So obvious 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 AI native and still raising at unicorn valuation … 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 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
- Salesforce and Marc Benioff are all about being AI-first as well
- ZoomInfo has launched a very exciting Sales AI Co-Pilot
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.
Here’s the thing. It’s just not clear bolting on AI is accelerating anyone in classic B2B SaaS oper 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. 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
- 24% more have them on their roadmap
It’s important to have “AI Parity” now. You can’t fight it.
But just bolting on Gen AI? It’s not clear that’s disruptive in B2B. Not clear at all.
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Jason Lemkin, Khareem Sudlow
