2025 Will Be The Year of AI Parity in SaaS

So the other day at a board meeting on one of my fastest growing investments, at almost $100m ARR, said what I’ve been tweeting and thinking for quite a while:

In B2B SaaS, there will be AI Parity in 2025. At least in many cases, in many categories and segments.

Let’s take a look at the so far brief history of AI in most B2B apps and categories:

• In 2023, only a few SaaS vendors truly added AI to their products.
• In 2024, everyone has added and is continuing to add AI, and learning, and iterating.  And as they do — they are of course also watching their competitors.  And of course, copying and iterating on what is working for them.  Quickly now.
• In 2025, everyone in B2B SaaS at least will essentially have the same AI features.  Implemented differently, for sure.  But the same basic checklist on their pricing and product pages.
• Will customers and prospects be able to tell the difference?  Are you sure?

So we’re excited!  In partnership with SF Customer Success Meet-Up, we’re bringing together 200+ of the top Chief Customer Officers, Chief Experience Officers, VPs of Customer Success for the first CCO Summit at SaaStr Annual, Sep 12 in SF Bay!

This edition of the SaaStr Daily is sponsored by Prismatic

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I get it and even had some folks I’ve worked with do this a bit. It can sort of work. But — usually not forever.   

A few learnings:

#1. If you really can hit your number in 10-15 hours a week in Job No. 1, don’t assume you can in Job No. 2.

There’s an inherent instability there.

#2. If Job No. 2 is harder, it can be extremely distracting. This can also in the end make Job No. 1 harder.

I see this again and again. Job #2 ends up taking up some much mindshare, even though it pays less than Job #1. So both suffer. Especially Job #1.

#3. Folks will eventually find out you are working 2 jobs at the same time.  And they’re never happy about it. 

Just assume they do and if you don’t disclose it, at least prepare for it.  I find most folks working a second (or third) job hide it, at least in part.  They claim they are “consulting” or “advising” for example, when it’s really a lot more.

If your boss and/or CEO at Job #1 really believes in you and is counting on you, they’ll be let down when they find out you aren’t as committed as they’d thought. Even if in your mind, of course you can do 2 jobs at the same time “just a well”.

So a lot of good stuff has happened in SaaS recently.  Many some of the first good news in a stretch. OneStream had an epic SaaS IPO at $500m ARR, growing 34%. Microsoft has epic growth across its Cloud products, and even LinkedIn saw growth accelerate to 10%+.

Overall Cloud spending has bounced back off lows for sure.

And many VCs on X and otherwise are pushing a narrative venture has rebounded and implicit in that, things are improving. That is clearly true in some aspect. VCs are minting AI unicorns at a strong clip, and investing in AI at as fast a clip as they can.

But the reality is a bit more nuanced for enterprise software. Yes, AI has fueled Nvidia and Google Cloud and Microsoft and AWS to massive growth, and growth that has accelerated the past few quarters. But — the first half of the year didn’t really get that much easier in enterprise software at least.  Not yet at the classic application level, overall. Not overall.

Sapphire Ventures, a leading growth-stage VC fund, has some good data.

 I think 3 things matter most:

1. Ability to Ship a Great Sellable Product to Market and get it up to $1-$2m in ARR. However it gets done.

Build a team. Code it yourself. Outsource it in part. I don’t really care. There are many paths great teams use to get here. To get to Initial Traction when others quit after they ship a nice product, but with insufficient customers and revenue.

2. Ability to Attract Talent to Scale the Business and Executive the Vision. 

Even if you launch a great product, get to $1m-$2m-$3m in ARR, if you can’t bring in a great VP, Sales; a great VP, Marketing; a great VP Client Success, etc. … you’ll fall apart around $4-$5m in ARR.

3. Ability to Execute and React and Reposition in a Changing Market. 

We’re seeing many founders stumble here these days, when times are a bit tougher and when AI is disrupting many markets. The reality is many entrepreneurs don’t want to change when the market changes. Many mentally quit, or do a “tilt”, and call it a day. In SaaS, you’re going to have to tilt in some fashion multiple times. To go upmarket, or downmarket. To add a sales team from a freemium model. To built integrations and functionality very different than you planned in order to catch and pass the competition. Your SaaS product and team will look very different in 3-7 years than it does on Day 1.

If you don’t have these 3 in SaaS as well, you won’t be a big success.

If you don’t have 1, 2 and 3 in you (and most of us don’t have all 3), either don’t do it, or bring in a CEO who can do it for you.

How do you leverage your customer success team to drive revenue growth? Hook’s Head of Customer, Natasha Evans, took the stage at SaaStr Europa to discuss the three things leaders should focus on to fuel revenue growth.

• How do you create a predictable, repeatable renewal engine that provides a good jumping-off point for growth?
• How do you align your teams and resources in the right places and focus on the right customers to drive growth?
• How do you make your customers really successful and show them you’ve made them successful?

When you find the answer to these questions, you can expand an existing customer base and create cool data-driven case studies to help your sales team bring in net business. If those are your three objectives, how do you achieve them?

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