Teardowns of commercial cases that did not survive contact, and a few that did. Written for people who have to make the call, not for people who write about making it.
A company that cannot express what its product is worth in the customer's own numbers will discount under pressure, lose renewals it should win, and never raise prices. This is one of the most tractable problems in the first hundred days after an acquisition.
Most software companies at this size price per seat, on a model set years ago. Buyers increasingly want to pay for consumption or for outcomes, and investors increasingly prefer it. Moving is valuable and moving carelessly transfers real risk onto the vendor.
Reported ARR routinely includes one-year cancellable contracts, implementation and services revenue, and one-off fees. Each is real revenue and none of it is recurring in the sense a multiple implies. Reconstructing the recurring base from source data is usually the single largest price mover in a software deal.
Software margins are under pressure from infrastructure and inference costs, and the pressure is uneven across customers. A healthy blended margin routinely hides accounts that lose money. Recovering it is a multi-quarter program, not a cost-cutting exercise.
Customer logos in a deck are the least verified claim in most software transactions. Some were pilots that never converted, some were single departments inside large organizations, and some are contracts that lapsed a year ago. This is testable before you have any access at all.
Companies that succeed in one market routinely assume the second one needs introductions rather than a strategy. The competitive set is different, the buying process is different, and in Europe the regulatory and sovereignty requirements are frequently the binding constraint. This plays out over quarters, which is why it belongs at board level.
Flexibility and customization are not differentiators, because every competitor claims them and none can be disproved. Stickiness is a claim about switching cost, and switching cost is measurable from outside the company. This is how to tell a real moat from a well-phrased one.
In most software companies at this size, the commercial engine is one or two people, and one of them is usually the founder. That is not a red flag by itself. What matters is whether it is repeatable without them, and what rebuilding it would cost and take.
