In this podcast, Motley Fool analysts Asit Sharma, David Meier, and Tim Beyers discuss:
- Disruption stories from history.
- The three signs of disruption and why they matter now more than ever.
- Two companies that may be at serious risk for disruption now and for the long term.
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A full transcript is below.
This podcast was recorded on Feb. 23, 2026.
Tim Beyers: Is your SaaS portfolio being disrupted? We're gonna talk through the signs, and you're gonna want to pay attention. You're listening to Motley Fool Money. Welcome Fools. I'm your host, Tim Beyers, and with me are longtime Fools, Asit Sharma and David Meier. Thanks for being here, fools.
Asit Sharma: Thanks for having us, Tim.
David Meier: Thanks for having me.
Tim Beyers: Last week was pretty turbulent one. Both the S&P 500 and the tech-heavy NASDAQ ended the week up a bit. It was 1.12% for the S&P and 1.28% for the NASDAQ. But there were some sharp sell-offs in the software as a service sector, and fears of disruption are ripe. What does it look like when disruption happens? We're going to look back to look forwards here and talk about some disruption stories. I'm going to tell you two guys, that I think are instructive. These are from the past, but I think they're instructive about what's going on now. I want to talk about Siebel Systems and Apple. Audio show of hands here, Dave, Asit, do you guys remember Siebel Systems?
Asit Sharma: Vaguely. I do. Maybe there's a reason why it's so far displayed from my memory. This must have been a big disruption.
Tim Beyers: Yes, between 2003-2005, it was becoming increasingly apparent that the incumbent supplier of customer relationship management software, which was Siebel Systems, was being disrupted by Salesforce. If you don't remember, Siebel had a CRM package that you installed, you managed yourself. You would have to upgrade it yourself, and it was a big pain in the butt and Salesforce had come out. I remember this campaign at the time because I was still working in marketing and PR. But Salesforce, as part of their bid to disrupt this sector, they came out with a slogan, and it was literally a button. It was almost like a campaign button where they had software written on the campaign button and a slash through it. The whole idea was no software. You don't need software anymore. You can do everything online. What was happening, gross margin had started heading south. Net margin has also started heading south, but most damning of all was growth just went negative in four out of its last eight quarters as a public company. It just disintegrated. Now, Apple had a similar story, a little bit different. This, too, Apple was showing margin deterioration sometime before the disruption to its business. Now we're going back to, 1993, 1994, 1995, years of bad business model choices. I remember this because I had a client on the PR side who was a Mac cloner. Remember those, Apple had Mac cloners. I had a client, a Mac cloner called UMAX Computer, and margins just got obliterated by this, and it made the company look and feel too much like any other PC maker. We saw some really big declines in margins until ultimately net margin went negative. The company started losing money and actually started bleeding money up until Steve Jobs came back in 1997. Some lessons I think we can learn from this. Disruption isn't linear. It doesn't follow the same pattern in every case, but there are some signs. Persistently lower gross margin is one I think we've seen many times. Another is increasing costs to acquire new revenue. In other words, the disruptor comes in and makes you spend more to keep your customers around, and the other is reduced stickiness. The large customers tend to go away. Now, I think that was more true for Siebel than it was for Apple. Here's the build up and the payoff here, guys, given what we saw last week, there were a lot of companies that the market seems to believe are just heading for a Siebel or Apple style of disruption. I want to give you a few companies, and you tell me which are most at risk. These are companies that have paid a little bit of a price recently. Monday.com, Figma, Hubspot, Salesforce or The Trade Desk. The tickers there fools are MNDY Monday, Figma is FIG. HubSpot is HUBS, Salesforce is CRM, and The Trade Desk is TTD. Are any of those showing you a particularly concerning sign of disruption? If you want to defend any of them, I would say, go for it and Asit I'm going to start with you.
Asit Sharma: Tim, I am going to go with salesforce.com as a company that is looking seemingly vulnerable to disruption. Now, this is a business that is trying to stay very much ahead of the curve. This is a business which is very forward looking, very innovative. A couple of years ago, they decided to go all in on AI agents. I think because they understood the risk to their business as a provider of legacy CRM software and annualized recurring revenue. The run rate for their agent business is through the roof for its small base, so $1.4 billion annually. The issue with this is that salesforce.com, of course, is a pretty large company now. They're estimated to do about $41 billion in revenue this year, Tim. I'm not sure that this new revenue can catch up. The problem that Salesforce faces is that it has a commoditized business at this point in time. It's fairly easy for businesses with good engineering teams to do part of what their platform offers, so that is really fine tuned marketing in house and lead generation following up on that. That part isn't difficult. Where they're a little bit moody is that the burden of maintaining such a system in house, I think is sort of high. What we're faced with, though, is a company that, let's face it, grew up acquiring other businesses. As of now legacy business. It's projected to only grow at somewhere 8-10%, that's not enough to protect it from disruption. It needs another several percentage points to get that distance between its revenue and its cost to preserve those margins. I think those margins are going to be under attack.
Tim Beyers: I like that you called it moody. It's a moody business, but maybe not as moody. Dave, Asit is arguing here that Salesforce needs to reignite growth if it wants to avoid disruption. Who are you picking out out of this list?
David Meier: I just want to say, this is a fabulously timely question, given everything that is going on. I see the world a little differently.
Tim Beyers: Do it.
David Meier: When I look at the enterprise level of the software that many of these companies develop, there may be disruption into the future. But who on the enterprise side is really going to rip out a system that's working very well for them, that they've been willing to pay for for so long. In order to create, maintain, and then debug, innovate, they're just going to get all this for a fraction of the cost that they're paying today for somebody to do it for them. I think that a lot of this is overblown, in the very short term. Disruption is happening. Don't get me wrong.
Tim Beyers: Yeah.
David Meier: Where I would look is probably more on The Trade Desk.
Tim Beyers: Say more.
David Meier: The reason I would look there is for me, The Trade Desk is a marketplace that has a subscription model on top of it. If you were enterprising the entrepreneur and you had a technology that could bring that marketplace together maybe a little more efficiently, you could fly under the radar for a little bit, because Trade Desk is by far, a huge player in this space of using technology to bring ad buyers and ad sellers together. Maybe from a disruption standpoint, you could disrupt it without being noticed, and then next thing, you have a better mouse trap, and you're really pulling customers away from the current leader. But Trade Desk is not resting on its laurels. Let's put it that way. They're doing a lot to try to fend this off. But that's where I would see someone who was using technology to bring those buyers and sellers into a marketplace. You could fly under the radar. I don't see anybody necessarily flying under the radar on the enterprise software side. Let's put it this way, at Monday.com, who recently reported earnings. The fastest growing segment of their business or the biggest customers that they were going after. These were the customers that were buying more after they had already come into the company. They had the highest dollar based net retention levels. They have decided that their workflow management software is something that provides value to the business that they are responsible for running. There was a reporter who came out and said, hey, I've just vibe coded a Monday.com replacement. It manages my schedule. Great. That's not the only thing that Monday.com's software does. By the way, I really don't know what's behind the software that you vibe coded. Is it portable? Can it handle hundreds of thousands of calls, lots of people using it all at once. We don't know these things. It's very clear that the if you are able to think about something, you don't have to necessarily know all the intricacies of coding to get a model out there, to get a prototype of something out there. But production based software is very different than a prototype.
Tim Beyers: I think that's very clear. We're going to move on to the second segment here, but before we do, listeners may be interested to know that I ask our robot overlords, who may be party to the disruptions we're talking about, who do they think are the most disruptable? The answers were The Trade Desk, salesforce.com. I don't know what that says, but I think it's interesting. Up next, we're going to talk some mindset. What does it mean to be brave in fearful times? We're gonna talk about it. You're listening to Motley Fool Money.
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Tim Beyers: Fools, we're back. It is a weary time to be an investor, as we just talked about. We want to talk about bravery here. Asit, I'm going to start with you here because we used to do the Mindset Show. The reason I bring this up was because I think we've got some investors who may be listening to this show who feel like, this SAS sell off has got me afraid, it's got me annoyed. Maybe it's got me angry. It's screwing up with my retirement plans. All very real feelings. This is a thing that every investor deals with. I want to talk about bravery. I'm going to tee you up with this. I think there are three elements of bravery that are required for investors in individual stocks. Here's number 1, willingness to go against consensus because outperformance is never the byproduct of agreement. Number 2, willingness to be told you're wrong by market action. The SAS sell off, for example, this past week, for an extended period of time. Then number 3, willingness to not act when others are and to act when others aren't. What do you make of those, and what would you either add or replace on that list?
Asit Sharma: Well, Tim, I think the first point I would make about this is the willingness to go against consensus is something that can really serve an investor. You just have to have your own opinion about a company or a thesis or a market. To arrive at that opinion, you need to do a little bit of homework and research and you need to think some about it in a quiet corner. Just put some thought to it. We tend to get caught up in our fear emotions during times like this, and it is difficult not to make that visceral knee jerk reaction. You and I have talked about this so many times. Being able to sit down as Dave just did, walk through the thesis on The Trade Desk or as I did with the Salesforce, and decide for yourself what your perspective is, that is key. Once you do that, then it's just a little bit of turning up the bravery to go ahead and take the step. Now, willingness to be told that you're wrong by market action for an extended period of time, that's harder for me, and I'll tell you why. Markets are pretty wise on the whole. Look back at the winners over time. They build consensus because they build results year after year after year. There's only a certain amount of time you can really cling to a wrong decision, but for sure, in the short term, often, that's where the greatest returns lie. People are selling out of fear so many SAS companies last week spilling into Monday, as I looked at my screen this morning. Some of those are going to be mistakes.
