In 1975, intangible assets made up 17% of the value of S&P 500 companies. Things you could touch — factories, equipment, inventory — accounted for the rest. By 2025, that number had completely inverted. Intangible assets now represent 92% of S&P 500 market value. Tangible assets? 8%.

For the last fifty years, the story of business value has been a story of intellectual capital eating everything. Patents, software, proprietary processes, brand, data. If you've been anywhere near a boardroom or an investment conversation, you know this. It's not news.

So why am I bringing this up? A huge chunk of what we've traditionally called "intellectual assets" just got commoditised overnight.

AI has collapsed the cost of building software so dramatically that what used to take a funded team eighteen months now takes a motivated founder a weekend. I'm not exaggerating. I literally just did this during my own build week. The code, the platform, the proprietary system your dev team has been quietly proud of for years. It's replicable — right now. Quickly, and cheaply.

So if 92% of company value sits in intangible assets, and a meaningful portion of those intangible assets just became trivially easy to replicate, where does that leave you?

It leaves you needing a different moat.

In investment circles, the word everyone's using is distribution. Net revenue retention. Expansion revenue. Share of wallet. The unsexy, relationship-heavy, trust-built-over-years stuff that no AI can generate over a long weekend.

This is where incumbent business owners have an advantage they probably haven't priced in yet. You already have the customers. You already have the trust. You've spent years — maybe decades — building something that a well-funded startup with brilliant AI tools still can't replicate: a base of people who know you, rely on you, and would find it painful to leave.

The founders I work with who are building genuinely valuable companies right now aren't the ones obsessing over product features. They're the ones deepening customer relationships. Making themselves indispensable. Growing wallet share within their existing base rather than chasing new logos.

When a buyer looks at your business today, the IP that used to justify a premium multiple is worth less every quarter. What's probably worth more? Provable, sticky, expanding customer revenue that can't be cloned.

Your moat moved. If you're thinking about exit value — and you should be, whether you're selling next year or in ten — make sure your strategy has moved with it.

Cheers,
Josh