Understanding New Competitive Advantages in SaaS

AI has flipped the SaaS business model on its head. Because what costs nothing to build costs everything to integrate. Last weekend, I built a functional version of a Series B company's core product using AI tools. The build took 14 hours. The integration costs? Still ongoing after two weeks. This isn't unusual anymore. AI has dramatically compressed product development timelines while the complexity of fitting new tools into existing tech stacks remains unchanged. The implications for SaaS cannot be understated. When I examined where my weekend project hit roadblocks, it wasn't in creating features. It was in designing APIs, building connectors, ensuring compliance, and developing migration paths. The nature of value creation has shifted dramatically and few realize it. The majority of development hours weren't spent building core functionality, but rather on making it play nicely with everything else. This pattern repeats is a well-known problem already across the industry. Companies are discovering they can build sophisticated products and are fit for purpose, only to face the unchanged reality of enterprise integration challenges. Now this well known problem is taking a different face. The emerging reality: 1️⃣ Products that were once differentiators are becoming commodities 2️⃣ Integration capabilities now determine competitive advantage 3️⃣ Customer success teams matter more than development teams 4️⃣ Professional services revenue grows while license revenue shrinks As AI commoditizes building, integration becomes the new competitive moat. For founders, this means rethinking resource allocation. When product development costs approach zero, the relative value of integration expertise approaches infinity. The most successful SaaS companies of the coming era won't necessarily have the best products. They'll have the most seamless integrations. Technology value is fundamentally about what it connects, not what it contains. #startups #founders #growth #ai

On this Whiteboard Wednesday, I had the good fortune of spending time with the founder of a large e-com SaaS company who completely transformed my thinking about building successful software businesses. The critical insight? We're witnessing the end of the standalone tool era in SaaS. While you could previously build a substantial SaaS company with just a great tool, today's successful companies must evolve into platforms with data advantages. AI is democratizing app development at unprecedented rates. This doesn't mean companies will suddenly build their own internal tools (maintenance burden remains prohibitively high), but it does mean exponentially more competition from specialized third-party developers. More competition → price pressure → cap on growth potential for pure tools. The formula I now see with perfect clarity: → Build a platform with unique data advantages → Those advantages must accrue from your applications → Market specific apps, not the underlying platform This framework was transformative for us at FERMÀT. I was confusing everyone—customers and investors alike—by trying to merge platform and applications into a single conceptual entity. Now we position ourselves differently: we have multiple applications (landing page building, behavior insights, offer testing, virtual PDPs, custom carts) all powered by our core shopper behavior data platform. Your platform isn't what customers will talk about. They will talk about the individual applications that solve their problems. What frameworks have completely reshaped your strategic thinking recently? Sometimes the most valuable insights come from separating what you've been desperately trying to force together.

Here's what 99% of B2B SaaS companies get wrong about growth: They're still playing by 2023 rules in a 2025 game. Legacy marketing strategy: keyword research → content creation → hope for rankings. Today? AI has completely reimagined this playbook. The New B2B SaaS SEO Framework: 🎯 Intent-First Content Strategy - Use AI to analyze your customer support tickets and sales calls - Identify the actual questions prospects ask (not what you think they ask) - Create content that matches real search intent, not keyword volumes 🤖 AI-Powered Content Optimization - NLP tools to understand semantic search patterns - Predictive analytics to identify trending topics before they peak - Automated content audits that reveal optimization opportunities 📊 Technical SEO Automation - AI-driven site speed optimization - Automated schema markup for better search visibility - Real-time technical issue detection and fixes 🔗 Smart Link Building - AI identification of high-authority, relevant link opportunities - Automated outreach personalization at scale - Content gap analysis for competitive advantage The companies dominating B2B SaaS search results aren't just creating more content—they're creating smarter content that actually serves their buyer's journey. At GrackerAI, we're seeing cybersecurity companies increase organic traffic by 300%+ using AI-driven AEO strategies that traditional agencies can't replicate. Key Takeaway: Stop competing on content volume. Start competing on content intelligence. #SEO #B2BSaaS #AI #ContentStrategy #DigitalMarketing

