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AI Will Kill 90% of SaaS Companies

·8 min read
George Pu
George Pu$10M+ Portfolio

27 · Toronto · Building businesses to own for 30+ years

AI Will Kill 90% of SaaS Companies

Looked at 100 SaaS tools I used in 2022.

Can replace 87 of them with AI + 30 minutes.

The SaaS bloodbath is coming.

Tool Audit Methodology

How I did this analysis:

Step 1: Complete SaaS Inventory Exported all subscriptions from credit cards and bank statements for 2022. Found 127 SaaS tools across personal and business accounts.

Step 2: Usage Classification

  • Active: Used weekly or more
  • Occasional: Used monthly
  • Zombie: Paying but not using
  • Essential: Business-critical

Result: 100 active + occasional tools. 27 zombie subscriptions canceled immediately.

Step 3: AI Replacement Test For each tool, I asked: "Can I achieve the same outcome using Claude, ChatGPT, or other AI tools with ≤30 minutes of setup?"

Step 4: Replacement Implementation Actually replaced the tools for 30 days to validate the hypothesis. Not theoretical—real usage.

The shocking result: 87 out of 100 tools were replaceable with minimal effort.

The Replacement Categories

Category 1: Writing and Content (23 tools → 1 AI tool)

Tools I used to pay for:

  • Grammarly ($144/year) → Claude proofreads better
  • Jasper AI ($588/year) → ChatGPT writes better content
  • Copy.ai ($228/year) → Claude handles all copywriting
  • Hemingway Editor ($240/year) → Claude analyzes readability
  • CoSchedule Headline Analyzer ($180/year) → Claude generates better headlines
  • Buffer ($144/year) → Claude writes and schedules posts
  • Later ($300/year) → Claude plans content calendars
  • Canva Pro ($120/year) → Claude + simple tools create better graphics

Total annual cost: $1,944 AI replacement cost: $240/year (Claude Pro + ChatGPT Plus) Savings: $1,704/year (87% reduction)

Quality comparison: AI output is consistently better. More personalized, faster iteration, better understanding of brand voice.

Category 2: Research and Analysis (19 tools → AI + basic tools)

Replaced tools:

  • SEMrush ($1,200/year) → Perplexity + Claude analysis
  • Ahrefs ($1,188/year) → AI competitive research
  • SimilarWeb ($2,400/year) → Claude market analysis
  • BuzzSumo ($948/year) → AI content trend analysis
  • Typeform ($468/year) → Claude survey design + Google Forms
  • SurveyMonkey ($384/year) → Same replacement
  • Hotjar ($390/year) → Claude user behavior analysis from support tickets
  • Google Analytics ($0) → Still use, but Claude analyzes the data better

Total annual cost: $6,978 AI replacement cost: $240/year Savings: $6,738/year (97% reduction)

The insight: Most research tools just aggregate and present data. AI does the aggregation better and provides deeper analysis.

Category 3: Customer Support and Communication (18 tools → AI workflows)

Replaced tools:

  • Intercom ($3,600/year) → Claude-powered chatbot + email
  • Zendesk ($1,800/year) → Claude drafts responses, human approves
  • Calendly ($96/year) → Claude + Google Calendar integration
  • Acuity Scheduling ($168/year) → Same replacement
  • Loom ($96/year) → Claude scripts + simple screen recording
  • Drift ($2,400/year) → Claude conversation flows
  • HelpScout ($1,200/year) → Claude knowledge base + email
  • Freshdesk ($900/year) → Claude support automation

Total annual cost: $10,260 AI replacement cost: $240/year + human time Savings: $10,020/year (98% reduction)

Quality impact: Customer satisfaction actually improved. AI responses are more consistent, available 24/7, and don't have bad days.

Category 4: Marketing and Sales (15 tools → AI + simple platforms)

Replaced tools:

  • HubSpot Marketing ($3,600/year) → Claude + basic CRM
  • Mailchimp ($348/year) → Claude + ConvertKit
  • ActiveCampaign ($1,740/year) → Claude automation + simple email tool
  • Leadpages ($588/year) → Claude + basic website builder
  • OptinMonster ($228/year) → Claude + simple popup tools
  • Mixpanel ($240/year) → Claude analysis of basic analytics
  • Segment ($1,200/year) → Claude + direct integrations

Total annual cost: $7,944 AI replacement cost: $500/year (AI + basic tools) Savings: $7,444/year (94% reduction)

The pattern: Marketing tools mostly add complexity to simple tasks. AI cuts through the complexity.

Category 5: Project Management and Productivity (12 tools → AI + basic systems)

Replaced tools:

  • Asana ($1,200/year) → Claude + simple task tracking
  • Monday.com ($1,140/year) → Claude project planning + spreadsheets
  • Slack ($1,080/year) → Email + Claude meeting summaries
  • Notion ($120/year) → Claude + basic note-taking
  • Airtable ($240/year) → Claude + Google Sheets
  • Zapier ($588/year) → Claude + Make (much cheaper)
  • IFTTT ($36/year) → Claude automation logic

Total annual cost: $4,404 AI replacement cost: $300/year Savings: $4,104/year (93% reduction)

Productivity impact: Actually got more productive. Less time managing tools, more time creating value.

