20VC: Base44's Maor Shlomo on How Vibe Coding Will Kill SaaS...
The Twenty Minute VC (20VC)Full Title
20VC: Base44's Maor Shlomo on How Vibe Coding Will Kill SaaS and Salesforce | Why it is BS that Vibe Coding Platforms Do Not Have Defensibility and Bad Margins | Why He Worries About Google, Not Replit and Lovable | Why Long Anthropic, Not OpenAI?
Summary
This episode features Maor Shlomo of Base44 discussing the disruptive potential of "vibe coding" to revolutionize SaaS by enabling users to build complex applications with less technical expertise. Shlomo highlights Base44's acquisition by Wix and shares his vision for the future of software development, emphasizing efficiency, customization, and the growing role of AI in creation.
Key Points
- Base44 was acquired by Wix for $80 million after an 18-month bootstrap journey, driven by rapid user traction and profitability, indicating the significant potential of the "vibe coding" category.
- The founder believes that "vibe coding" will eventually subsume existing software categories like CRM and task management, making it easier for individuals and small businesses to build tailored solutions rather than relying on off-the-shelf, feature-bloated SaaS products.
- The concept of a "moat" in the vibe coding space lies not just in the ease of creating a tool, but in the platform's ability to handle complex, real-world use cases through extensive integrations, agent tuning, and robust infrastructure, rather than superficial front-end generation.
- The competitive landscape of AI model providers is highly dynamic, with the ease of switching providers based on performance and cost creating significant market volatility, making a multi-provider strategy crucial for companies like Base44.
- The future of AI development lies in leveraging model providers that are moving faster, focused on B2B customer value, and have robust models that enable complex applications, with Anthropic being favored over OpenAI due to these factors.
- Early-stage investors should prioritize vertically integrated, healthy businesses with strong revenue growth and a clear path to defensibility against commoditization by LLM providers, rather than solely focusing on current revenue figures.
- The true value of wealth from entrepreneurship lies not in material possessions, but in the freedom it provides for time, the ability to help others, and the capital to pursue ambitious, world-changing ventures.
- The competitive advantage for Base44 lies in its internally built, vertically integrated backend infrastructure, which is difficult for competitors to replicate and migrate away from, distinguishing it from companies relying on third-party providers like Superbase.
- The rapid pace of AI development means that companies must focus on building substantial, hard-to-copy features and iterate quickly, understanding that short-term innovations can be copied in weeks, necessitating a focus on core product value and velocity.
- The "vibe coding" market is not a winner-takes-all scenario, allowing for multiple players to capture significant niches due to the vast growth potential and diverse needs of users, making it an attractive area for venture investment.
Conclusion
The future of software development is leaning towards AI-driven creation, enabling individuals and small businesses to build complex, customized applications with ease, thereby disrupting traditional SaaS models.
Defensibility in the "vibe coding" space comes from building robust, vertically integrated platforms that handle complex use cases, rather than just superficial code generation, which is easily replicated.
The AI market is characterized by rapid innovation and intense competition, requiring companies to be agile, focus on core value, and strategically leverage evolving LLM capabilities to thrive.
Discussion Topics
- How will "vibe coding" fundamentally change the landscape of software development for both technical and non-technical users in the next five years?
- With the rapid pace of LLM advancements, what are the most critical factors for businesses to build defensible moats in the AI-powered software creation space?
- Considering the dynamic nature of AI model providers and their pricing, what strategies should companies employ to ensure long-term profitability and margin stability?
Key Terms
- Vibe coding
- A term referring to the use of AI and natural language prompts to generate software applications, making software development more accessible to non-technical users.
- SaaS
- Software as a Service, a software distribution model where a third-party provider hosts applications and makes them available to customers over the internet.
- LLM
- Large Language Model, an AI model trained on vast amounts of text data, capable of understanding and generating human-like text.
- Moat
- A sustainable competitive advantage that protects a company's long-term profits and market share from competitors.
- Bootstrap business
- A business that is started and grown with minimal external funding, relying on personal savings or revenue generated from sales.
- Vertical integration
- A strategy where a company owns or controls multiple stages of its production process or supply chain.
Timeline
The decision to sell Base44 to Wix was driven by a desire to amplify the company's impact and potential for growth beyond what a bootstrap model could achieve, while retaining product team independence.
Wix was seen as a strategic partner due to shared target audiences, aggressive marketing, and the ability to leverage Wix's infrastructure for support and operations, allowing Base44 to focus on its core product.
The founder believes it is feasible for individuals to build their own customized CRM or similar software using vibe coding tools, deviating from the one-size-fits-all SaaS model.
The moat for vibe coding platforms lies in their ability to build complex, functional applications with numerous integrations and advanced agent tuning, not just simple front-end generation.
The market is seen as having three entry points: AI upbuilders like Base44, incumbent software giants integrating AI, and consumer-focused design tools, with potential for overlap and competition.
The main worry is not Replit, Lovable, or Bolt, but the market dynamics of LLM providers and the potential for one to dominate and then conquer the vibe coding market.
The ease of switching LLM providers based on cost and performance creates extreme market volatility, unlike the difficulty of switching cloud providers.
Margins in the vibe coding space are expected to improve dramatically as cheaper open-source models become more capable and platforms intelligently route requests to optimize cost and speed.
User success is measured by sentiment analysis of user interactions, the agent's ability to perform requested tasks accurately, and the reduction of errors in application development.
The current focus for AI startups should be on rapid growth and capturing market share, rather than immediate margin optimization, as model costs are expected to decrease.
For early-stage AI app investors, the key criteria are fast revenue growth, defensibility against model providers, and vertical integration, not just current revenue numbers.
A viable strategy for AI companies is to achieve rapid distribution with existing models and then transition users to more efficient, proprietary models for improved margins.
Businesses are defensible if they build significant infrastructure or are vertically integrated, rather than relying solely on prompt engineering, which is easily replicable by LLM providers.
Base44's differentiation from competitors like Cursor lies in its focus on empowering non-technical users to build functional applications without needing to see or manually edit code.
The venture capital model thrives on huge returns, and the diverse nature of the software building category allows for multiple successful players, not just a single winner-takes-all market.
The speaker believes that LLM technology will not hit a speed bump and will continue to unlock economic value, especially as more complex applications can be built by individuals with fewer resources.
The advice for startups is to focus on building a great product and finding the right market approach, rather than getting distracted by competitor actions, as the market is large enough for many players.
Anthropic is preferred over OpenAI for investment due to their faster pace, focus on B2B value, and superior models, positioning them for stronger growth.
Jack Dorsey would be an ideal addition to the Base44 board for his builder mindset, strategic thinking, and ability to consistently create innovative products.
Frontier Labs might be delusional about their moats, as the LLM market is increasingly competitive, with Chinese players changing dynamics and the risk of better models or lower prices eroding revenue.
The key to partner selection is finding someone with a similar mindset and understanding of the entrepreneurial journey, especially when navigating the intense demands of building a company.
The founder's past struggles with infrastructure failures and negative feedback highlight the importance of resilience and community management during rapid growth phases.
Episode Details
- Podcast
- The Twenty Minute VC (20VC)
- Episode
- 20VC: Base44's Maor Shlomo on How Vibe Coding Will Kill SaaS and Salesforce | Why it is BS that Vibe Coding Platforms Do Not Have Defensibility and Bad Margins | Why He Worries About Google, Not Replit and Lovable | Why Long Anthropic, Not OpenAI?
- Official Link
- https://www.thetwentyminutevc.com/
- Published
- November 24, 2025