The SaaS apocalypse is here. That’s not Linkedin hyperbole. This is based on new data from 50+ public SaaS companies. In the last 3 years, they have lost 50% of growth and CAC has grown by 60%. Here’s why the Old Unicorns are dying and what comes next: BACKGROUND The COVID era venture funding created the illusion of endless SaaS expansion. The hangover has now arrived. Thanks to research from Winning by Design and David Spitz on Top 50 public SaaS companies, growth has dropped from 36% (2021) to 16% (2024). In the same time CAC has grown by 60%. I have been warning about this moment for the last 12 months. Now I finally have data to back it... Unfortunately, I'm afraid it's only going to get worse for many vendors. But a few will find ways to rise above this noise.   WHAT SHOULD YOU DO ? If you are a SaaS entrepreneur, here are a few vectors you need to consider : 1. Differentiate or Die There will be 2x more vendors in every category within 18 months. Your product will get drowned in noise unless you know how to capture attention and differentiate. 2. A great product will no longer help you survive There’s going to be a product parity where all products in a category begin to look the same. Real differentiation will come from brand, narrative, thought leadership, GTM innovations and community. 3. Premium vendors need to prepare themselves for change TAM is more or less flat but vendor count is exploding. This means revenue/vendor will shrink and will lead to increased competition. Expect downward pricing pressures and longer sales cycles. Brand premium will have to be re-earned every quarter.  4. GTM teams will become the power centers Product and Engineering are important but in the future, without strong GTM, rising CAC will destroy companies. GTM innovations will be key to survival. 5. Venture returns and Exits will get Weird Winner takes all models are under threat and hence growth at all cost may not make sense for all portcos. We will see a wider gap in venture outcomes - fewer breakthrough successes, many more failures and success will come in the form of creative, weird and opportunistic exits. 6. Time for outcome based pricing is NOW As seat revenues drop and commoditize, there will be a landgrab around outcome based pricing and long term contracts. This is no longer optional but key to long term survival. 7. Endpoint solution will fade away Eventually no buyer or seller will be able to afford high CAC for a tool that does only one thing well. The race will switch to becoming a platform or plugging into one. New vertical stacks and platforms will emerge, spots will be scarce and early adopters will capture an outsized share of the rewards. CONCLUSION The growth engine of last decade is already broken. Rearchitect your GTM for the future or prepare for your business to get harder every quarter.

After talking to hundreds of AI companies over the past few years at Andreessen Horowitz, we've noticed a few emerging principles for building enduring enterprise AI businesses 1. Flashy demos are easy. Substantive products are hard. 💻 It used to be popular to say that all AI software was a "GPT wrapper", implying that it was trivial to build and would easily get subsumed by the model providers. We think that that couldn’t be more wrong. The best enterprise AI companies have incredible technical and product depth, much more than a simple API call could provide. 2. It takes more than ever to break out: 10x is the new 3x. 🚀 Hitting $1m ARR in 12 months used to be the north star metric for SaaS companies, but AI companies blow that out of the water. We're seeing more companies hit $2-5m ARR in their first year than ever before. This is because enterprises clearly see the value of AI and actively seek it, thus pulling forward sales cycles, and because AI contracts often replace labor instead of software and are thus larger than previous SaaS contracts were. 3. The barrier to entry has gone down: expect a flood of applications. 🌊 The cost of compute is plummeting, and agentic IDEs + text-to-app platforms are making it easier to build software than ever before. These two factors are changing the cost / effort equation for many markets and unlocking the ability to productize categories that were previously underserved by software. 4. Speed matters more than ever. 🏃 There are dozens of companies competing in every category today. To break out, speed and momentum matter more than ever. We've seen many AI companies leverage momentum to become the premier brand in their categories — often before fast followers have had a chance to adequately respond. 5. To sustain that early advantage, moats still matter. 🏰 Pure shipping velocity enables companies to break out, but companies need to sustain that advantage. AI itself is not a moat: it is a way to deliver value to customers. We think AI companies abide by the same moats as traditional enterprise software companies, namely systems of record, workflow lock-in, deep integrations, and customer relationships. Read more about these trends in enterprise AI in more detail at https://lnkd.in/gR6uqwdD

