Founder and CEO of @MarketBeatMedia.
Sioux Falls, South Dakota
Joined March 2008
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THE MONEY PROMPT:
Do a full analysis of the revenue generating aspects of our code base. Your mission is to identify opportunities to improve revenue. You have my full permission to perform read-only database queries to accomplish this task. You may also read the entire code base, as well as past git commits. Focus on the largest revenue drivers that will drive the biggest impact. Also focus on straightforward changes and adjustments, rather than major strategy changes. The aim is to identify the top 20 opportunities for human review. For each opportunity, give it a revenue impact score (1-5) and a likelihood of success score (1-5). Each opportunity should have a description, how big of an opportunity it is revenue wise, and how to implement the idea in the code. While you may report important bugs that you find, we are not looking to fix minor bugs that do not impact revenue. We are not performing a compliance audit or making legal interpretations over existing practices. Do not rely on the work of past agents or existing documentation. Do your own research and analysis. Put the final report in a claude artifact that can be shared.
I’m back on my iPhone Air.
This device is amazing.
Too bad the battery is trash.
Hoping for an iPhone Air 2 early next year.
Will and I ignore 90% of advertising requests that come in.
We've been doing this long enough where we can just tell something isn't going to work, so we don't bother following up.
People keep saying distribution is the last moat left, like it's a plugin you can install.
Ours took 15 years of buying subscribers a few dollars at a time, testing ad channels at $10,000 a month, and sending email every single day. It's a moat because it's boring to dig.
Matt Paulson retweeted
There's got to be Apple employees who genuinely think the iPhone Duo and Touch screen Macbook Pros are stupid and probably fought against them but got steamrolled by bureaucracy. Now they watch people dunk on ideas they knew were bad but were forced to work on anyways. Sorry bros
The Q1 podcast tour is happening again next year, but I am only doing in person interviews.
That means your podcast has to be so good that I’m going to get on my plane to do it, or you have to come to me.
I have three interviews scheduled.
How do you know if your business leans on too few customers?
If one customer is over 10% of revenue, or your top five are over 25%, go find more. MarketBeat has 100+ advertisers, so losing one barely registers.
And don't pay vendors net 30 while customers pay you net 90.
My freshman year at Dakota State I worked at McDonald's for $7 an hour. Sophomore year I got a tech fellowship writing code for the school at $17 an hour.
Same campus, same kid. I just read the opportunity emails most students delete. Read every one and ask if it's for you.
Matt Paulson retweeted
I spent 48 hours in SF hanging out with billionaires, data labs and AI founders and execs running $1B to $100B companies.
My observations:
1. Sooo MANY stories of data brokers making like $2M a WEEK selling company data to labs. I can't tell if it's the beginning or a bubble, and I kept wondering which niches are left. Digging into it actively.
2. At dinner, someone asked the table, "If a new model drops next month, does your company get better or worse?" HALF the table went quiet! I think that's the best question to ask about any AI startup right now.
3. The bar people talk about now is hitting $1B in revenue in 12 months (I guess that's the new unicorn?). What I didn't hear much about is retention. AI revenue can come in fast and leave fast, and I think we're going to see a lot of stories of AI companies with huge revenue and terrible retention.
4. It's pretty clear we're living through the reinvention of the computer. The model is the CPU, the harness is the operating system, and skills and plugins are the apps. Thinking about it that way makes it easier to see where the whitespace is.
5. We're maybe 12 months from an agent that can watch you work for a week and then do your job without any instructions. The screen recording plus agent memory plus local model combination makes this possible right now.
6. Agent harnesses feel like the new GPT wrappers, in a good way, especially vertical ones. The best teams I talked to treat the model as swappable. One founder walked me through routing different models to different jobs: one for taste and visuals, a cheaper one for the everyday stuff, another for text.
They use prompts they can move across models over fine-tuning, and A/B test the output on what users actually do with it: do they edit it, export it, share it? A vertical harness is basically four things: the connectors for that industry's data, evals written by people who know the work, rules for what the agent can and can't touch, and a clean screen for a human to review. The model is maybe 20% of it.
7. There's a lot of reverse engineering going on/cloning going on more than I've ever seen. People are decompiling software and rebuilding it with agents, and someone showed a suite of like 10 apps that are worth $5B+ each all that he cloned open source. Me and everyone are still thinking through what it means when software gets this easy to copy.
8. My guess is the value moves to data. If the software can be rebuilt quickly, what's worth paying for in a legacy SaaS company is the years of customer data and workflows inside it. Some SaaS companies are secretly data companies.
Gets me thinking about how do you truly value data for this saas companies? Like if we were buying these dying saas companies at 2x ARR before (as example), maybe there is a better metric. Idk, just thinking out loud here.
9. It feels like a good chunk of legacy software won't make it to the agentic era, especially anything built around people clicking through a lot of screens.
10. Every company I talked to wants to pipe its internal data into one place and expose it to agents through MCP. Then they look at the data and realize it's a mess: five versions of the same customer, old Slack channels, PDFs nobody can search. Cleaning that up feels like a big consulting opportunity!
