Jason Lemkin, writing for SaaStr, identifies a structural problem with niche SaaS vendors: the TAM is too small to fund the engineering team that would make the product great. His argument is about what happens when customers can finally do something about it:
Before vibe coding, building a custom app almost never made sense. Custom development cost $50K-$100K minimum, took months, and you owned a buggy codebase forever with no support. The math didn’t work. Vibe coding changes the math. When you can build a working application in hours instead of months, the question stops being “can we afford to build this?” and becomes “can we afford to keep using a product that doesn’t do what we need?”
Lemkin’s SaaStr team replaced a $10K/year sponsor portal in days. Then they built “10K,” an AI marketing agent that ingests four years of their data to run Monday meetings and generate a daily executable marketing plan. No vendor built it because the TAM for “exactly Jason Lemkin’s Monday meeting” is one.
The threat gradient for vendors:
Small niche tools with $5K-$50K contracts — thin markets, thin engineering teams, products that evolve slowly. Your customers now have a real alternative to waiting for your roadmap. They’ll build around you.
But Lemkin is honest about the other side:
We now manage 10+ vibe coded apps and 20+ AI agents. That’s real overhead. It’s manageable because the apps pull their weight. But be honest about what you’re taking on.
Three humans and 20+ agents is an impressive ratio and a fragile one. Maintenance is yours permanently. No support ticket. Complexity compounds. The vendors most at risk are the $10K-$50K niche tools whose moat was the cost of custom development. That moat is gone. The ones that survive will be the ones whose value lives in accumulated domain data, not in features a customer can rebuild over a weekend.
