AI Will Kill Enterprise SaaS?
(For Some)
AI Will Kill Enterprise SaaS (For Some)
As a product person, I’ve been closely following the evolution of AI-assisted and no-code app development. The potential is undeniable, but so are the growing pains. Here’s what I’ve learned:
AI-powered app creation is not as seamless as the hype suggests. Many tools still struggle with producing production-ready applications, requiring significant human intervention.
However, once these barriers are overcome, AI will fundamentally reshape software, potentially eliminating many smaller Enterprise SaaS companies.
The Current State of AI and No-Code Tools
Many platforms claim that AI can build software effortlessly, but my experience tells a different story. I recently tried to create a mobile app for an urban hike application using AI-powered tools like A0, Bolt, and Replit. The results? Frustrating.
A0 and Bolt don’t support Flutter, restricting app development to React Native. This limits choices for businesses that have existing Flutter-based ecosystems & limits native cross-platform capabilities.
Replit’s AI-generated code for the mobile app was unreliable and error-prone, requiring constant debugging and intervention. Instead of eliminating the need for developers, it often felt like I had an overeager assistant who needed constant supervision.
A0 & Bolt just provided me the initial screens but no additional context of how to easily operationalize the app. Replit was better at this, providing key areas where APIs were integrated with prompts to enter API keys etc.
While AI can accelerate development, it’s definitely not a replacement for skilled engineers—yet. Instead, it shifts the focus from writing code to debugging AI-generated code, sometimes increasing timelines and developer workloads rather than reducing them.
The Future: A Threat to Niche SaaS Products
Today, many SaaS businesses thrive because custom software development is expensive and time-consuming. Companies turn to niche SaaS tools for workflow automation, reporting dashboards, or lightweight CRMs rather than building their own solutions.
But what happens when AI makes custom software easy? When a business leader can describe what they need, and AI generates an application that does exactly that? The value proposition of many smaller SaaS companies disappears overnight. This is particularly true for SaaS companies whose value lies in easily replicable or commoditized data, making them more vulnerable to AI-driven automation.
Larger SaaS platforms—like Salesforce, Notion, and Airtable—will adapt by embedding AI-powered customization into their ecosystems. However, smaller SaaS providers may struggle to compete as AI-generated alternatives become widely accessible and cost-effective.
How to Stay Relevant in the AI Era
This shift aligns with some key principles from Co-Intelligence by Ethan Mollick, which offers guidance on working effectively with AI:
(thanks Dean Peters for recommending this read)
Always have AI on the table. AI is here to stay. Ignoring it means falling behind.
Be the human in the loop. AI-generated solutions still need oversight. Companies that master AI collaboration will have a competitive edge.
Treat AI like a human (give it context). Defining AI’s role—whether as a junior developer, a business strategist, or a creative partner—improves its effectiveness.
Assume this is the worst AI you’ll ever use. AI is evolving quickly. What seems unreliable today will likely become an indispensable tool in just a few years, with improved accuracy and efficiency in development workflows.
The Takeaway
Right now, AI-generated development is clunky. But once these tools improve, they will drastically reduce the need for many niche Enterprise SaaS solutions.
The winners in this transition will be those who create AI-native platforms, streamline single-shot app development, master AI guidance, and capitalize on proprietary data as a key differentiator. They will redefine software development and distribution, setting new industry standards.
For now, I’ll continue experimenting with AI-driven development—while keeping a close eye on where it’s heading.
What do you think—will AI replace niche SaaS companies?
Love reading your thoughtful articles
Love reading your thoughtful articles