So obviously AI is a generational change in software. Where it will exactly all go we can’t 100% predict.
But there’s a general sense of the Haves and Have Nots. That the Open AIs, Microsofts and Databricks “get it”, that Nvidia is the fuel, that all the hot start-ups are Gen AI native and still raising at unicorn valuations … and that many SaaS leaders are sort of being left in the dust.
Maybe. One thing just to be aware of is every SaaS and Cloud leader is “AI-ifying” their products:
- Zendesk and Intercom are all-in on AI, even as 100s of start-ups are building AI chatbots
- ServiceNow attributes a huge amount of its growth to AI-driven workflows
- Asana is all-in on AI, even as growth slows to single digits
- Salesforce and Marc Benioff are all about being AI-first as well, even as growth there also slows to single digits
- ZoomInfo has launched a very exciting Sales AI Co-Pilot
- Brex and Ramp and everyone in that space has “AI powered spend” now
To quote Marc Benioff in their latest quarterly call:
Now, we’re working with thousands of customers to power generative AI use cases with our Einstein Copilot, our prompt builder, our Einstein Studio, all of which went live in the first quarter. And we’ve closed hundreds of copilot deals since this incredible technology has gone GA. And in just the last few months, we’re seeing Einstein Copilot develop higher levels of capability. We are absolutely delighted and cannot be more excited about the success that we’re seeing with our customers with this great new capability.
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Here’s the thing. It’s just not clear bolting on AI is accelerating anyone in classic B2B SaaS per se. Salesforce, Asana, and ZoomInfo are all-in here, but by the numbers at least — it hasn’t accelerated their growth at all. All 3 are now growing less than 10% a year despite investing massively in upgrading their products with AI.
What’s my point?
Maybe the “AI Washing” may fool a VC or two. But if AI doesn’t radically accelerate your revenue growth, then it’s just, at best, achieving market parity. It may be critical to winning deals. You gotta see how it can add real value, and just go do it and add it. But it may not be an accelerant.
Another way to look at this is from recent data from Emergence Capital: 60% of VC-backed SaaS companies already have released GenAI Features. And 24% more have them on their roadmap.
It’s important to have “AI Parity” now. You can’t fight it. That’s a fight you will lose.
But just bolting on Gen AI per se? It’s not clear that’s disruptive in B2B. Not clear at all. You have to go even further to break out here. Yes, I know that’s hard.
And we’ll be doing a 2 day SaaStr.ai Summit at SaaStr Annual this year! Sep 10-12! See everyone there!