There are only 5 major drivers of competitive advantage in SaaS: 1. Speed of product innovation 2. Network effects 3. Switching costs 4. GTM innovation 5. Brand But if you’re sub $100M ARR, you probably only have one option. Brand. Why? Product innovation is VERY hard to sustain. Look at the major sales tech companies. Every product innovation present in one company is now a feature of every other company. At any given time, based on the quality of the Product or Engineering team, one or the other may be in the lead. Differentiated features become commoditized within months. Network effects are the best competitive advantage but most products don't have them.  Switching costs can create a moat in the enterprise. But getting large enterprises to truly take a bet on scaleups is easier said than done. GTM innovation seems promising, but it invites heavy competition. For example, Apollo did this incredibly well, but AI is shortening the half-life of novel GTM, and your competitors will copy you immediately. All of this puts growth stage SaaS companies in a bind. If product innovation is table stakes, you can’t get to true network effects, switching costs isn't a factor, and GTM Innovation is temporary, what do you do? You invest in Brand. This is unsatisfying to most CEOs because brand is a long-term investment with difficult attribution.  But that’s exactly why it’s DEFENSIBLE. Because it takes time. Because it’s difficult. And because it’s very hard to fake. It’s the reason folks like Adam Robinson and Alina Vandenberghe 🌶️ are leading their companies to such strong performance. You couldn’t fake being either one of them for a second. They are simply themselves. And they invest every day in amplifying both their message and their company message in a way that feels natural and authentic and creates true fans.  Brands leverage the power of trust. And in a world of digital exhaustion, trust is the most precious resource there is. DO NOT STOP INVESTING IN YOUR BRAND We are working at the speed of trust in the modern environment. Trust drives selection and preference which drives win rates and conversions. Brand is your 3 year demand gen investment. If you want to build a sustainable, durable business, people need to trust you’re going to be around. The bar has been raised today. If you are sub $100M in ARR and want to pursue a venture scale opportunity, you will need to invest in sustainable defensible competitive advantages. Product and GTM innovation is table stakes. Your long-term defensibility will come from a sustained investment in your brand.

Over the past few weeks, I’ve spoken with several entrepreneurs who are developing all-in-one, AI-powered vertical SaaS applications and making significant progress. In contrast, the previous generation of SaaS companies typically consisted of horizontal platforms that excelled in one market segment, such as marketing automation or sales engagement. These products were comprehensive, serving a wide range of industries. Over time, many of these applications moved upmarket, focusing on mid-market and enterprise clients. In addition to horizontal players, numerous vertical SaaS applications have emerged over the last two decades. These typically followed a playbook of targeting small to midsize businesses in specific segments before gradually moving upmarket. They focused on delivering the most valuable features for their target audience while avoiding overly broad functionality. With the rise of AI-powered software development, including low-code platforms and vibe coding, robust cloud computing resources, and mature open-source ecosystems, building large-scale software quickly has never been easier. As a result, entrepreneurs are now creating AI-powered vertical SaaS products that combine the functionality of multiple horizontal tools into a single, purpose-built solution for specific industries. Instead of small business owners needing separate tools for their website, social media, marketing automation, CRM, and sales engagement, a single system now provides everything they need, tailored to their vertical. These solutions are offered at a significantly lower price point with greater ease of use. Moreover, because these products are directly tied to revenue through lead generation, proposals, and new business, their ROI is clear. My recommendation to entrepreneurs is to identify a vertical they or a colleague know intimately and consider building a comprehensive application that replaces multiple existing tools for that target customer. By leveraging AI, cloud infrastructure, and open-source technologies, they can deliver a fully integrated solution at a fraction of the cost.

My mentor closed $175M in enterprise SaaS contracts. To do this, he had to beat companies like Salesforce, Adobe and Microsoft in hyper-competitive deals. Here is the #1 lesson he taught me about winning competitive deals: “You have to invest HUGE AMOUNTS of time understanding how your competitors' best reps will sell against you. Without knowing this, it’s impossible to craft a competing narrative. And you’ll never win.” This understanding allows you to go on the offensive. Let’s use my company, Champify, as an example: Here are a few things our competitors say about us: 1. “Their founders are still involved in deals” 2. “They haven’t raised as much capital” 3. “Their CS team is smaller than ours” 4.  “They don’t have X feature” Here’s how our reps flip these “criticisms” into a competitive advantage: 1. “Yes, our founders are hands-on with deals because staying close to customers helps us innovate faster.” The best enterprise CEOs in the world NEVER get out of deals. Folks like Bill McDermott and Mark Benioff still spend time with major customers and always will. 2. "Raising money isn’t the goal—delighting customers is." While we have great investors, the goal post is NOT money raised. NPS, renewals, sales efficiency, and attracting the best talent is how we measure “success.” In fact, as software continues to get cheaper, easier, and faster to build, we are not forced to artificially inflate prices, grow contracts where we shouldn’t or grow in unnatural ways. Many of these things hurt, not help, customers. 3. "We run a lean, tech-enabled CS team that delivers exceptional results." We show our G2 review, real data on response times, and customer quotes. Companies shouldn’t be rewarded for being inefficient. Utilizing AI and building systems is easier than ever before. We’ve built this into our DNA from day one. Your customers care about response times, strong relationships, strategic partners – not how many full-time employees are in a specific function. 4. “Let’s dig into exactly why you want this feature and what it will help you accomplish. What we’ve heard from your required capabilities is ABC, and I’m not seeing how feature X gets you there faster, easier, or with higher confidence.” Every company has a slightly different feature set. This is ever-changing and a constant battle. In fact, competitive differentiators have a shorter shelf life than ever before. Deeply understanding what is most important and then positioning your key value props and offerings to those required capabilities is a difficult skill to master. TAKEAWAY: As you stare down the barrel of key EOY deals, run this exercise for your competitive landscape. This will allow you to confidently craft your narrative and get on the offensive. Higher win rates are on the other side.

