Navigating the AI Era: A Survival Guide for B2B SaaS Founders

Could I interest you in everything all of the time? A little bit of everything all of the time. - Bo Burnham

At the point of writing this post, two enormous AI funding rounds have just been announced: OpenAI raising $6.6b on $150bn post and AI coding startup poolside raising an (almost humble) $500m on $3bn post. Having talked to many founders over the past few months, the AI era (which we have, in my opinion, firmly and irrevocably entered) has caused a duality of feelings.

On the one hand, there is obvious optimism around the possibilities of implementing AI in products and all the commercial opportunities that come with that. On the other hand, there’s almost an overwhelming number of perspectives, being dragged in all directions. The chaotic excesses of the AI megacycle can be disorienting. Something about “everyone around you is building comically fast-growing companies with ludicrous amounts of money” can feel – for lack of a better word – eerie. 

Independent of where you fall on the techno-pessimist / optimist spectrum there are a few assumptions that are reasonable to make if you’re a founder of a B2B software company:

1. Money will continue to be poured into foundational models.
2. Competition in B2B software will only go up. Entry barriers for starting software companies have only lowered and will continue to decrease, likely exponentially so.
3. AI features & strategy will continue to make VC eyes twinkle, at least for a bit.

Now what should you make of this? Here’s an attempt at some concrete advice:

1. Don’t get distracted, embrace maximalism.

There’s a natural inclination among curious individuals to follow and explore every interesting-looking rabbit hole. The best founders adopt new technologies rapidly and wield innovation like a weapon. That said, it’s important to keep in mind that VCs are merchants of hype – selling forward the self-fulfilling prophecy of capital. Not every mega round with a shiny landing page should necessarily prompt you to re-think your next feature launch. Embrace the chaos. High volatility creates opportunities but only relentless focus and obsession will let you seize them. Your job is to be aware of what's happening at a high level (e.g. mega round for companies in your vertical) but not to get spooked and alter course without hard data. 

2. Focus on workflows

As the age-old LinkedIn sharepic adage goes: people don't buy products, they buy solutions. In the absence of AI knowledge worker totality, most use of LLMs is constrained to (albeit sometimes drastically) amplifying or improving a very narrow step in an existing workflow. As has always been the case with SaaS, the big opportunity is in making your user's lives’ 10x easier. To this extent, meeting them where they already are is easier than convincing them to do things in an entirely new way. The fundamental insight here is that all step-changes in new technology (LLMs included) eventually get boiled down and commoditized. As a B2B company, you win by surfacing the commodity at the right time, to the right person as part of the right workflow. The only way to win is by absorbing the commodity and then adding a previously unaddressed convenience layer to create a delightful product experience.

3. Know your users, because money can’t buy PMF

In the medium term, it is reasonable to assume more LLMs will move up the stack offering agentic (?) solutions for concrete problems and penetrating more and more verticals directly. There are various scary scenarios here – OpenAI white-label GPTs of their best-performing apps on the GPT store, a single AI engineer deploying your entire core product within an enterprise customer, stuff that nightmares are made of. The reality is that good businesses need to know their customers. All the money in the world can’t buy you a great understanding of what your customers need. The best way to find out is still to pick up the phone…at least until voice AI agents are good enough to do that part well.

My advice when it comes to implementing AI as a B2B SaaS Founder?

While this particular storm may be more intense, the way you weather it is the same as it always has been.

No application-level company in 2024 can afford not to have an AI strategy. In fact,it would be good practice to think through what would happen if we extrapolate maximum AI acceleration exponentially forward and what that would mean for your business. It doesn’t mean that you can’t navigate that landscape. 

The point of all the above isn’t to say close your eyes or don’t be scared. It is saying to be just scared enough to execute like a maniac but not so scared you go into shock paralysis. The most exciting time to build a company is always now.

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