SaaS is the most profitable business model on Earth.1 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) Whenever I bring a new friend to the Salesforce Park, they are in absolute awe. And, the meme remains true that no one even knows what Salesforce does. Whatever they’re doing, they’re clearly earning enough revenue to purchase multiple blocks in SF. ↩

Hacker News is a community-driven platform for sharing and discussing technology news, startups, and programming-related topics. Through user submissions and comments, Hacker News offers insights into emerging technology trends, industry developments, and entrepreneurial ventures. Readers can participate in discussions, share their insights, and stay informed about the latest advancements in technology and innovation.

Hacker News

B2B SaaS companies face an existential threat as AI-powered "vibe coding" tools enable customers to build custom solutions themselves, leading to increased churn and pressure on renewals. Morgan Stanley's SaaS basket has lagged the Nasdaq by 40 points since December, with major players down ~30%. To survive, SaaS companies must become systems of record, emphasize security and compliance advantages over DIY tools, and adapt by becoming platforms that let customers build on top of them rather than forcing workflow changes. The shift is from "use our product" to "build on our platform" - companies that enable customization and flexibility will retain customers who now expect unprecedented levels of personalization.

AI is Killing B2B SaaS

The relation between vibe coding and B2B SaaS sales