SaaS is the most profitable business model on Earth.¹ It’s easy to understand why: build once, sell the same thing again ad infinitum, and don’t suffer any marginal costs on more sales.

I have been writing software for more than half my life. In the last year itself, I’ve talked to hundreds of founders and operators in SF, from preseed to Series E companies.

AI is bringing an existential threat to a lot of B2B SaaS executives: How to keep asking customers for renewal, when every customer feels they can get something better built with vibe-coded AI products?

And the market is pricing it in. Morgan Stanley’s SaaS basket has lagged the Nasdaq by 40 points since December. HubSpot and Klaviyo are down ~30%. Analysts are writing notes titled “No Reasons to Own” software stocks.

Three times this month, I’ve been in calls where customers asked the same question: “Could we just build this ourselves?”

A year ago, that was a joke. Engineering would laugh, explain the complexity, and everyone would renew. Now? Engineering is building POCs with Claude Code, and the laughter has stopped.

I’ve been in three demo calls this month where prospects said “this looks great, but…” and then described a workflow that doesn’t exist in the product. Sales promised “we can customize that.” Engineering said “Q3 at the earliest.”

None of those deals closed.

AI coding tools are creating a productivity paradox that nobody wants to admit.

I’ve been using AI to build my startup for a while now. The promise is simple—ship features faster, focus on the big picture, let AI handle the grunt work. And for the first few weeks, it felt magical. One prompt, few minutes of waiting, and suddenly I had working features.

But, on the longer term, I’m not sure how true that is. AI is making us worse developers, and we’re too addicted to the dopamine hit of instant code to notice.

Confession: I’ve been using Claude Code to write all my code for me. And I think it’s making me worse at the thing I’ve loved doing for twelve years.

I can clearly see how AI coding is rewiring our brains – it makes developers crave instant gratification instead of deep understanding, and reduces us to gamblers who pull levers for the next hit of working code.

If this is happening to me, someone who learned to code in the pre-AI era, what’s it doing to junior developers who’ve never known anything else?

A mindset shift that changed the way I think about the world

In India, knowledge is currency. Three months ago, if another founder asked me about my marketing strategy, I’d give them some generic answer and change the subject. You don’t share knowledge until there’s something in it for you.

I recently moved to San Francisco. A CTO of a unicorn startup had read one of my blog articles and we started talking over DMs. When I got to SF, I asked him to meet, and he agreed.

We met in FiDi for a casual lunch. This guy runs the entire company, and he was treating me — a new founder — like an equal. He was openly sharing his experiences, his journey, and his insights. When we were leaving, he offered to help with connections, fundraising, whatever I need.

He gave me a full hour of his day, just to shoot the breeze like two developers do.

This was nothing like what I was used to. Back in India, a person with even a 100-person office would have an air of arrogance. They’d guard their knowledge and time, only sharing when there was a clear benefit to them.

It was that day that I understood the beautiful “infinite sum game” being played in SF.

Some months ago, I visited New York and joined the Recurse Center.

This is after being in San Francisco for a month, staying next to the Embarcadero and attending On Deck Founders.

I’m living in Downtown Brooklyn now, fortunate to find a place that’s just a five minute walk away from the Recurse Center.

It’s been a pleasure to stay in both the cities. Some differences: