E19: AI Just Changed the Rules of SAAS with Jason Lemkin
In this episode of the SaaS Operators Podcast, we sat down with Jason Lemkin who explains how AI and Shopify have completely reshaped the landscape, eliminating lifestyle businesses and forcing founders to adapt or get steamrolled. He describes how defensibility in B2B SaaS is eroding, success in the Shopify ecosystem, and why hitting $10M ARR no longer guarantees a path to $100M. Jason Lemkin shares his rule for founders and execs. Deploy one new AI tool every month. Speed, brand, and execution matter more than ever. The episode closes with an honest take on raising capital in ecom SAAS, why VCs avoid the category, and what it will take to build a truly fundable business in the age of AI.
We had Jason Lemkin on SaaS Operators, and he didn’t hold back. Jason’s been investing in SaaS for years: Gorgias, Algolia, RevenueCat. His main point: the game in e-commerce SaaS is completely different now.
The World Has Changed
Jason put it bluntly: “If you want to build another app like it’s 2019 or 2021, you’re going to fail.”
Why? Two big forces:
- AI is the accelerant. Every SaaS category is being remixed. Thin wrapper apps are dead. The pace of competition is insane. AI makes incumbents better and also makes it easier for small startups to ship something that looks competitive on day one.
- Shopify owns e-commerce. Everything else has basically died. Shopify is a 12B revenue machine, growing 30% year-over-year. If you’re not building with Shopify in mind, you’re irrelevant. And Shopify itself is deep in AI.
The combination means you can’t sleepwalk your way into traction anymore. Lifestyle businesses might still work in tiny niches, but the 2021 playbook of “launch an app and coast” is gone.
Defensibility Is Eroding
In B2B SaaS, brand still matters, but product moats are disappearing fast. AI has put every customer relationship back in play. Two years ago, replacing a vendor felt like too much work. Now companies are actively looking for ways to replace entire teams with AI-powered tools.
That shift creates opportunity, but it also means hitting 10M ARR no longer guarantees you’ll scale to 100M. In Jason’s words:
- Old world: If you hit 10M with high NRR, you would get to 100M eventually.
- New world: If you hit 10M, you can get to 100M, but churn, competition, and changing customer expectations might stop you cold.
The Shopify + AI Tailwinds
Jason laid out three forces shaping e-com SaaS:
- Shopify is the only platform. WooCommerce and BigCommerce don’t move the needle. If you’re not in Shopify’s ecosystem, you’re wasting time.
- Enterprise is the growth engine. Shopify Plus and large brands are driving the numbers now, not just small merchants.
- AI is disrupting everything. It’s making small apps better than they would have been in 2021, but it’s also leveling up the big players.
That creates a weird dynamic: SMB apps look better thanks to AI, but the momentum is all at the enterprise level. Meanwhile, Shopify has its “favorite partners.” If you’re not one of them, you risk becoming Mailchimp, which got kicked out of the ecosystem and had nowhere else to go.
What Still Works
Jason’s advice for founders in this environment:
- Find a 10x wedge. You need an AI-driven angle that really matters. Incremental features aren’t enough.
- Move faster than incumbents. Big companies can’t pivot instantly because of technical and customer debt. That’s the opportunity for startups if you can ship what they can’t get to.
- Deploy AI yourself. Jason’s rule: every CEO and exec should implement one new AI tool a month. Not just buy it, but actually deploy and train it. That’s the only way to understand the work required.
The Funding Reality
One of the spiciest parts of the conversation: VCs hate e-commerce SaaS, even more now than before. The reasons:
- Too platform-dependent (Shopify).
- Too niche compared to broader enterprise plays.
- Too hard to build breakout outcomes.
Jason’s advice: either (a) frame what you’re building as something bigger than just a Shopify app, or (b) raise a small seed and treat it as your allowance. Build revenue, don’t depend on multiple rounds.
Because the truth is, there are maybe four companies in the Shopify ecosystem doing over 100M. That’s not a deep pool for investors.
The SaaS landscape has never moved faster. AI is changing product expectations overnight. Shopify has consolidated e-commerce into a single platform. The old rules, slow growth, lifestyle apps, inevitable scale from 10M to 100M, are dead.
It’s exciting, but it’s brutal. If you’re not adapting, you’ll get steamrolled.
