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AI Disruption Dilemma: Are You Building Features or Getting Replaced?

Author

Chintankumar Maisuria
August 28, 2025

Read time: 5 minutes.

Welcome to the 149th edition of The Growth Elements Newsletter. Every Monday and sometimes on Thursday, I write an essay on growth metrics & experiments and business case studies.

Today’s piece is for 8,000+ founders, operators, and leaders from businesses such as Shopify, Google, Hubspot, Zoho, Freshworks, Servcorp, Zomato, Razorpay and Zoom.

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"How do I compete with AI-native startups?"

"Should I rebuild my product around AI?"

"Is my SaaS obsolete?"

These questions are keeping SaaS founders awake at night.

Here's the reality: 67% of existing SaaS companies are panicking about AI disruption while their customers are still paying them monthly for solving real problems.

Most founders are asking the wrong question. It's not "How do I compete with AI?" It's "What problem am I actually solving that AI can't?"

[1] AI Disruption Reality Check

The Myth: AI-native startups will replace every existing SaaS tool within 2 years.

The Reality: 80% of "AI-powered" startups are just ChatGPT wrappers with fancy interfaces.

What's Actually Happening:

  • Customers are tired of AI tools that promise everything and deliver inconsistent results.

  • The most successful AI implementations are narrow, specific, and reliable.

  • Enterprise buyers are becoming more sceptical of AI claims, not less.

The truth: Your customers don't want AI. They want their problems solved faster, cheaper, and more reliably.

[2] Three Types of AI Competition

Type 1: AI Feature Competition Companies add AI to existing workflows to make them 10-30% better. Examples: Grammarly, HubSpot, Salesforce, adding AI features.

Threat level: Low to Medium.

Type 2: AI Workflow Disruption Companies use AI to completely change how work gets done. Examples: GitHub Copilot, Midjourney, Jasper.

Threat level: High.

Type 3: AI Solution Replacement Companies use AI to solve the same problem in a fundamentally different way. Examples: AI customer service bots, AI accounting tools.

Threat level: Variable.

[3] "Should I Rebuild?" Decision Framework

Don't Rebuild If:

  • Your customers are satisfied with your current solution.

  • AI would make your product more complex, not simpler.

  • Your value comes from data, integrations, or user experience.

  • You're solving a workflow problem, not a content generation problem.

Consider Rebuilding If:

  • Your product is primarily about content creation, analysis, or pattern recognition.

  • Customers are already using AI tools to do what your product does.

  • AI-native competitors are gaining significant market share in your space.

Definitely Rebuild If:

  • Your entire value proposition can be replaced by a $20/month AI tool.

  • Customers are churning to use AI alternatives.

  • Your product requires manual work that AI can automate completely.

[4] Smart AI Integration Strategy

Phase 1: AI-Powered Features - Add AI to improve existing workflows without changing them.

  • AI suggestions within your current interface.

  • Automate repetitive tasks that users already do manually.

  • AI-powered insights from data you already collect.

Phase 2: AI-Native Workflows - Introduce new workflows only possible with AI.

  • Features that generate content or analysis from scratch

  • AI-powered automation connecting different parts of your product

  • Predictive features that anticipate user needs

Phase 3: AI-First Experience - Redesign core experiences around AI capabilities.

  • Make AI the primary interface for key workflows

  • Use AI to personalise the entire user experience

  • Create AI-powered onboarding and support

[5] How to Compete With AI-Native Startups

Leverage Your Advantages:

  • Customer relationships and trust.

  • Domain expertise and understanding of the problem space.

  • Integration ecosystem customers rely on.

  • Customer data AI-native startups don't have.

  • Proven reliability track record.

Attack Their Weaknesses:

  • AI outputs are inconsistent; your product delivers predictable results.

  • AI-native tools often don't integrate with existing workflows.

  • Your customers already know how to use your product.

  • Enterprise features: security, compliance, user management.

  • Human support vs. AI-powered help systems.

[6] "Am I Obsolete?" Self-Assessment

You're Probably Safe If:

  • Your product manages workflows, not just content creation.

  • Customers use your product for collaboration.

  • Your value comes from organising, storing, or connecting information.

  • Your product gets more valuable as more people use it.

You're At Risk If:

  • Your product's main job is generating reports, content, or analysis.

  • Your core value is processing data that AI can handle.

  • Customers could achieve 80% of your value with a general AI tool.

You're In Danger If:

  • Customers are already using ChatGPT instead of your product.

  • Your entire workflow can be replaced by prompting an AI model.

  • Your product is primarily a UI for simple data manipulation.

[7] AI Integration Action Plan

  • Week 1: Survey customers about which workflow parts take the most time.

  • Week 2: Map which features AI could make 10x better vs. 10% better.

  • Week 3: Research AI-native competitors and their success/failure points.

  • Week 4: Choose 2-3 AI features you can build in 90 days.

[8] Common AI Strategy Mistakes

  • AI Washing: Adding buzzwords without meaningful improvements

  • Everything AI: Making every feature AI-powered instead of focusing on real value

  • Rebuild From Scratch: Throwing away working products to chase trends

  • AI-First Assumption: Believing AI should be the primary interface

[9] Bottom Line

Most SaaS tools won't be replaced by AI. They'll be improved by AI.

The companies that survive aren't the ones that add AI everywhere. They're the ones that use AI to solve customer problems better than anyone else.

Your customers don't care if you use AI or trained monkeys. They care whether you solve their problems faster, cheaper, and more reliably.

Stop asking "How do I compete with AI?" Start asking "How do I use AI to compete better?"

  • Focus on customer problems, not AI capabilities

  • Improve existing workflows before creating new ones

  • Use your data and relationships as competitive advantages

  • Build AI features that make your product stickier, not easier to replace

The future belongs to companies that use AI as a tool, not companies that are tools for AI.

That's it for today's article! I hope you found this essay insightful.

Wishing you a productive week ahead!

I always appreciate you reading.

Thanks,
Chintankumar Maisuria