🤖 SaaS gets replaced by MaaS — Models as a Service

“The first is that I think we're going to replace SaaS with what I call MAS, which is Models as a Service. And so a lot of what software will be, particularly in the enterprise, will get replaced with a single-use model that allows you to solve a function. So these chat examples are one, and you can name a bunch of SaaS companies that were purveyors of SaaS that will get replaced by essentially GPT-3 or some other language model.”

“fundamentally every business model can and will need to be rewritten that's dependent on the historical, on the legacy of kind of information retrieval as the core of what computing is used to do.”

“Any middleman business right now that doesn't have its own competitive mode can be competed against because now you can take all of those input costs that go into human capital.”

“I also don't think that you're not going to need to hire engineers because Copilot is going to do it for you. I think what Copilot will do is make your typical engineer more productive. They had some graphs around how Copilot reduced coding time by 50%.”

“If you take a workflow management tool for things like design and imagery and you reduce it by an order of 90%, it's like what is that app experience worth?”

“So I think it's just a matter of time until we start to cannibalize these extremely expensive, ossified large organizations that have relied on a very complicated go-to-market and sales and marketing motion. I don't think you need it anymore in a world of agents and auto GPTs. And I think that to me is quite interesting because A, it creates an obvious set of public company shorts.”

“but it may be that you don't even need startups for a lot of the stuff anymore. You don't even need teams and you don't even need companies to generate and render software to do stuff for you anymore.”

“And I think we're still a ways away from the, you know, human being completely out of the loop. I think right now, I see it mostly as a force for good, as opposed to something that's creating a ton of dislocation.”

“I think there's going to be SaaS software products that were just good before, but now will actually be great because the incorporation of APIs from, you know, AI foundation models will just turbocharge the capabilities.”

“So even if you set out a team and said, just copy exactly what Figma has, with a copilot enabling 50 engineers, that's like 500 engineers cranking on something, I would be surprised if they couldn't just replicate the product end-to-end.”

“So the idea that software businesses generate long-term profits is so far unfortunately been a fallacy. So that chart, I think will stay exactly the same way it is. I think the bloom is off the road.”

“And not all those companies are losing money. A growing number of them are making money. I just think that's like a sweeping overgeneralization. So I still think software businesses are some of the best businesses.”