393: AI is a Threat to SaaS Multiples

Jun 6, 2025 23m

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Episode Description

Software-as-a-service business acquisitions are in trouble. What is responsible for a downward trend in multiples and acquisition dollar amounts? It has a lot to do with AI, but it may not be what you think.

I recently recorded an in-depth session for Rob Walling's SaaS Launchpad. This module is called AI in SaaS, and I share over a dozen pitfalls, unobvious risks, and hard-earned insights from my own AI SaaS building journey. The course was already great, but... you know... ;) Use the code ARVID150 to get $150 off until June 8th.

The blog post: https://thebootstrappedfounder.com/ai-is-a-threat-to-saas-multiples/ The podcast episode: https://tbf.fm/episodes/393-ai-is-a-threat-to-saas-multiples

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AI-Generated Summary

The Impact of AI on SaaS Business Valuations

Arvid discusses the current downward trend in SaaS acquisition multiples and valuations, attributing significant changes to advancements in AI technology. He explains how AI is now capable of replicating what used to require a skilled team of developers, thereby reducing the perceived value of software products. The accessibility of AI tools has made the creation of SaaS applications easier and faster, diminishing the competitive edge that traditional software development once conferred.

Evolving Technical Skillsets in Development

Reflecting on his own experiences with building his SaaS product, Potscan, Arvid highlights how development frameworks like Laravel have accelerated the development process. He contrasts his past experiences with the present, noting that the emergence of AI coding systems allows developers to generate functioning software applications in record time, further impacting acquisition valuations as the technical barrier to entry lowers.

Human Capital Versus AI Efficiency

Arvid emphasizes the importance of human elements in SaaS businesses that AI cannot replicate, such as deep industry insight, interpersonal relationships, and robust personal branding. He argues that the intricate knowledge gleaned from human experiences and relationships is what will differentiate SaaS founders moving forward. He stresses the need for founders to leverage their unique perspectives and the power of collaboration as an antidote to AI’s threat.

Strategies for Future-Proofing SaaS Businesses

To combat the decreasing value of technical competencies, Arvid encourages SaaS founders to focus on building strong personal brands and forming strategic partnerships. He believes that creators need to cultivate authentic relationships, have industry insights, and develop collaboration agreements that tie together their business with complementary companies. This human-centric approach is seen as a way to stand out in an increasingly automated landscape.