The Wall Street Journal put out an excellent article on Saturday morning entitled Here’s Where AI Is Tearing Through Corporate America. The crux of the article is that AI will not replace enterprise SaaS, and actually “plenty of incumbents are likely to survive and even thrive as corporate America embraces the wave, they say, particularly those able to adjust their business models to meet the moment….And software purveyors are likely to incorporate every new AI advance into their own products, making them that much more compelling.”
The point about existing SaaS companies incorporating AI within their own products is a good one. Literally every SaaS company is working on an AI offering or configuring their product roadmap to allow for one. Within our own portfolio, of 16 live companies, one has an agentic product in market (soci.com) and nearly all others intend to release agentic products this year. So if you’re SaaS, you’ve either got an AI product ready or are coming to market with one.
But let’s say you don’t. Let’s say you’re a SaaS company that just can’t figure out a way to make AI part of your offering because it simply doesn’t make sense. You may be in the best position of all. Assuming you don’t have a blindspot, there may not be a place for AI inside of your SaaS offering, which also means you’re AI resistant. In other words, if you’ve got a wonderful SaaS product with great metrics, but can’t figure out a way to incorporate AI, it’s likely that other competitors or newbies can’t either. AI therefore won’t be a threat to you, and you don’t have to interrupt the roadmap to add an AI feature. That’s a fine place to be, and we want to invest in companies like that.
Our recommendation to companies of this ilk, which are AI-resistant but also don’t have a place for AI in their offerings, is to just keep doing what you’re doing. Don’t come up with some feature that has an AI wrapper that is really just a SaaS offering. Don’t change your URL from “.com” to “.ai”, or some other slight of hand. Don’t rush to become AI-first when there is no problem that AI can solve for your customer. Keep your head down, keep building value for the customer, and understand that the market will at some point reward AI resistance as much as AI-first. Blossom Street certainly will.
Thank you for your readership. See more blogs and SaaS data at blossomstreetventures.com. Email the author at sammy@blossomstreetventures.com.
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