The Future of SaaS in the Age of AI

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1:21In a world of generic AI, don't sound like everyone else. With Grammarly, you never will. Download Grammarly for free at Grammarly.com. That's Grammarly.com. The Databricks CEO has just said that SaaS isn't dead, but AI will soon make it irrelevant. Today we're going to talk all about how software as a service is being completely changed with AI and how it may actually grow the whole business itself, software as a service. but we're going to get all into that before we do jayden why don't you tell them about our school community yeah so something that i'm super excited about is that jamie and i have just launched a ai vibe coding unit on the school community if you haven't been a member in the past this is like absolutely incredible jamie and i are both vibe coding every single day i have multiple complete products that i've built with it and i'll also have a bunch of uh old businesses that i'm completely redesigning or revamping with lovable basically i'm not a developer in any way shape or form but I've built full on software products and I've redesigned full entire websites and software stacks using Levable and I just chat with it like ChatGPT.

2:27So we have tips and tricks on how we've done a bunch of clever things. If you're not a developer, how to do that. If you want to go check it out along with dozens of other topics on how to grow and scale your business with AI tools, go check out the AI Hustle school community. It's only$19 a month, guys. And this is something that I think I would easily, if I was just selling a course, to be able to sell for like 10 grand. So go check it out. We'd love to have you as a member of the community. And yeah, let's get into what Databricks is talking about. So I love this kind of quote about AI soon becoming irrelevant.

3:00And I actually have perhaps a contrarian take on all of this. Before we get into that, I want to just like shout out a couple of the numbers going on with Databricks, because this is a company that has really been leveraging everything in AI. They just announced that they have hit$5.4 billion in revenue run rate. They're growing 65 % year over year. More than 1.4 billion of that is from their AI products. So like Databricks is not something that I think a lot of consumers have heard of because they're just, you know, they don't like, there's no Chad Chupiti Databricks competitor that everyone's used to using.

3:33But this is basically one of the backbones that is powering all of the AI embedded into a lot of the companies that you see and use today. So Databricks is really crushing it. And I'm blown away by the revenue right now. But what I think everybody is talking about right now is what their CEO, Ali Ghosi, was talking about when he was kind of sharing a lot of these numbers. And he said that he wanted to share those because there's a lot of people talking about how AI is going to kill SaaS in business. He said, quote, everybody's like, oh, it's SaaS. What's going to happen to all of these companies?

4:08What's AI going to do with all of these companies? For us, it's just increasing the usage. And I think this is a really good point. I think a lot of people say like, oh, so there's actually a funny tweet that I'll share by a VC. She said, I love how everyone is saying SaaS is dead like you're going to get a Fortune 500 to ditch Salesforce for CRM by coded by a 13 year old. And I think like it's actually really true, right? Like I remember when I first tried lovable and I was like, oh my gosh, like I went and cloned Spotify for creators and built an entire podcast distribution company. And I was like, OK, like software is dead.

4:44Like, like those companies are toast. And then I think I very, and I did that in like a day and I was like, okay, it's like so over. And then I think I very quickly realized that, um, what it built for me was not perfect. It had a lot of bugs. A lot of things were broken. And I didn't even understand the fundamental architecture of how the heck a podcast distribution company was supposed to work. Like RRS fees, I don't know how RRS fees really work. Um, and so I had to go and spend about two and a half weeks learning, watching YouTube videos, figuring stuff out, talking with it, spending a lot of money talking to, I am so sorry and deeply apologize to all of the customer support technical team at a lot of different podcast distribution companies that I link with because I harassed their teams and they helped out a ton.

5:29At the end of the day, to be honest, I did get the product built and it works phenomenally. And I was able to replace a team of four people that used to run a whole podcast network for me. It's all done by this new software that I built. And so at the end of the day, I did figure it out. But I think in the process, I'm like, okay, it's a little bit more advanced than you think. It is a little bit more work. Are we at the point where you could just tell AI to clone a software and like replace Salesforce or HubSpot? No, I don't think so. And I do have a caveat to that. But anyways, I do think this is a good point that, you know, when everyone says software is dead, I don't think people like Databricks or a lot of these big companies have to worry that they're going to get, you know, this, these massive organizations are going to get replaced by people that are going to go vibe code.

