AI and SaaS applications.

In a SaaS application the AI isn’t the moat. It isn’t the selling point either, I think, but you could argue that indirectly it is a selling point since VC’s love it and that’s how you could raise funding. But it most definitely is not a moat.

SaaS is not dead

A successful SaaS product still has to solve a problem. Sure, when ChatGPT first hit us a couple of years ago we didn’t really know what to do with it. We played with it, amazed by it, reasoned about it, we saw potential with it. But we really didn’t know how to monetize it yet.

Trial & Error

Now the market has seen some more or less useless AI applications come and go. Hyped up, then dead. It’s the classic trial & error progression and that’s how we learn stuff. I see more and more tech people out there talking about the SaaS industry not being dead. It’s evolving and we still have to solve problems. And there will always be new problems to solve so again, SaaS is not dead, it’s evolving.

Maturing

I think that AI should be a natural part of the product, not the headline. It should be interwoven with the application’s fabric and, quietly, at the service of the user. If it’s not adding user value, it probably should not be there. When the AI hype is fading away and things start to get stabilized again, I think SaaS companies will stop adding AI as a sensational feature (or core idea) and start making the next generation of new-tech-applications that really elevates SaaS applications and user experience. Applications that augment our capabilities.

/Glenn