I got to see behind the curtain of 100s of SaaS companies. here’s what the best ones had going for them: 1️⃣ Customer Success truly is Product's responsibility first. After analyzing hundreds of retention patterns, the truth became clear: companies that treated CS as a product function (not just a post-sale service) consistently outperformed their peers. The most successful products had customer success principles built into their DNA, not bolted on afterward. 2️⃣ Build advocacy triggers into the product journey. The SaaS companies with the highest NRR didn't just deliver value - they made it unmistakably obvious when that value was delivered. Every "aha moment" was clearly marked, celebrated, and designed to be shareable. Products that made users look good in front of their teams created natural advocates. 3️⃣ Onboarding friction predicts churn with shocking accuracy. We could predict retention rates just by analyzing the first 30 days of engagement. Every additional step, confusion point, or moment of hesitation in early adoption correlated directly with eventual churn. The most successful products weren't necessarily the most feature-rich - they were the ones that delivered value with the least resistance. 4️⃣ Cross-team expansion happens through champions, not features. After analyzing hundreds of expansion patterns, we found that additional seats and modules rarely sold through traditional sales motions. Instead, they spread through internal champions who became unofficial product evangelists. The best products deliberately created and empowered these champions with resources, recognition, and tools to drive internal adoption. 5️⃣ Transparency builds confidence that drives renewals. The SaaS companies with the highest renewal rates weren't hiding behind quarterly business reviews and sanitized metrics. They provided radical transparency into product usage, upcoming roadmap, and even their own internal metrics. This transparency built trust that became the foundation for long-term retention. Working with hundreds of SaaS businesses showed me that successful products aren't just built differently - they're operated differently. Product decisions cascade into customer success outcomes, creating either virtuous or vicious cycles that ultimately determine company trajectory. What patterns have you noticed that separate successful SaaS products from the rest?

The "moat" of SaaS is now a death sentence. Data capture has been considered a SaaS moat, but that's changing rapidly. I've consulted with 10+ SMBs this month who are all facing the same issue: "How do we integrate with SaaS tools that don't offer APIs for AI automation?" The answer is increasingly becoming: "Maybe we don't." Here's what I'm seeing in real-time: AI automation is becoming business-critical. Companies aren't just experimenting anymore. They're building operational workflows that depend on AI, and they need their entire stack to play nicely. A new API hierarchy has emerged: • Tier 1: No API = vulnerability • Tier 2: One-way APIs = limited utility • Tier 3: Robust, two-way APIs = competitive advantage SaaS platforms are suddenly vulnerable... Products built in the pre-AI era with limited API access are facing an unexpected threat: Customer Migration. Switching costs matter less than future-proofing... The traditional "it's too hard to switch" defense is weakening as companies prioritize AI-readiness over short-term convenience. The opportunity gap is widening... Airtable is catching many of these customers in the SMB space, while we're seeing entirely new AI-native products emerging to fill the void. The big insight? What was once a protective moat (closed ecosystems) has transformed into a vulnerability (AI-resistance). Smart SaaS companies are racing to retrofit their platforms with AI-friendly APIs, but many won't move fast enough. For buyers, the message is clear: evaluate your SaaS stack not just for what it does today, but for how well it will integrate with the AI-automated workflows of tomorrow. For SaaS founders: your API strategy isn't just a technical decision anymore—it's existential. Is your SaaS stack AI-ready? Or are you already hitting these integration walls?