What Survives the AI Wave

The 13 tools I couldn't replace:

1. Core Infrastructure (4 tools)

  • Stripe (payments) → AI can't process credit cards
  • AWS (hosting) → AI needs servers to run on
  • Cloudflare (CDN) → Physics still matters for global distribution
  • GitHub (code repository) → AI generates code but needs version control
  • DocuSign → Legal signatures require human verification
  • QuickBooks → Tax compliance needs human oversight
  • G Suite → Email infrastructure with compliance features

3. Deep Technical Tools (3 tools)

  • Cursor → AI coding assistant (AI helping AI)
  • Linear → Issue tracking with developer workflow integration
  • PostHog → Product analytics with real-time data processing

4. Physical World Interfaces (3 tools)

  • Shopify → E-commerce with payment processing and fulfillment
  • Cal.com → Calendar coordination with multiple humans
  • Zoom → Real-time video communication

The pattern: Survive if you handle money, legal compliance, real-time coordination, or deep technical workflows.

The SaaS Bloodbath Timeline

2024: Early Disruption (Already Happening)

Obvious targets getting hit first:

  • Content writing tools (Jasper, Copy.ai, Writesonic)
  • Basic research tools (keyword research, competitor analysis)
  • Simple automation tools (basic Zapier workflows)
  • Template-based design tools (Canva competitors)

Evidence: Revenue decline reports, layoffs, pivots to "AI-enhanced" offerings.

2025: Mass Market Disruption

Mid-tier SaaS getting replaced:

  • Customer support platforms (Intercom, Zendesk)
  • Marketing automation (HubSpot, Mailchimp)
  • Project management (Asana, Monday.com)
  • Survey and form tools (Typeform, SurveyMonkey)

Signs to watch: Massive price cuts, desperate feature additions, acquisition rumors.

2026: Enterprise Disruption

Even complex tools becoming vulnerable:

  • CRM systems (Salesforce features)
  • Analytics platforms (Google Analytics replacements)
  • HR and recruiting tools (applicant tracking, onboarding)
  • Financial planning and analysis tools

The prediction: 90% of SaaS companies will be dead, acquired for pennies, or dramatically shrunk by end of 2026.

How to SaaS-Proof Your Business

If you're building SaaS, here's how to survive:

Strategy 1: Go Deeper Into Compliance and Regulation

Build tools that require human oversight, legal compliance, or regulatory approval.

Examples:

  • Financial services with banking regulations
  • Healthcare with HIPAA compliance
  • Government contracts with security clearances
  • Legal tech with attorney oversight requirements

Why it works: AI can help but can't replace human accountability for regulated decisions.

Strategy 2: Focus on Real-Time Coordination

Build tools that coordinate multiple humans in real-time with high stakes.

Examples:

  • Emergency response coordination
  • Live event management
  • Supply chain crisis management
  • Real-time financial trading platforms

Why it works: Human judgment still required for high-stakes, time-sensitive coordination.

Strategy 3: Integrate with Physical World

Build software that controls or monitors physical assets.

Examples:

  • Manufacturing equipment control
  • IoT device management
  • Logistics and fulfillment
  • Physical security systems

Why it works: AI can optimize but physical world requires human oversight.

Strategy 4: Become an AI Platform

Build tools that help others use AI more effectively.

Examples:

  • AI model training platforms
  • AI workflow orchestration
  • AI output quality control
  • AI integration management

Why it works: If you can't beat AI, help others use AI better.

Strategy 5: Human-AI Hybrid Models

Build tools where AI does 80% of work but humans handle edge cases.

Examples:

  • Legal document review (AI analysis + lawyer approval)
  • Medical diagnosis assistance (AI suggestions + doctor decisions)
  • Investment research (AI analysis + human judgment)
  • Content moderation (AI filtering + human review)

Why it works: Combines AI efficiency with human accountability.

Opportunities in the Disruption

Where to invest or build during the SaaS collapse:

Opportunity 1: AI Integration Services

Help traditional companies replace their SaaS stack with AI workflows.

Market size: Every company using 50+ SaaS tools needs this transition. Revenue model: Implementation services + ongoing optimization Timeline: High demand starting 2024

Opportunity 2: AI-Resistant SaaS Consolidation

Acquire struggling SaaS companies at low valuations, integrate AI to reduce costs.

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Strategy: Buy for 10-20% of previous valuation, cut 80% of costs with AI Target companies: Mid-market SaaS with good customer base but high operational costs Exit: Higher margins, same revenue, much more profitable

Opportunity 3: Human-in-the-Loop Platforms

Build platforms that orchestrate AI + human workflows for compliance-heavy industries.

