Clouded Judgement 5.15.26 - The Real App Store Opportunity

Every week I’ll provide updates on the latest trends in cloud software companies. Follow along to stay up to date!

The Real App Store Opportunity

Last October I wrote a piece saying OpenAI had their “App Store” moment after they released the Apps SDK. 7 months later that prediction doesn’t look great… I don’t think we’ve seen an explosion of custom ChatGPT apps. ChatGPT hasn’t turned into the “super app” yet. Hopefully one day they will!

I think there may be a separate “app store” moment happening with Anthropic. BUT - more of a B2B app store moment than B2C apps. Over the last few months I’ve seen massive adoption of “skills” in Claude. A skill is essentially an "onboarding doc" for an AI agent - a folder of instructions (often just a markdown file) that Claude pulls in only when the task calls for it. Anyone in a company can write one in an afternoon, which is why I think the distribution dynamic looks less like a consumer app store and more like internal tooling that spreads bottoms up. At our own firm we’ve seen a proliferation of skills being created and shared with the team.

What really changed thigs for me was the /skill-creator “skill.” It’s become so easy to start building skills (maybe skills are the new name for agents??) to automate real parts of my day to day. The biggest challenge I have with building skills is a creative one. I know there are 10x more ways I can be using / building skills, but I don’t always know where to start. So I discuss with my colleagues, with other friends in similar lines of work, to try and explore how other people are leveraging skills so I can do something similar.

The “app store” moment hasn’t happened yet, but I think we’re close. Today, we can share skills within our own organization. But we can’t yet share them externally. And there’s not great approval flows for making sure a built skill follows all security / compliance protocols. Anthropic has their own set of pre-built skills (including ones from partners like Notion, Figma, Atlassian, etc), but it’s managed by them (ie isn’t a marketplace). I met with a software vendor this week who has some of their own “skills” available out of the box (the interface is their own software UI, but they still called some of the automated workflows “skills.”)

All of this to say - I think the trend here is a set of skills people can build and then publish to some sort of marketplace. I think you can kind of do this today by exporting the markdown file and publishing on GitHub, but that feels janky. What people really want is to be able to find a skill, know it’s somehow been “blessed” by Anthropic (ie put through security reviews, deployed within Claude behind their governance, etc), and quickly customize it for their own set of integrations / permissions.

There's another angle here that I think founders building AI products need to internalize. For the last decade of SaaS, "we integrate with X" was table stakes. You couldn't sell into the enterprise without a long list of logos on your integrations page. I think "we have a skill for that" is about to become the equivalent over the next 12 months. If your customer's primary surface for getting work done is Claude (or any agent), and your product can't be invoked as a skill from inside that surface, you're functionally invisible. It doesn't matter how good your product is - if the agent doesn't know to reach for you, you're not in the workflow.

Everyone today has a “blank canvas” problem. They know there’s skills they could be building, but they don’t know where to start. A marketplace like experience of skills just makes too much sense not to happen! When will we see our first venture funded “skill”??

Quarterly Reports Summary

Top 10 EV / NTM Revenue Multiples

Top 10 Weekly Share Price Movement

Update on Multiples

SaaS businesses are generally valued on a multiple of their revenue - in most cases the projected revenue for the next 12 months. Revenue multiples are a shorthand valuation framework. Given most software companies are not profitable, or not generating meaningful FCF, it’s the only metric to compare the entire industry against. Even a DCF is riddled with long term assumptions. The promise of SaaS is that growth in the early years leads to profits in the mature years. Multiples shown below are calculated by taking the Enterprise Value (market cap + debt - cash) / NTM revenue.

Overall Stats:

• Overall Median: 3.1x

• Top 5 Median: 23.4x

• 10Y: 4.5%

Bucketed by Growth. In the buckets below I consider high growth >22% projected NTM growth, mid growth 15%-22% and low growth <15%. I had to adjusted the cut off for “high growth.” If 22% feels a bit arbitrary, it’s because it is…I just picked a cutoff where there were ~10 companies that fit into the high growth bucket so the sample size was more statistically significant

• High Growth Median: 14.7x

• Mid Growth Median: 4.4x

• Low Growth Median: 2.3x

EV / NTM Rev / NTM Growth

The below chart shows the EV / NTM revenue multiple divided by NTM consensus growth expectations. So a company trading at 20x NTM revenue that is projected to grow 100% would be trading at 0.2x. The goal of this graph is to show how relatively cheap / expensive each stock is relative to its growth expectations.

EV / NTM FCF

The line chart shows the median of all companies with a FCF multiple >0x and <100x. I created this subset to show companies where FCF is a relevant valuation metric.

Companies with negative NTM FCF are not listed on the chart

Scatter Plot of EV / NTM Rev Multiple vs NTM Rev Growth

How correlated is growth to valuation multiple?

Operating Metrics

• Median NTM growth rate: 13%

• Median LTM growth rate: 15%

• Median Gross Margin: 76%

• Median Operating Margin 0%

• Median FCF Margin: 21%

• Median Net Retention: 109%

• Median CAC Payback: 33 months

• Median S&M % Revenue: 35%

• Median R&D % Revenue: 23%

• Median G&A % Revenue: 15%

Comps Output

Rule of 40 shows rev growth + FCF margin (both LTM and NTM for growth + margins). FCF calculated as Cash Flow from Operations - Capital Expenditures

GM Adjusted Payback is calculated as: (Previous Q S&M) / (Net New ARR in Q x Gross Margin) x 12. It shows the number of months it takes for a SaaS business to pay back its fully burdened CAC on a gross profit basis. Most public companies don’t report net new ARR, so I’m taking an implied ARR metric (quarterly subscription revenue x 4). Net new ARR is simply the ARR of the current quarter, minus the ARR of the previous quarter. Companies that do not disclose subscription rev have been left out of the analysis and are listed as NA.

Sources used in this post include Bloomberg, Pitchbook and company filings

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