Key insights
- The author argues that established enterprise SaaS companies will maintain dominance over startups due to the trust factor. 'Vibe-coding' startups may lack the reliability, security, and validity required by large enterprises, making incumbents with carefully written code more valuable. This perspective suggests a potential drag on valuations for new SaaS entrants relying heavily on AI-assisted coding.
Future startups will practically all be vibe-coded via Claude, Cursor etc. That's where the foundations are. And that's great, they will get to MVP fast, they will churn out new features quickly.
However, the devil is in the details. They miss out on the Trust component. If I'm operating a billion dollar conglomerate, do I try the cheaper flashy competitor or the long-standing incumbent but pricier. I lean towards the incumbent, because I expect.
a) Reliability.
b) Security.
c) Validity.
With vibecoding, all of the above become very dubious. Am I sure this vibecoded startup has the foundations setup for these vulnerabilities? Can I really trust all my company workflows, secrets and data with these new startups? Vibecoding carries a hefty tag, it does not have the precision of every carefully typed out line of code. The developers now are lazier, they have to ship fast, because every other competitor ships fast - and with shipping fast, vulnerabilities lay undetected.
If the future is all vibecoded, then the existing SaaS businesses with handwritten code become infinitely more valuable, as they will have that care and precision built in with every step. They will have the foundations for sustainable growth, and with that, the most valuable moat - enterprise trust.
Another analogy, if you wanted someone to build a skyscraper for you and your employees to work in, and one had the architecture vibe-coded but it was faster and cheaper, while the other had it carefully designed and then fleshed out, but pricier and slower, which would you choose? Would you jeopardize the safety of your employees, your company and yourself with the one built off 'vibes'. Unlikely I'd say.
Just my two cents. I would not write off enterprise SaaS at all.