As AI makes it easy to generate 'good enough' software, a functional product is no longer a moat. The new advantage is creating an experience so delightful that users prefer it over a custom-built alternative. This makes design the primary driver of value, setting premium software apart from the infinitely generated.

Unlike traditional SaaS where product-market fit meant a decade of stability, the rapid evolution of AI models makes today's PMF fleeting. Founders face the risk that their product could feel obsolete within a year, requiring constant innovation just to stay relevant in a rapidly changing market.

The pace of AI-driven innovation has accelerated so dramatically that marginal improvements are quickly rendered obsolete. Founders must pursue ideas that offer an order-of-magnitude change to their industry, as anything less will be overtaken by the next wave of technology.

According to Box CEO Aaron Levie, the stickiest SaaS products are those with strong network effects, deep integrations, and mission-critical workflows. A simple heuristic for vulnerability: if you can get the same value from a fresh install as a decade-old one, your product can be easily replaced by AI-generated software.

The novelty of new AI model capabilities is wearing off for consumers. The next competitive frontier is not about marginal gains in model performance but about creating superior products. The consensus is that current models are "good enough" for most applications, making product differentiation key.

In the age of AI, 10-15 year old SaaS companies face an existential crisis. To stay relevant, they must be willing to make radical changes to culture and product, even if it threatens existing revenue. The alternative is becoming a legacy player as nimbler startups capture the market.

The threat to established SaaS companies is not just technological but also psychological. Simply adding AI features to an existing product like Photoshop may not be enough if AI creates entirely new workflows. Survival depends on 'human agency'—bold leadership willing to cannibalize existing products and fundamentally reimagine their business for an AI-centric world.

The current market leaves no room for mediocrity. SaaS companies are either at the forefront of AI, delivering jaw-dropping value and capturing new budget, or they are being displaced. Hiding behind long-term contracts is a temporary solution, as there is no longer a middle ground.

To succeed in the AI era, SaaS companies cannot just add AI features. They must undergo a 'brutal' transformation, changing everything from their org chart and GTM strategy to their core metrics and pricing model. This is a non-negotiable, foundational shift.