I happen to think, for example, The Trade Desk has a little bit of insulation, not to rehash those arguments from a few minutes ago, but if you've got that contrary opinion, it's OK to be wrong or have the market tell you you're wrong. Just be sure of why you purchased that in the first place. The extended period of time, Tim, again, here's where we dial up the bravery. Let's go from the short term a few weeks to let's say a couple of quarters. It's been six months, nine months, five quarters. That's more than a year of time, and your thesis isn't being proven out by the market, but lo and behold, if you're correct, things do come around. This is why patience really helps the investor these longer term holding periods versus just getting in and out of positions. Then three, willingness to not act when others are and to act when others aren't, this is part of the contrarians playbook. We're not always contrarians, or I should say, we don't stay contrarians forever on a certain position or purchase or thesis. We stay contrarians for the amount of time it takes the market to come around to our view. Then we're in the consensus again. That willingness to hold back when others are selling or to take the position when all the pundits are saying, that's the wrong move. To be able to wait and then just let everyone come around, that again takes bravery. In all of these cases you've laid out, there's both an element of purposeful action and research and conviction and the other side of it, which is being a little courageous, getting that muscle up and holding fast to your beliefs.
Tim Beyers: It's not so easy. The way I've been talking about this, Dave, is when you think about how you can get yourself to act against trends in the market, and this is something that if you are going to be a long term investor, you're probably gonna make several bets that are against the trends in the market. You know what? Our brains deal with this nonsense, when everything looks against you, the brain does want to comply. Say, you win. Don't hurt me anymore. Compliance is a common approach to dealing with the fear of the unknown. But courage and bravery is the other. Talk to me a little bit about what you do to gain courage. You need it, but how do you think of speaking to an investor that really does struggle with this. What can you tell them about? Little things you could do to gain some courage?
David Meier: First of all, we all struggle with this.
Tim Beyers: Yeah.
David Meier: This is inherent in the way our brains work and the way our emotions work, so you're not alone. The second thing is to remember, and I'm pretty sure this is a Buffett quote. You are not right or wrong because the market agrees with you. You are right or wrong because your data, analysis, and logic are sound. Those two things are very different. I'm going to tell a very quick story to illustrate, hopefully, to folks out there about bravery. This is my own experience with a company called AES. The ticker symbol is AES. This is an independent power producer. Before 2000, there was a bubble in energy. Everyone was on the energy bandwagon. If you look at the energy stocks during that time period, independent energy producers like AES, their stocks were flying high. The bubble burst, and they were out of consensus. Their stocks crashed. Being in the energy business at that time, I took a look, and I'm like, hey, AES, whose stock went from, I want to say it was a peak of 90 at the time to $4 when I started looking at it. The consensus was this business has a whole lot of debt, and they are going bankrupt. Well, one of the characteristics of that debt was it was called nonrecourse debt. What that meant was the parent company was not responsible for the debt. Each individual project, so each individual power plant, that was the thing that would be affected by any issues with the debt. The idea that the whole company was going to go out of business was wrong because that meant every single project that they had ever done as one of the leading independent power producers was going to have to go bad. I bought a little at $4. Then the stock summarily got cut in half. I'm like, where have I got this wrong? Let me go back and relook at all my data and my analysis. I'm like, I don't think I'm wrong. Again, I know about this business. I know how these things work. They're still producing power. They're still producing cash flow. The market is just saying, I don't want any part of this. I bought a little more at around 275. Then two quarters later, the stock is sitting at $1. I'm like, this is ridiculous, I've seen my initial investment go down 75%, and it hurt really bad. But I summed up my bravery, I plugged my nose, and I invested a heck of a lot more around $1. Once the narrative changed because the company put out performance that said, we're still producing power. We're still generating revenue. We're not going bankrupt. In about two to three year timeframe, if I remember correctly, the stock went back up to $25. None of that was easy.
Tim Beyers: Yeah.
David Meier: But the thing that I anchored on was, you are not right or wrong because the market agrees or disagrees with you. You are right or wrong because of your data, your analysis, and the logic you provide to it.
Tim Beyers: Very wise, very foolish insights there. We're going to preview tomorrow. Up next, we're going to talk about more earnings coverage coming. You're listening to Motley Fool Money. Stay right here. Welcome back to Motley Fool Money. For Tuesday's show, Rick Munarriz steps in, and he has Jason Hall and Travis Hoium to take you through the important stories as we push even further into earning season. There are some big ones upcoming. Please stay tuned this week. We're going to have a lot of earnings coverage both on the site and on the show. But for tomorrow it will be Rick, Jason, and Travis. Tune in to listen to them, fools. Dave, Asit, thanks for the foolish wisdom today and for putting yourself on the line to make some predictions. We'll see how it turns out, but I think it's interesting that the robots roughly agreed with you. I don't know if that's just coincidence or if you planned it that way.
Asit Sharma: It could be that those are some of the more flagrant suspects. That's why.
Tim Beyers: It could be. As always, people on the program may have interest in the stocks they talk about. The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. Thank you to David Meier and Asit Sharma, to our fearless engineer, Dan Boyd, to our producer on a Chuck Balu. I am your host, Tim Beyers. We will see you again tomorrow, Fools. Thank you for tuning in. Fool on, everyone.
