AI Agents Are Starting To Eat SaaS (Really)
A few weeks ago I read an essay titled AI Agents Are Starting To Eat SaaS. SaaS businesses have thrived by solving specific problems — outsourcing domain-specific knowledge so companies don’t have to build it themselves. A software company buys Workday instead of building HR software. A healthcare company uses Salesforce instead of maintaining a custom CRM. A piano teacher pays $9.99/month for Calendly instead of building their own booking system.
The responses to that essay were full of skepticism — people saying they haven’t noticed any real decline in SaaS adoption. That may be true for them, but the most important word in the title is Starting. It’s too early to see a trend, but I’ve already heard dozens of stories where people are building internal solutions through prompting rather than turning to a SaaS tool. I’ve done this myself quite a few times since I’d rather spend 30 minutes building something personalized to my needs than pay $4.99 every month for a generic solution.
I was wondering how long exactly it's been since I first articulated this exact scenario, and it turns out the answer is 33 months.
— Joe Fabisevich (@mergesort.me) January 10, 2026 at 11:49 AM
[image or embed]
I’ve been called the boy who cries wolf for three years, predicting that soon enough building your own app would become cheaper and easier than buying SaaS — and that custom solutions would be better because they’re tailored to your needs. The main pushback has always been that it requires skill to prompt effectively, and most people lack that know-how. But LLMs keep improving while AI tools keep getting easier to use. This is really important because these improvements compound, lowering the barrier to entry for millions of people.
As a software developer who spends his days building a link-saving app and his nights telling everyone that in the very near future people will be able to easily build their own software to solve their personal problems — this is my existential crisis coming to life.
— Joe Fabisevich (@mergesort.me) January 10, 2026 at 10:55 AM
[image or embed]
As the boy who cried wolf, I feel confident that a wolf has finally walked into a town full of software developers building SaaS products. The person who wrote the thread I’m quoting isn’t a software developer — it’s Kevin Roose, a reporter for The NY Times. He missed Pocket after it shut down, so he tried every link-saving app available. None met his needs, so over the Christmas break he built his own replacement in 12 prompts. It worked perfectly for him — so well that people begged him to open-source it. As the developer of Plinky — another link-saving app — I’m watching this moment like a dinosaur looking up at the sky wondering about the impending meteor.
View on Threads
Now I know that not everyone will build their own app. My mother-in-law certainly won’t build her own Plinky-replacement and will happily keep supporting her son-in-law’s work. But for companies like Squarespace, reporters vibe-coding their own websites in just a few hours rather than paying $200/year ought to be a red-alert moment. This won’t affect every SaaS product — enterprises rely on SaaS tools for stability and dependability that you may not want to in-source — but AI will drastically chip away at many businesses.
I’ve written several posts about how on-demand software is already here and that people are already capable of building their own solutions even if not everyone knows it yet. More and more people are catching on, and tools like Claude Code are evolving into new modalities like Claude Cowork that let any knowledge worker access the power developers have had for most of 2025.
The changes from this shift will be drastic and will disrupt many professions and industries. How this plays out deserves deeper exploration, but one thing is clear: it will upend many SaaS businesses. It’s no longer a question of if, but when. Especially for companies that don’t adapt to this new reality.