AI and SaaS: Why Neither Incumbent Tools nor New AI-native Tools Will Dominate
The emergence of AI is fundamentally reshaping SaaS markets, especially in specialized verticals like CRM and ATS. However, contrary to popular belief, neither traditional incumbents nor brand-new AI-first startups will necessarily come out on top.
Why legacy SaaS struggles with AI
Established platforms often struggle to fully integrate AI due to their complex legacy codebases, entrenched user habits, and cautious company cultures. Changing everything at once (product, code, and user experience) is incredibly risky and challenging.
As Alex Rampell says
"The battle between every startup and incumbent comes down to whether the startup can get distribution before the incumbent can build innovation."
The hidden weakness of pure AI newcomers
On the flip side, new AI-native startups lack the years of user interactions and feedback loops critical to understanding detailed customer pain points. Despite technical proficiency, they frequently miss the numerous subtle features essential for a truly robust SaaS product, such as edge cases handling, deep UX insights, and nuanced product-market fit.
The sweet spot: Hybrid SaaS companies
Companies positioned between these two extremes: experienced enough to understand deeply their customer’s workflows yet agile enough to rapidly integrate AI, are uniquely advantaged. Companies like Attio or Folk in the CRM space exemplify this model, leveraging their robust market knowledge and strong product foundations to swiftly adopt impactful AI-driven enhancements.
Intercom's bold AI pivot
Intercom, at over €250M ARR, provides a compelling case. By pivoting decisively to reinvent customer support around an entirely AI-driven vision, they’re proving that established companies can successfully leverage AI to outpace even AI-first startups, provided they move boldly and swiftly.
Crew’s market validation
At Crew, our current growth trajectory mirrors this dynamic perfectly. By combining our extensive recruitment industry experience with an agile AI integration, we frequently outcompete both pure-AI newcomers and legacy players slow to adapt. Our clients often tell us: "We can tell you've done our job before", validating our deeply practical AI approach.
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