Examples:

  • AI + lawyer for contract review
  • AI + accountant for tax preparation
  • AI + doctor for medical analysis
  • AI + engineer for safety-critical systems

Opportunity 4: Anti-AI Positioning

Target customers who specifically want human-only services.

Market segments:

  • High-net-worth individuals who value human attention
  • Regulated industries with AI restrictions
  • Companies with AI skepticism or bad AI experiences
  • Premium brands that want human craftsmanship

Opportunity 5: AI Infrastructure Tools

Build picks and shovels for the AI economy.

Examples:

  • AI model monitoring and management
  • AI workflow orchestration platforms
  • AI output quality assurance tools
  • AI cost optimization services

My Personal SaaS Purge Results

Financial impact of replacing 87 tools:

Before (2022 annual SaaS costs): $31,526 After (2024 AI + basic tools): $3,240 Annual savings: $28,286 Cost reduction: 90%

Quality impact:

Better outcomes: 67 of 87 tools (77%)

  • Writing, research, analysis, customer support significantly improved

Same outcomes: 15 of 87 tools (17%)

  • Project management, basic automation roughly equivalent

Worse outcomes: 5 of 87 tools (6%)

  • Some design tools and complex integrations temporarily disrupted

Time impact:

  • Setup time: ~40 hours over 6 months
  • Daily efficiency: +2 hours/day (less tool switching, AI handles mundane tasks)
  • ROI on time investment: ~300%

The bottom line: Massive cost savings, better quality, higher productivity.

Industry-Specific Predictions

Marketing SaaS: 95% extinction rate

Most marketing tools are just data aggregation + basic analysis. AI does both better.

Survivors: Tools with unique data sources or real-time advertising integration.

Customer Support SaaS: 80% extinction rate

AI chatbots are already better than most human support. Integration with business systems is the only moat.

Survivors: Tools with deep CRM integration or industry-specific compliance requirements.

Analytics SaaS: 85% extinction rate

AI can analyze any dataset better than pre-built dashboard tools.

Survivors: Real-time data processing platforms and industry-specific regulatory reporting.

Content Creation SaaS: 98% extinction rate

General AI tools dominate all content creation categories.

Survivors: Tools with proprietary data sources or industry-specific templates.

Project Management SaaS: 70% extinction rate

AI can handle most coordination and planning tasks.

Survivors: Tools that integrate deeply with development workflows or compliance processes.

The Contrarian Take

What everyone believes: "AI will enhance SaaS tools, not replace them."

What I believe: "AI will completely eliminate the need for most SaaS categories."

The evidence:

Enhancement approach (what most SaaS companies are doing):

  • Add AI features to existing tools
  • Charge premium for "AI-enhanced" versions
  • Maintain existing complex workflows with AI assistance

Replacement approach (what actually works):

  • Skip the SaaS tool entirely
  • Use general AI for specific outcomes
  • Simpler workflows with better results

Why enhancement fails: Adding AI to bloated software doesn't solve the fundamental problem that the software is unnecessary.

Why replacement works: AI eliminates the underlying need for category-specific tools.

What This Means for Different People

If you work at a SaaS company:

Start learning AI skills now. Your job may not exist in 2 years. Consider transitioning to:

  • AI implementation services
  • Human-AI hybrid roles
  • Industries AI can't automate (regulated, physical, high-touch)

If you're building a SaaS company:

Stop building features that AI can replicate. Focus on:

  • Regulatory compliance requirements
  • Real-time human coordination
  • Physical world integration
  • Deep technical workflows

If you're using lots of SaaS tools:

Audit your stack quarterly. Every tool you're paying for might have an AI replacement.

If you're an investor:

Be very careful about SaaS investments. Ask specific questions about AI replacement risk.

For customers:

Don't fall for "AI-enhanced" marketing. Often you can skip the tool entirely and use AI directly.

Action Steps

This week:

  • List all SaaS tools you're paying for
  • Pick the 3 most expensive and test AI replacements
  • Calculate potential annual savings from AI substitution

This month:

  • Implement AI replacements for 5-10 obvious tools
  • Document workflows that work better with AI
  • Cancel subscriptions for successfully replaced tools

This quarter:

  • Complete full SaaS stack audit and replacement plan
  • Train team on AI workflows for replaced tools
  • Reinvest savings into AI infrastructure or team development

This year:

  • Achieve 70%+ reduction in SaaS costs through AI replacement
  • Build competitive advantage through AI-first workflows
  • Position business as AI-enhanced rather than SaaS-dependent

The Uncomfortable Truth

The SaaS industry is built on solving problems that no longer exist.

Most SaaS tools were created to handle tasks that AI now does better, faster, and cheaper.

The "AI-enhanced SaaS" approach is like adding internet features to fax machines.

General intelligence beats specific software for most business tasks.

90% of current SaaS companies are walking dead. They just don't know it yet.

The companies that survive will be the 10% that solve problems AI genuinely can't handle.

Everyone else is building features that ChatGPT can replicate with a better interface.

The SaaS bloodbath isn't coming. It's already here.

We just haven't admitted it yet.