The quiet death of small software.
Independent software didn’t lose on product. It lost to a playbook, the same one that emptied out main-street pharmacies, taxi fleets, and local news: subsidize, absorb, strip, extract. Deep wallets don’t have to out-build you. They only have to outlast you.
01The playbook. Every time.
Four moves, run in order. Swap “software” for retail, rideshare, or groceries and the script doesn’t change.
Undercut
Sell below cost, bundle for free, or give it away. Loss is the weapon. The balance sheet absorbs what the small shop can’t.
Weapon: loss leaderAbsorb
Buy whatever survives the price war. Founders sell tired, cheap, and out of options, often at 3–5× earnings.
Weapon: acquisitionStrip
Sunset the product, keep the engineers, the data, and the patents. The “acqui-hire” leaves customers holding nothing.
Weapon: shutdownExtract
With alternatives gone, raise prices, cut support, and coast. Nobody left to switch to. Nobody left to compete with.
Weapon: monopoly rent02Case files.
Beloved, profitable, growing, and killed anyway. Success was not a defense.
Wunderlist
13 million users, a billion tasks, Apple’s App of the Year pedigree. Bought for a reported nine figures, milked for features, then retired.
Absorbed into a bundleDark Sky
The best weather app on the market. Android version axed within days; rival apps cut off from its data; iOS app gone by 2023.
Competition, deletedSkype
The dominant name in internet calling. A decade of neglect, redesigns, and bundling later, it was quietly switched off.
Starved, then sunset03The math behind it.
Roll-ups buy small companies cheap and sell the pile dear. The spread is the whole business model. The product is incidental.
04You’ve seen this before.
Different decade, different storefront, same ending. Concentration isn’t a software problem. Software is just the latest address.
Local bookstore→ one everything storeTaxi fleet→ two appsCorner pharmacy→ three chainsLocal newsroom→ two ad platformsIndie software→ the portfolio
Independent software didn’t die. It was converted.
Into acqui-hired talent, portfolio line items, and sunset products whose best features live on inside someone else’s bundle. The alternative isn’t nostalgia. It’s ownership: tools you run, on your infrastructure, that nobody can shut down out from under you.
None of this is an argument against selling a company. It’s an argument against a market where selling is the only way to survive.
This is why the shop exists.
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