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.
AI 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?
And 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.
The market is reflecting our new reality (Source: Bloomberg)
The relation between vibe coding and B2B SaaS sales
The new problem for B2B SaaS is that with AI, 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.
And vibe coding is fun. You feel like a mad wizard using the right incantation to get this magical new silicon intelligence to do exactly what you want.
What they don’t know, though, is that a poorly architected system will fail, eventually. As every senior programmer (eventually) understands, our job is complex because we have to understand the relationships in the real world, the processes involved, and the workflows needed, and representing it in a robust way to create a stable system. AI can’t do that.
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