Founders are no longer pitching traditional software businesses. The focus has shifted entirely to AI-native companies building 'systems of intelligence' or 'systems of action'. This reflects a market belief that existing software workflows without a deep AI moat are too easily replicated and devalued.

Hanover Park's CEO argues the era of selling software tools is ending. The next wave of successful B2B companies will be "AI native services" that use agents to deliver concrete business outcomes, fundamentally shifting the model from selling tools to selling guaranteed results.

Founders are stuck in a SaaS mindset, selling tools to existing service providers. The bigger opportunity is to build new, AI-first service companies (e.g., accounting, legal) that use AI to deliver a superior end-to-end solution directly to customers.

Pure software-as-a-service (SaaS) companies are vulnerable to being replaced by foundational AI models that can replicate their functionality. A Sequoia partner suggests the defensible model is to become a services company that uses technology as a layer, focusing on implementation, strategy, and human expertise.

Selling software tools puts companies in direct competition with ever-improving foundation models. Sequoia Capital's Julien Bek argues the defensible play is to build a "software business that masquerades as a services firm," selling completed work and capturing the larger services market.

The fear that AI will destroy all SaaS businesses is misplaced. The real threat is to companies that fail to deeply integrate AI into their products. The winning strategy is to invest in and build SaaS companies that are committed to becoming AI-native, as they will survive and thrive.

The business model is shifting from selling software to selling outcomes. Instead of creating a tool and inviting users, create pre-trained agents that perform valuable work. Then, invite companies to a workspace where this 'team' of AI employees is ready to start delivering value immediately.

The high-margin, pure Software-as-a-Service model is becoming obsolete in the AI era. Complex AI implementation requires hands-on integration, giving rise to consultative models like the "forward deployed engineer," where provider experts are embedded with clients to ensure success.

SaaS companies are being disrupted not by better tools, but by AI that delivers the outcomes customers want. The winning strategy is to shift from selling software licenses to selling a guaranteed result, becoming an 'AI-native services business.' This changes the business model from high-margin software to a hybrid with lower but still scalable margins.