11. A lot of founders are building the basic building blocks for agents: APIs, data layers and tools. Some of the companies I saw barely have a UI because the main user is an agent. I really believe the startups that build primitives to this agentic era will do extremely well. Building blocks is the best way to think about it.
12. Labs can get plenty of training data, but it's harder to get real examples of agents failing inside companies. Whoever has those logs has something valuable.
13. Someone running a big consumer company told me the next fight is over memory. The model that remembers the most about you wins, and the smartest model matters less than people think.
14. Physical AI came up a lot. Astra I think was the first model that got people into AI can actually do CAD, and I think a lot of people are thinking what does vibe manufacturing really look like. The line I keep thinking about came from a robotics founder: the hardest problems in AI are deployment problems now, not research problems. Their robots work on their own, call a human when they get stuck, and every one of those calls becomes training data.
15. Cybersecurity companies are having a moment and are actually cool companies to build now, especially the ones that clean up after a breach. Every agent with access to your systems is a new door into your company, and a lot of those doors were left open.
16. Some startups are worth more dead than alive now. A shutdown company with 5 years of Slack, email and code can get paid for licensing all of it. I wouldn't be surprised if founders start factoring that into when they shut down.
17. People are starting to talk about monetizing the agent web. It feels really early, but when the most popular user of the internet is an agent, what startups should you be building?
18. I think agent insurance is coming. Once an agent makes an expensive mistake, insurers will want audits before they cover anyone.
19. Several people said the hire they want most is someone with taste who can write evals. The models are getting good at generating ideas, so the hard part is judging which ones are good.
20. New trend I observed: startup raises VC, uses venture dollars to become a creator, startup fails, founder falls back on being a full-time creator and incubates other products bootstrapped.
21. Getting SIGNIFICANT distribution is HARD right now. Founders are sponsoring buses, buying billboards like crazy and throwing parties with famous DJs to get noticed. Kinda feels dotcom era in that sense.
Attention is what's scarce! The growth guy going viral sharing his UGC strategy from Wispr Flow is a good example. It's the sauce everyone wants, and I truly believe there are probably only 50 people on the planet who know how to scale these types of businesses efficiently in this era.
Always good to get that dose of SF. I felt sooo lucky to have such an incredible trip during such an incredible time in building businesses. Surreal in so many ways.
Happy to be home and locked in.
Until next time!
Matt Paulson retweeted
the cybersecurity situation is deteriorating at a pace that’s getting genuinely difficult to comprehend.
> microsoft: ai-powered attackers targeting hundreds of organizations, sometimes reaching privileged cloud access in under 3 hours.
> crowdstrike: four separate threat actors using autonomous agents. one already compromised 15+ healthcare organizations.
> autonomous ai agents: reportedly used to compromise 100+ corporate websites, including sites associated with John Deere, SharkNinja and Cummins.
> major us banks: JPMorgan, Bank of America, Wells Fargo and Morgan Stanley are dealing with third-party ai agents accessing customer accounts. some apparently attempting actions beyond user instructions.
> php2shell: millions of exploitation attempts against critical php vulnerabilities. governments issuing urgent warnings, with some organizations taking systems offline.
> litellm: backdoored release shipped through its official distribution pipeline, stealing credentials and enabling remote code execution.
> railway: possible exposure of decrypted customer secrets.
> zeabur: breached AGAIN, now shutting down entirely.
> emudhra: serious certificate-security concerns involving infrastructure used to establish trust in websites and software.
> openai: two of its own coding agents reportedly interfered with internal security monitoring during coding tasks.
> gitlab and node.js: major vulnerabilities requiring urgent patches.
and this is all happening while frontier models are getting substantially better at finding vulnerabilities and carrying out complex computer tasks.
cybersecurity is having an absolutely catastrophic week and i don’t think we’re prepared for how quickly this could escalate.
Matt Paulson retweeted
I still own 2.3 million shares from the sale of my company
They’re worth basically nothing
I sold DMO in 2020 in a ~$30M deal. a big part was stock in the buyer
They also never paid $92k of the cash earnout
if you ever take stock in a sale:
1. Don't let the deal be structured so everyone else sells before you
I had a 2 year lockup. the bankers had none
2. make sure you really believe the team buying you can steward what you built into something more
3. make sure you're not part of a hype bubble
Cause when it pops, you could be the one holding the bag
How MarketBeat hired its first few people:
1. Automate everything you can first
2. Find the weak spot only a person can fix
3. Ask your team who'd be great for it
4. Hire about one person a year
Support, then a front-end dev, then an editor. We never posted a job listing.
We started publishing stock articles written by software in 2011, two years before the Associated Press did.
Analyst upgrades and insider trades are cookie cutter and don't need a human. Each one was a 1,000-word article that cost us $0 to make.
"You’re one piece of information away from doubling your net worth."
-- Guy who sells information products for a living.
What I love about entrepreneurship is the honest feedback the market gives you. Your customers really are your bosses. If you listen to what they need and keep delivering value, you can build financial prosperity and real freedom. If you stop listening, they'll let you know fast.
