I first met Ben Brostoff at the Planet MicroCap Conference in Toronto last October.
Ben Brostoff is a software engineer and author of the Stock Talk Newsletter Substack. Our Skull Session conversation circled back to one idea: Using what you’ve learned in your everyday life to uncover edges before others.
The Peter Lynch parallels just keep popping up in these Skull Sessions ( like in my recent chats with Cyclop SpaceTech and Aurelion Research).
Speaking of Peter Lynch, I just republished key points from a vintage master class by Peter Lynch I found on Youtube. You can read it on the Microcap Investing Cliff Notes Substack. I had previously published it on GeoInvesting several years ago.
Anyways, I didn’t know my conversation with Ben was going to lead into a chat about software stocks, but when he brought up his software background, I thought it would be a great idea to get his take on what’s going on with the recent correction in software stocks.
The pullback is based on fear that AI is going to commoditize and reduce the total addressable market for some companies.
That discussion addressed how changes in software pricing, usage-based models, and automation may affect long-term margins and competitive positioning.
Interestingly, the conversation led me to revisit a software company I had bought in 2019 that turned into a 500% multibagger. I sold most of it, but kept a small portion since I really like the company and management’s capital allocation policies throughout time.
I am so glad I talked to Ben, bringing this stock back in focus, helping me to see that the company should actually benefit from AI. So, I decided to write about the company again. If you’re curious, you read the update here and see why I added to the Microcap Quality Index (MSMqi).
This is just one example of why I am loving these Skull Sessions and so appreciative that investors and experts like Ben take the time to chat with me.
I’m confident that the insights from my conversation with Ben will help us to become more informed investors on the software vs. AI topic and sharpen our overall investment process.
A Little More About Ben
Ben spent years in enterprise software at Klaviyo (email marketing), building billing systems. That exposure gives him a unique vantage point… he can see how pricing and product decisions translate into revenue and cash flow before it ever shows up on a balance sheet. Today, when he studies microcaps, that experience lets him assess business risk beyond the reported numbers and spot opportunities investors might overlook.
Software vs. AI
Ben explained that the software shakeup is not just AI hype. Traditional seat-based pricing models are under pressure. Tools like Claude and GitHub Copilot are leveling the playing field for small teams, which raises questions for others like DocuSign, and even giants like Salesforce. The irony? Small, agile companies may benefit most from the AI productivity boost, while the big names are stuck wrestling with bloated cost structures, inflexible pricing and shrinking total addressable markets.
Ben isn’t writing off software. He’s still looking for hidden opportunities, particularly in cybersecurity, where AI agents are creating entirely new product categories.
Companies like Cloudflare, which even showed up in Claude’s source code, are on his radar.
A Look Into Ben’s Research Process
On the idea sourcing side, Ben blends Peter Lynch-style observation with boots-on-the-ground networking and studying a company’s capital structure. He doesn’t shy away from preferred stocks or corporate bonds, especially when equity valuations make the risk/reward unattractive. He’ll even invest in municipal debt.
And yes, he’s still looking at microcaps. One name he’s excited about now: Cizzle Brands Corporation (OTCQB:CZZLF) (NEO:CZZL), a Canadian sports drink company aiming to rival BioSteel.
They just acquired a bottling plant that Ben feels could generate >C$20M in EBITDA if management’s estimates hold. It’s early, risky, and a messy capital-structure play, but Ben’s pitch was intriguing.
The lessons from Ben’s approach are simple: you can use your experience to creates an investment edge, patience and diligence protect your sleep, and opportunities show up in unexpected places. And I bet we could all benefit from some less stock induced sleepless nights!
Enjoy!
