SaaS is the most profitable business model on Earth. It’s easy to understand why: build once, sell the same thing again ad infinitum, and don’t suffer any marginal costs on more sales.
I have been writing software for more than half my life. In the last year itself, I’ve talked to hundreds of founders and operators in SF, from preseed to Series E companies.
And everyone is constantly talking about the threat looming over the industry, that has changed how our entire industry thinks an operates: agentic AI a.k.a. your very own overzelous intern that always listens to you, available almost as cheaply as drinking water from a tap
This isn’t just talk – the market is pricing it in. Morgan Stanley’s SaaS basket has lagged the Nasdaq by 40 points since December. HubSpot and Klaviyo are down ~30%. Analysts are writing notes titled “No Reasons to Own” software stocks.
This is bringing an existential threat to a lot of B2B SaaS executives: How to keep asking customers for renewal, when every customer feels they can get something better built with vibe-coded AI products?
The market is reflecting our new reality (Source: Bloomberg)
Wait, can users actually vibe code a B2B SaaS?
Short answer: Not really – but that doesn’t matter in this case.
The actual problem is that customers can get something working with vibe coding. There are tens of vibe coding “internal tool” services that promise to connect to every integration in the world to pump out CRUD and workflow apps.
Whatever they build simply works. It takes some wrangling to get there (one Series C VP listed eleven different vibe coding tools they’ve tried and the pros and cons between each on a phone call once), but productivity gains are immediate.
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