6:12Cause like these infrastructures are very complex. You don't even know half the stuff that has to go into them. Um, a lot of it's just custom built. So anyways, I don't, I don't think SAS is dead is what I'm saying. No, I think if anything, AI is going to help increase the functionality and, you know, make these, these companies more valuable because they're going to have more tools to kind of what you alluded to in a way, replace some of the employees or, or, or work that is being done that isn't necessary anymore, such as like an analyst of some kind, you know, why is, I'm trying to think of what in the article they use, but like, you know, why are we, why is our power consumption 30 % more on Tuesdays, you know, and it can look through the data and figure out maybe what's going on.

6:56You know, I think, I think it could definitely make these companies more valuable to corporations. 100%. I will say there was a very good counterpoint on X. Someone posted, they said, Salesforce is hot garbage and easily replaced by anything a 13-year-old can come up with. I love all the Salesforce haters. But I think, yeah, at the end of the day, what I do think is possible is, I think it's very possible and very, like everybody should be using AI tools like Lovable or Base44 or like all of these other, you know, Replit or like there's tons of these AI vibe coding tools, even my own platform, AIbox.ai to build tools.

7:40You should be using all of these tools to replace expensive things inside of your organization, expensive SaaS subscriptions. You should like, I don't think we should expect these to all become products because maybe they're not like good enough or secure enough, or you You don't have all of the like the back end nailed down enough to to turn it into a product. Right. So the 13 year old, you know, everyone makes fun of him like, oh, this 13 year old can't vibe code Salesforce competitor and replace Salesforce as a product. No. But if he's working inside of an organization and the organization doesn't really care about how the back end is structured or how, you know, how scalable this is to to roll it out to, you know, thousands or millions of organizations like that doesn't really matter for a lot of people.

8:23I think you 100 % like an individual company, I think could go look at Salesforce and maybe you only need 20 % of the features that are in Salesforce. I think there's this 2080 rule with a lot of software where I only need like 20 % of the features in Slack. And there's like all these crazy integrations and things you can do. And I just don't need any of them. But when or Notion is a great example. Shots fired at Notion. This is the most complex, complicated tool in the world. I used it briefly at AI Box and we got away from it because it's just too complex and complicated. So sorry, Notion. But and we only needed like 20 % of the features.

8:59They could do like everything under the sun, which is great. But we only needed 20 % of the features. So what does that mean to me? Go build a software. Go build your own in-house tool that just has the 20 % of basic features that Notion has. You don't have to build backends that scale. You don't have to do any of this craziness because it's just for your company. And so any costs that get passed to you, you don't have to calculate them. For example, any of these tools where you're building an AI tool or you're building like a platform and it's got an AI feature. Well, if you're scaling this out as a product that has to roll to a lot of people, you have to see what the AI usage is.

9:28You have to meter the AI usage for every different individual user because you can't have them like, you know, running up a million dollar open AI token credit bill that you now have to pay for. So you have to measure and track all that stuff. But if it's in your own internal company and it's just your own internal usage, then it doesn't really matter. You just need that AI usage. And so you just use it. But so that is my only caveat to all of this. You know, like Salesforce isn't going to get replaced by a 13-year-old vibe coder. In an individual personal company, I believe, yes, that and many things can be replaced.

10:00And I actually have a friend that he was spending$60 ,000 a month on HubSpot. And he was about to renew, but, you know, he didn't need every feature under the sun for HubSpot. And so he just got his, like, CTO for their company. he's like bro just spend the next three weeks and just build us a crm for exactly what we need and they did it and they cut off hubspot 60 grand a year that he is now saving for that so could he take that product he made and roll it out to like everyone in the world's a product probably not i mean maybe eventually he did have a developer like help do it but like they did it in three weeks with lovable come on 60 grand a year i think a lot of people should do that and not a lot of people should turn that into an actual product that is for sale.

