Episode 855 | The Eight SaaS Moats that Still Work in the Age of AI

Rob Walling (0:00)

You're listening to Startups for the Rest of Us. I'm Rob Walling. In this episode, I welcome Einar Vollset back on the show, and we record what I think might be the most important episode of the year, maybe of the past couple years. You'll notice that the runtime on this episode is longer than usual, because I just let it go. I let it take the time that it needed to take.

And this episode is a collaboration between Einar and I, where we talk through the eight SaaS motes that we believe still work in the age of AI.

As you'll hear once I bring Einar on the show, we are taking this very seriously and really trying to think about it from all the angles, and trying to take in outside information from folks other than just the ex Twitter, bootstrapper ecosystem. And as investors in hundreds of B2B SaaS companies, we have a vested interest in figuring out what will make SaaS companies defensible as AI gets better and better and takes over more and more of the software ecosystem. This episode is not an outline we put together in 30 minutes of brainstorming. Einar literally spent weeks of research doing lit review, putting thoughts together, has run it by our internal team, then ran it by me and he and I went back and forth and collaborated on it to create not only the Moats, but there's these vectors of attack that we see AI is having on SaaS companies, most of which you haven't thought of, but that we are seeing and are aware of, as well as thinking of examples of a lot of these, because that's the hard part really is not just having a concept out on its own in an academic way, but having real life examples maybe of big companies like Stripe or of small companies that you've seen on the show, like SignWell or Gymdesk, that fit into these buckets of the motes that we discuss. This episode is a combination of two microconf talks that Einar and I gave just a couple weeks ago in Iceland, and this episode is so dense in a good way. It's action-packed and information-filled that we have brought the slides from our talks, as well as producer Ron's gonna put together a detailed summary of what we talk through in this episode, and you can get access to that, plus the Q&A that happened in Iceland that we're gonna cut from the YouTube version of it, but there were, gosh, there was what, 20-something minutes of live Q&A after the talks. If you go to microconf.com/motes and enter your email, that's microconf.com/motes, and you're gonna get a ton of stuff. Again, video of the live Q&A after this concept, you'll get the slides from our talks and a summary pretty detailed of this podcast episode. I know I mentioned at the top of this episode that it might be the most important episode of this year or the past couple years, and I think that could be true. I think that is likely true, actually, in the way that it can help you as a SaaS founder think about how to shore up your business, not only to stay in business, not only to keep growing, but to have a great exit valuation if and when you decide to sell. And we thought about taking all this information and putting it, keeping it for tiny seed companies, putting it behind a paywall, or however else we could try to guard it, but realized that it will actually do so much more good if we are able to distribute it in this way for free to the community. So I hope that you listen to this episode. Gosh, maybe more than once. And try to internalize the ideas that we're presenting here. And with that, let's dive into our conversation.

Einar Vollset, welcome back to the show.

Einar Vollset (4:00)

Thanks for having me.

Rob Walling (4:01)

We are having maybe the most serious conversation on this show of the past year or two. There's a lot of episodes. Show up, answer a few listener questions. But just so folks are prepared, it's going to be obviously a longer episode. But it's really our take on the state of SaaS in the age of AI.

Einar Vollset (4:21)

Great.

Rob Walling (4:22)

And this has come about for a number of reasons. One is, as folks know, you run Discretion Capital, which is a sell-side M&A advisory for SaaS companies between 2 and 20 million.

And so you have a pretty unique viewpoint into the SaaS M&A market. You and I run Tiny Seed, 217 investments, and we are seeing things on the ground that are some are good signs and some are not good signs.