timreason

Visual Analytics & Data for the Business, an Image Maker & Photographer, Cyclist and Family Man

[Spenser Skates @spenserskates]

The State of AI in SaaS:
SaaS is Dead, Long Live SaaS

This started as an analysis of Andrej Karpathy's excellent overview of AI's capabilities. Those who deeply understand this will make all the returns and everyone else will lose a lot of money.

"Ghosts" is a brilliant metaphor for what we've created. They're not animals, and they're definitely not human. They are imperfect replicas of us. Karpathy describes them as a "statistical distillation of humanity's documents".

AI channels that distribution more effectively than any human and can beat us at Go, schoolwork, analyzing medical images, and many well defined tasks. At the same time, it lacks the reward systems that humans use to improve including curiosity, empowerment, play, intrinsic motivation, and culture.

As a result, AI's capabilities are limited. If you watch how the best work gets done with AI, it happens in chunks where a human supervises the output and gives iterative feedback to the AI. Large scale autonomous agents are brittle and fail quickly. Watch anyone vibe code an application with any level of novel complexity.

AI also faces integration barriers into existing organizations. AI is not capable of pulling a lot of the levers you need to be effective like coordinating with multiple stakeholders, building trust, authenticity, and interacting with different modalities across time and space. You could argue that the average human doesn't either, but people know when they're interacting with an AI and don't allow it the same agency as they do to people. The most successful AI B2B companies actually need more humans to integrate what they've built (forward deployed engineers) than traditional B2B SaaS.

What's next?

Those who understand AI and its limitations will transform the industry.

Incumbents will be killed by those who know how to leverage AI. I've seen countless homepages talk about being the "AI platform for AI agents" but can't even string a demo together. Meanwhile they're trying to pitch a future where fully autonomous entities collaborate in parallel to write all the code and humans are useless. They will be the first to be replaced when they get surpassed by AI native companies.

The investors blindly throwing money into companies at 100x multiples are going to lose their money. I spoke with one of the most disciplined investors I know last week. They said they felt they had to play the game on the field even though they knew it didn't make sense. And this was from someone who is closer to the technology than 95% of investors.

On the other hand, companies who deeply understand AI will win everything. Cursor, Glean, Decagon, Sierra, Linear, Lovable, Replit, Bolt, and many AI natives are off to a great start.

While 90% of incumbents haven't adapted, it is possible. Figma, Notion, Vercel, Box, and Intercom have done a great job of tearing down what they have and rebuilding AI native products. They have teams who are close to the current capabilities of the models. They also understand their problem domain and as new capabilities come out know what capabilities will map well to what problems in what way. They are able to deliver on AI's promise to their customers. Whereas the majority of existing companies will die.

In analytics, the door is wide open. In spite of many of our competitors filling up their homepages with the text "AI", I haven't seen a single compelling demo. We're still working like it's 2015.

This will change. We have spent the last year at Amplitude rebuilding our team to be AI native. We've learned about what models are capable of, how to write prompts, and how to leverage evals for building great products. We've worked with our customers to see what gets used in practice and what doesn't. We are building a vision for the future of analytics. We are all in on AI at Amplitude.

Stay tuned for what's next. We're going to be fast and furious with AI products at Amplitude.

[timreason @timreason]

Smart q at #ticketmaster blocked me tried to resolve but no luck no #PearlJam tickets for me. I’m reasonably technical and couldn’t figure it out. I’m going to stick to seeing smaller bands in better venues. The whole process of getting tickets for big name acts is a joke.

[timreason @timreason]

@mrjasonbfoster Remember I used deal with a guy called Dr De’ath at the Blood Donors Association. I think this one’s better though.

[timreason @timreason]

@AvaSantina Should’ve got a discount for that spillage

[timreason @timreason]

I’ve been searching around the #PostOfficeScandal suggestions for dealing with the organisation going forward. So far I haven’t seen any suggestions on winding up the current organisation and converting it into a co-operative. Why not?

[timreason @timreason]

@steverichards14 Make it long form on BBC 4 or on iplayer with newsnifht as a taster

[timreason @timreason]

#RCLens fans setting off all the flares at #Arsenal last night. How do they smuggle so many of them in??? 6 - 0 #COYG

[timreason @timreason]

Richie Sunak’s half smile half sneer at #PMQs would have worked well in The Godfather - cut to scene where Keir Starmer is at the barbers, getting a shave…..cue Richie suddenly meeting the Greek prime minister at the same time.

[timreason @timreason]

@mrjasonbfoster Or…….

[timreason @timreason]

I thought I would nip onto #oldtwitter to see what’s going on - it is poison. Nobody I follow appears in my feed - racists, dead cat topic pundits, all sorts of theorists that I don’t follow are. It’s dead isn’t it.

[timreason @timreason]

Why? In my “twitter” feed do I get a stream of right wing bigots as my suggested posts from people I do not follow. Not interested in climate denial, all sorts of minority phobias, hatred of the poor, refugees, old and afflicted. Oh and the conspiracy stuff - time to go?

[timreason @timreason]

@AvaSantina I thought it was great - looooooong - but great.

[timreason @timreason]

@Rob_Kimbell @capnbob Geography begs to differ with you Bob

[timreason @timreason]

#bbcnews 25 minutes into the the 10 pm news and all they’ve gone about is a lost sub. Surely other things are going on in the world ???

[timreason @timreason]

@mrjasonbfoster Cough!!!

[timreason @timreason]

Surely, all of them cannot be, truly, SUPER EXCITED - not all of them.

[timreason @timreason]

@IsabelOakeshott Oh it would be brilliant - who would stab who in the back first

[timreason @timreason]

@GaryLineker Well done Gary. Staying silent and being silenced is not an option. The lessons of the past must be heeded or we will fall.

[timreason @timreason]

@mrjasonbfoster I love how podcast and no idea he was on dragons den (stopped being watchable a long time ago). Old media trying to chaos down new media it looks like