Is There a Moat for SaaS Anymore?
I have a sliver of antipathy for AI. We simple SaaS entrepreneurs, as your local economist would say, are getting creatively destroyed (maybe) by AI. But what are we to do? Creative destruction = progress, yada, yada, yada, economist stuff. Some economist said something smart about how we shouldn't shy away from this process. Hold on, I'll find the quote:
"There is a crucial distinction between using the political process to build a safety net for those harmed by creative destruction and using the political process to stop that creative destruction in the first place." [1]
The most we should do is give aid to those who are jarred by the sudden transition. But what comes of us mere mortal SaaS entrepreneurs when an AI can clone any SaaS product overnight?
Well, we actually have a primeval analogy from the blockchain days that may predict how this will go. If you were familiar with blockchain and Bitcoin, you may remember DeFi (decentralized finance). Software engineers were building DaPPs (decentralized applications) to replace the traditional financial system. For example: Uniswap, PancakeSwap, Curve, and other DaPPs.
You may also remember that immediately after any new DaPP was released, 10 others just like it would appear essentially overnight. Developers would fork codebases of successful working projects, slap up a new lightweight UI, and try to get in on the gold rush. I did this myself, and built a DEX with a few friends (decentralized exchange). But I digress.
The point is, developers created hundreds of clones of the same projects. However, even though there were hundreds of projects that did the exact same thing, only a few won out in each category. The winners were always the DaPPs with more trust. The trust could come from an individual celebrity, such as Andre Cronje, as the face of a DaPP, a famous VC, or an established business name. It was a matter of just earning trust or being the first mover. All the tools were essentially the exact same.
Back to AI, this may play out similarly for AI consumer and enterprise apps. Note that I am not referring to apps that have data or IP moats. They will maintain a moat undisturbed by AI. Going forward, I am referring to the generic software apps. The apps that will win will be those with a human face, an established brand name, domain expertise, or a personality that people can trust and confide in. That will be the only moat as prices fall to zero across the board for pure software products. Prices will all go to zero across every SaaS vertical, and no one will give a shit about your tech stack or UI because they will be exactly the same as all the others, as long as I trust your brand.
References
"Naked Economics: Undressing the Dismal Science," Wikipedia, Sep. 15, 2002. Accessed: Jan. 21, 2026. https://en.wikipedia.org/wiki/Naked_Economics