The SaaSpocalypse is Real

The death of SaaS has dominated tech news and discussion recently, and justifiably so, household names like Salesforce have already seen their stock price drop almost 30% this year. So is the fear of AI eating SaaS overblown? Probably not; things will change rapidly this year in the software market.

Payments companies are seeing the clearest shift, as their SaaS customer billing is quickly dropping in favor of the metered billing associated with AI. The change is so fast that Stripe paid ~$1B last month to acquire usage billing company Metronome.

People managing billion-dollar portfolios in the public markets are very nervous about anything digital, versus physical. A running joke—or reality—is that Gold is now the only safe asset after decades of tech dominance.

Last week, I hosted a dinner with some Y-Combinator founders, and most of them were using Claude to build custom software in real time based on their daily needs. At Sterling Road, we're doing the same thing: our CRM, reporting and jobs website were all 'vibe-coded' at huge price reductions compared to the market leaders.

For example: Affinity, a popular VC CRM, costs around $30k/year, per seat. In contrast, our custom CRM was built using a ~$100/year Replit plan, is tailored to our workflow and has no usage limits.

With cost and outcome differentials like these, customer expectations for both retention and new sales will be drastically higher. That doesn't mean every company will suddenly build its entire software stack but it does mean only the best and most defensible products will survive.