SaaS valuations dropped. The narrative is simple: AI lets anyone build anything, so why pay for software? They’re calling it the SaaSpocalypse.
I think part of it makes sense. But a big part of it doesn’t.
You don’t buy code, you buy decisions
When you buy a piece of software you’re not just buying the code. You’re buying the decisions that shaped that code. What to build, what not to build, how to model the domain, which tradeoffs to make. Those decisions were valuable before AI and they are still valuable today.
This is why I think we’re entering the era of product managers. They are the ones making those decisions. And those decisions require deep domain knowledge. Gaining that domain knowledge is not trivial.
The Fusion test
Let me make this concrete. I do 3D design for 3D printing. It’s a hobby, not my life’s work. I use Autodesk Fusion.
Should I vibe code my own 3D design tool instead?
Vibe coding something equivalent would cost far more in my time and token spend than the Fusion subscription. But cost isn’t even the main problem. The main problem is that I don’t know the domain.
Fusion has a specific set of tools for creating 3D designs. It starts with parameterized 2D sketches, from which you build parameterized 3D shapes. Choosing the right set of primitives to manipulate 3D geometry inside a computer — flexible enough to be useful, constrained enough to be learnable — is not trivial. It probably took the industry years of trial and error to get here. I remember the primitive AutoCAD of the 90s. We came a long way. I would have to replicate that trial and error, and that is not cheap.
Technically, I could ask an AI to clone Fusion. But that is only possible because Fusion exists. You could argue that’s fine, it exists today. But next year, Fusion will have evolved. Without Fusion pushing the domain forward, there is nothing to clone.
And no matter how good I am at building Fusion with AI, the people at Autodesk would be better at it. They have the same AI tools, but more domain knowledge.
This generalizes
Pick any domain and you’ll find the same thing. I wouldn’t want to vibe code my accountancy software, or my email client, or my calendar. Don’t believe me? Think about how you would represent recurring calendar entries where each recurrence can be individually rescheduled. This is not a trivial problem.
For some tools, the domain is trivial, and the code was the moat. That moat is gone. The drop in valuation for those companies makes sense. But when the moat is decisions, taste, or domain knowledge, it’s still there.
The real SaaSpocalypse
The real SaaSpocalypse is not customers vibe coding their own tools instead of buying them. It’s the new startup that vibe codes a competitor.
The real danger to Autodesk is not me building my own Fusion. It’s someone who dedicates their life to 3D design building a competitor with AI.
That newcomer would have an AI-friendly codebase from day one. If they invest in keeping it that way, they would add features much faster than Autodesk can on top of decades of tech debt.
The real SaaSpocalypse is that you can now catch up to and surpass incumbents with less effort, fewer people, less investment. And the incumbents, to fight that off, will need to rebuild their internals to be AI-friendly. At some point — as crazy as it sounds — it might be faster to start from scratch than to evolve an old, tech-debt-laden codebase.
Buy vs. build still applies
At work we recently needed a tool. It was going to cost us tens of thousands of dollars. An engineer proposed we vibe code it instead. I seriously considered it. We understand this domain much better than I understand 3D design, and for internal tools you can move fast when security constraints are lighter.
But it would have taken us 2 to 3 weeks. And during those weeks we would not have been developing our core product. Our unique differentiator is our own product, not a tool we can buy and use off the shelf. Our competitors can buy that same tool and have it running in hours. We shouldn’t spend weeks to get there. Focusing on our core product was the right call.