic and relationships. Second, network effects. Businesses that can withstand the commodification of AI are those whose value comes from the users themselves, not the features themselves. Discord, Roblox, LinkedIn, and Reddit cannot be easily replicated, not because their software engineering is so complex, but because users are locked into them by other users. Will your product become more valuable as your user base grows? If the answer is yes, you have sustainability. If the product value brought by 100 users is not fundamentally different from that of 100,000 users, then you are in danger. AI can replicate functionality, but it cannot replicate a truly functioning community. Third, the data flywheel. Companies that can accumulate proprietary data through user interaction and use this data to train better models and form a feedback loop possess long-term value. Tesla's Autopilot data and Bloomberg Terminal data are essentially compounding. However, if your product is merely a UI layer wrapped around a public API, then you have no real assets. If each user interaction doesn't generate data that competitors can't obtain, your product will struggle to form a long-term competitive advantage. Fourth, hardware integration. Companies that control the physical layer have the longest defense cycle. Tesla, Anduril, SpaceX, Apple's chip business, and Boston Dynamics are typical examples. Hardware is difficult, the supply chain is difficult, manufacturing is difficult, and the complexity of the physical world cannot be directly smoothed out by AI. AI won't automatically manufacture chips, batteries, rockets, or robots. The physical world remains one of the most difficult moats to quickly replicate in the entire economy. Fifth, vertical depth. Horizontal SaaS giants have the greatest risk exposure, while truly vertical platforms deeply rooted in specific industries are actually safer. General project management tools are already very risky, but if you are deeply rooted in the construction industry, mastering approval processes, network checks, regulatory data, and industry relationships, it's a different story. In the future, it's better to be deeply involved in one industry than to create superficial tools in ten different industries. If you are currently restructuring your strategy, there is only one core question: What kind of true moat can you build in your business within the next 12 months? Not some future day, but now. Founders who complete the transformation first will inherit the survivor market after others fall. On the other side of collapse lies the greatest entrepreneurial opportunity in history. This is also the part that many founders most easily overlook when they hear "software is dead." They only see what is being destroyed, but not the opportunities being opened up. Navarre's most optimistic assessment on the podcast is that software is experiencing a renaissance of individual creators. This is not the death of software, but the democratization of software production capabilities. Similar history is not without precedent. Notch developed Minecraft single-handedly; Markus Frind single-handedly built Plenty of Fish into a company with annual profits of $10 million; when Instagram was acquired by Facebook for $1 billion, the entire company had only 13 people; when WhatsApp exited the market for $19 billion, it also had only 55 employees. These companies collectively prove one thing: a founder's vision, undiluted by organizational coordination costs, can directly lead to product implementation. However, in the past, they were more of an outlier. Independent founders could create interesting things, but struggled to overcome the scalability barrier. Once the company expanded, the team swelled, compromises began, and the vision started to be diluted. The unique element that made the product stand out often slowly disappeared in committee-style refinement. What's truly changing now is the ceiling. Naval's vision of the future is a one-person company that can operate at the speed of a 50-person team. Users report bugs within the app, and the intelligent agent automatically reviews them every 24 hours, writes fixes, submits pull requests, and runs tests; the founder only needs to review, approve, and launch. Customer support is handled by the intelligent agent, which can also write reverse code to fix underlying issues. Users vote on feature requests, the intelligent agent is responsible for building them, and the founder is responsible for quality control. There are no coordination costs, no internal politics, no diluted vision, no engineers passing the buck on key details, no designers arguing over icon placement, and no product managers turning a bold version into a safe one. The founder's vision can go directly from the brain to the deployment stage, with almost no organizational losses in between. This isn't theory; it's already happening in parts of the world. Pieter Levels, as an independent operator, has built multiple seven-figure revenue businesses. More and more independent developers are running companies that, three years ago, required Series A funding to survive. AI-native independent operators are creating new outcomes that the venture capital industry hasn't fully priced in. The next unicorn may have only one employee. The next multi-billion dollar company may have no more than ten employees. If you're a creator, operator, marketer, or founder who's been waiting for your license to enter the market, now it's here. Technological bottlenecks are disappearing, and startup costs are collapsing. What now stands between you and a real company isn't an engineering team, funding resources, or organizational size, but three questions: Do you have something worth expressing? Do you have the taste to judge good from bad? Do you have the discipline to deliver consistently? For those building homogenized software, this is the worst of times. For those building products with edge, distribution, community, data, and depth, this is the best of times. Both are true simultaneously. Which one applies to you depends on what you do in the next 18 months. The window is open, but it won't stay open forever. From here, founders generally have three paths. The first is to treat it as noise. Convince yourself that Apple is too big to fail, your SaaS is unique enough, AI programming agents are overhyped, and everything will eventually return to normal. You'll have many companions, because most founders will choose this path. And most founders will lose this cycle because of it. The second is to panic. Suddenly shorten the runway, hastily lay off employees, and blindly transform. This is the price of reacting too late. Those truly destroyed by this transformation are not necessarily those who didn't see the changes at all, but those who saw them 12 months too late and ultimately had to hastily change course without funds, time, or leverage. Thirdly, take this 18-month window seriously. Honestly examine your competitive advantages, start building distribution channels before you truly need them, find unique selling points that AI cannot replicate, and prepare for the coming world, rather than continuing to optimize the old world you hope to survive. Naval's expression is very restrained yet very clear: "Pure software is not worth investing in." This isn't the talk of someone hedging risks, but the final conclusion of someone who has spent twenty years judging what's worth investing in and now believes that most of what's being invested in is no longer worth investing in. Apple has entered a period of structural death, and most SaaS founders may be next. Those companies that ultimately survive will be those that act upon hearing this judgment before everyone else realizes it. The window is open, but it won't stay open forever. The real question is: In the next 18 months, are you building a moat that can withstand the test of time, or are you watching your existing moat crumble under the weight of reality? Most people won't survive. A few will. The difference lies in what you start doing this quarter.