Are AI agents the new SaaS?

^{A week in AI is like a year in other industries. I hope these issues become your weekly source of AI information, inspiration, and ideas. If we haven’t met before, I’m Amanda Smith. I write about AI and the fascinating folks who are building in this brave new world.}

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Anthropic is having a moment right now. Claude Code, Claude Cowork, Claude Design… This new suite of no-code tools is changing the very concept of work, in real-time. 

Up until recently, the build process for any start-up or software was the most cost intensive. SaaS companies like Adobe, Asana and Atlassian (Trello) – who recently slashed 10% of its workforce – held some of the most lucrative jobs in tech. 

But now, with AI, users can build custom software without engineering skills. I spoke to a real estate agency owner this week who said he’d be agonizing over a feature that wasn’t available in the software he used, so he built out his own workflow with Claude Code. He said it was something he’d be trying to solve for years. 

I had the same experience. Instead of using a paid portfolio builder tool, I fed my past portfolio PDF and new links to Claude Design, with a simple style prompt, and it nailed it. It was 80% there in one prompt, which is wild. 

This phenomenon is being coined the SaaS apocalypse. But is this the end of software as we know it? 

Yes, for generic horizontal SaaS but vertical SaaS is doing record numbers. As one Reddit user said: Capital and users are moving from horizontal to vertical. From generic to specialized. From ‘works for everyone’ to ‘built for exactly your industry.’ 

Another user replied: The strongest products will be tied to real-world systems, proprietary infrastructure, and outcomes… not just pixels. 

SaaS companies are sitting on years of data about customer interactions, support conversations and usage patterns, which could be an untapped edge. 

Companies like Cursor, Lovable and Gamma are all SaaS, albeit a new class of software. Cursor just hit $1 billion ARR in 24 months. Wild. 

Entrepreneur, Balaji Srinivasan, was asked if the SaaS apocalypse is real or overblown. “The thing that AI can’t do is distribution. If you have Notion, Figma and so forth, you’ve got all these people and boom, you can ship AI features to them faster. In that sense, I don’t believe in the SaaS apocalypse,” he said. 

You might still see SaaS under pressure from people who can close the interface quickly and build local versions, Balaji added. He believes Obsidian will become more of a market contender than Notion because of the local data. 

Founder and investor, Greg Isenberg, believes the startup is the agent. The SaaS is just the database. In his latest email, Isenberg wrote that the economics would change, where outcome-based pricing becomes the default. Nobody pays per seat when the ‘seat’ is an agent. You pay based on the outcome.

This is the era of no UX SaaS. The agent just runs, the human checks the results, Isenberg said. 

The code is the easy part now. The hard part is deep domain knowledge (to know what parts of a workflow can be automated) and distribution. 

Isenberg suggests picking one vertical and going really narrow. Do the manual work first so you know the load-bearing work. Map the entire workflow, then build the agent. Charge per outcome, build distribution through media, and iterate the workflow. 

“Media + agents is the new SaaS. This is why Silicon Valley is going all influencer,” he explained. 

“Your first 100 customers are sitting in the replies.”

If one of these stories stuck with you, I’d love to hear which one.

Speak soon,
Amanda

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