10:41Not that you can't, but anyways, that's my spiel on the whole topic. Another reason you should become knowledgeable in all these tools and know how to use them because you yourself could become one of these AI consultants walking into companies and charging thousands of dollars to save them tens of thousands. So it's really valuable stuff and it's interesting. I think there's going to be a whole new industry of people who are able to consult and help businesses use AI in the most cost-effective way possible. Pick me, Jamie. I have one last rant. Can I please have the microphone one more? I'm so sorry, everyone, for all my SaaS rants today.

11:19Okay, there's one more quote in a TechCrunch article about all of this Databricks stuff, and I just have to get on a soapbox for like two seconds. So the CEO of Databricks is saying that the threat to SaaS businesses is that people no longer spend their careers becoming masters at a particular product. This is his pitch. And I think there's some truth to this. I also already shared my opinions on some other things that are probably contrary to what he believes. But he said, you know, you might become a master of Salesforce or ServiceNow or SAP. And once the interface is just language, the products become invisible like plumbing.

11:53So he has a good point, which is that you could spend your whole career and like you're like a SAP expert and you're SAP certified, blah, blah, blah. You're really good at that really complex software. At some point, they're just gonna have a chat bar on the side where anybody can go in and say, hey, I need you to like set up my billing. I need you to set up my, you know, whatever. And it will build everything out for you and you don't have to become an expert on the software. And so that is where he sees disruption. I actually see disruption on both ends of this, if I'm being honest. I already gave you my spiel on that.

12:22But as far as how that goes, I think either ServiceNow, SAP, and Salesforce are going to be forced to implement AI chat sidebars so people don't have to learn their complex user interfaces. Or you're going to do what I do, which is that I have the Claude Chrome extension, the Claude Code Chrome extension. And literally, it's just a sidebar that any website I'm on, any software I'm on, I talk to it. I'm like, hey, go do this for me. And it will just complete. It'll take over my screen. I have a separate monitor on the side. And it runs things for me. There's going to be a lot of tools like that.

12:54but I don't ever want to have to learn Salesforce, ServiceNow or SAP's interface. And I personally believe all of those companies absolutely deserve to be disrupted. SAP, I have an absolute target on your back. I recently did, like you guys are going to get a rant right now, but I recently did consulting for a company, a very, very big company, one of the biggest book publishers in the world. Okay. I did consulting for them on some AI stuff and they have SAP, a company owned by SAP running their like payment processing. They're like, sweet, we'll get your invoice process. Just like go fill out your profile on our thing.

13:32And I'm like, really, is that necessary? Can I just send you an invoice like everyone else in the world? They're like, no, you got to do this. Okay, guys, this was two months ago. I have yet to get paid by this company because SAP's software hellscape is so insane. I've completed profiles and rechecks and submitted documents. And they're like, you need a letter from your bank to prove that your bank account is this. And I submitted it and they're like, oh, but the letter from your bank has your name on it, not your business's name. And I'm like, yes, it does. It's just on a different part of the anyways, it has been in like absolute insanity.

14:06And all of this has been enabled by SAP. They have a specific payment provider. But anyways, SAP, you deserve to be disrupted if you don't have an AI chat bar, because I have it literally isn't worth the money. I literally was I was telling my wife the other day I'm like I'm just not gonna get paid by this company like I don't really care about the money and then I'm like on principle I'm like no I gave them some really really valuable advice like they're gonna pay me for it so anyways I'll let you guys know if I ever get paid um through this stupid SAP portal but a lot of this legacy software isn't updating if they don't stick with AI times they will be disrupted and I think they deserve it for my own personal pain all right guys rant is over I'm so sorry to subject you all to that I think software is going to change fundamentally and I'm here for it.

14:49Thank you so much for tuning into the podcast. If you enjoyed this episode and if these rants weren't too painful for you to listen to, please go leave a rating and review over on Apple or Spotify. I appreciate them a ton. Jamie and I both read them. We eat popcorn after the end of every episode and read all of the reviews that have come in. We appreciate the feedback and yeah, we love it. But I hope you guys all have a great rest of your day. We'll catch you in the next episode. My name is Mackenzie, and I started a GoFundMe for the adoptive mother of a nonverbal autistic child. The mother had lost her job because she wasn't able to find adequate care for this autistic child.

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