When software was expensive - thin, horizontal, best-of-breed software stacks extracted rents across every business.
Now that software is cheap - value moves to vertically integrated businesses that deliver opinionated end-to-end experiences.
On 2026-07-22 on X, @naval argued that when software was expensive, thin…
Brief
Naval (X, 2026-07-22) contrasts two eras: formerly expensive, horizontal best-of-breed software stacks captured rents across industries; now commoditized, low-cost software drives value toward vertically integrated firms that bundle and opinionate end-to-end experiences, reducing the pricing power of horizontal middleware.
Why it matters
On 2026-07-22 on X, @naval argued that when software was expensive, thin, horizontal, best-of-breed stacks extracted rents across businesses.
Key details
- He claims that because software is now cheap, economic value has shifted to vertically integrated companies that provide opinionated, end-to-end experiences rather than horizontal middleware.