Rob Walling on the "demand side" threat to SaaS: will your customer still exist at all? The activity can explode while the businesses that used to perform it, and the software sold to them, disappear.
…it's not going away but it is being dramatically impacted right exactly so attack number six is that the model itself like the llms the foundational models basically absorb your product they kind of turn you into an obsolete wrapper it's not going to happen to everyone but we've seen it already it
…seed where someone really smart had gone along and they like fine-tuned their own model and it was like perfect for this it was like state of the art and then like i think chat gpt released a new version it was like oh out of the box zero shot it does a better job it's like well then you're screwed
yeah we've seen a handful of companies within our portfolio experience this so now let's look at demand side and these are the ones there were a couple on the supply side that were surprising to me but the demand side was the one that i hadn't thought of so there's four here right so attack number seven is will your customer still exist at all and And the idea of, let's say there's an agency out there that used to either translate words, text, audio, or they would transcribe words, text, audio. So since AI has come out, the number of words translated and transcribed in this world have, what do we 10X, 50X, whatever. I transcribe everything now because we can, and it's really good. The agency revenue for those businesses is effectively going to zero. If it's not going to zero, it's going to a tenth of what it used to be because everybody knows we can just use AI to do it. So the activity itself, the volume of transcription and translation has gone up. But if your customers, if you were building software for translation agencies, transcription agencies, you're done. Like there's no market there anymore.
Yeah. I mean, this sort of reminds me of my favorite conspiracy theory that dentistry is basically just a fraud. They fixed it in the 1970s and then they decided, you know what, we can't get all these dentists unemployed, so we're not going to distribute the solution. But it's a similar thing. Like…
Yep. And that, I mean, that leads us into the next attack, which is like, there's two that are very similar, but this one is, are your seats going away? Meaning, like Zendesk is a great example of this, right? If you're charging per seat for customer support software, you used to have six, 10, 15…
This is sort of kind of the problem with like, and HubSpot has other problems too, but HubSpot's a similar thing, right? Like it used to be per seat for human writers to write things and SEO optimize and all this stuff. And now it's like, it just, no, like the thing is AI slop. You just generate…