Why David Sacks Believes the AI Boom Mirrors the SaaS 2.0 Cycle

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David Sacks has a bold thesis:

“AI is following the exact same pattern we saw with SaaS 2.0.”

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Why David Sacks Believes the AI Boom Mirrors the SaaS 2.0 Cycle

He’s not just making a prediction—he’s laying down a playbook for founders and VCs who want to surf the AI wave without wiping out.

In this post, I’ll break down:

What SaaS 2.0 was
Why Sacks believes AI is repeating the pattern
What this means for product, GTM, funding, and exits
How you should build differently in this AI x SaaS moment

1. What Was SaaS 2.0?

SaaS 2.0 refers to the era from ~2010 to 2020, when:

Cloud became default
Vertical SaaS exploded
Product-led growth (PLG) took off
Multiples hit 20–30x ARR
Public markets loved recurring revenue

This cycle produced giants: Zoom, Shopify, Datadog, Atlassian, Notion.

Craft Ventures was born during this time—and Sacks had a front-row seat.

2. The 4 Phases of SaaS 2.0 (Now Repeating in AI)

Sacks sees the AI boom mirroring SaaS 2.0 almost identically:

PhaseSaaS 2.0AI BoomInfraAWS, APIsGPUs, models, vector DBsToolingZapier, SegmentLangChain, PineconeAppsNotion, ClickUpJasper, Adept, PerplexityPlatformsSalesforce, HubSpotTBD — OpenAI, maybe ChatGPT?

We’re currently in the apps phase, with early winners emerging.

3. Why This Pattern Matters for Founders

If AI is repeating the SaaS playbook, then:

Timing is everything
Infra gets commoditized
Tooling gets crowded
Apps win if they own distribution
Platforms will form later—and slowly

Your moat isn’t the model.

Your moat is distribution and usage velocity.

4. Sacks’ Thesis in One Line

“Just like SaaS 2.0, AI-native startups win by going vertical, not broad.”

He’s betting on AI-native SaaS, not wrappers or infra clones.

5. How AI Startups Can Learn from SaaS GTM

Sacks is encouraging founders to:

Sell outcomes, not AI hype
Build for daily workflows, not demos
Use bottom-up adoption to wedge in
Add sales-assist once the product sticks
Focus on speed to value, not just features

The same playbook that worked for ClickUp and Figma can work for AI—but faster.

6. The Burn Multiple Still Matters in AI

Sacks warns: “Don’t throw efficiency out the window.”

Even in AI, Craft uses:

Burn multiple
CAC payback
Sales efficiency

AI doesn’t exempt you from fundamentals.

7. Sacks’ Favorite AI Use Cases Right Now

He’s bullish on:

AI for customer support (automating L1)
AI copilots for workflows (legal, finance, HR)
Vertical SaaS with AI baked in
Founder-in-the-loop agents (not full autonomy)

Basically: AI that saves time, not just looks cool.

8. What AI Startups Are Getting Wrong

Here’s what Sacks calls out as red flags:

❌ API wrappers with no real IP
❌ No clear GTM strategy
❌ Products that rely on novelty, not retention
❌ Startups building on OpenAI with no hedge

Sound familiar?

It’s the same mistakes made during the SaaS gold rush.

9. Who Will Win the AI Boom?

Founders who:

✅ Solve a specific pain
✅ Layer AI into daily, high-frequency tasks
✅ Build an efficient GTM motion
✅ Understand distribution is king

Sacks says: “Don’t build a science project. Build a product that sells.”

10. The New AI Stack vs. The Old SaaS Stack

He believes the AI stack is forming now, similar to the SaaS infrastructure wave in 2015–2018.

Here’s a rough parallel:

SaaS 2.0AI TodayAWS, GCPNVIDIA, AWS BedrockSegment, SnowflakeLangChain, PineconeZapier, RetoolLLM orchestration, AutoGPTHubSpot, Salesforce??? (still emerging)

We’re 2–3 years away from full-stack maturity.

11. What Craft Ventures Is Backing in AI

Sacks is funding:

AI-native apps with PLG motion
Companies building their own models for vertical use cases
AI tools for B2B SaaS—especially sales, CS, ops
Infra that enables faster, safer, or more efficient LLMs

Notably, he’s not chasing flashy consumer AI.

12. What Sacks Thinks of OpenAI

He respects the tech—but warns founders:

“Don’t build your business on someone else’s API without a moat.”

If OpenAI launches a native version of your app tomorrow… do you survive?

13. How to Build a Moat in the AI SaaS Era

✅ Own distribution (community, content, network effects)
✅ Layer in proprietary data
✅ Add workflow depth, not just UI
✅ Build trust over time
✅ Become irreplaceable in your user’s daily life

Sacks calls this the “Notion vs. copycat” test.

14. Why AI Valuations Feel Like SaaS 2021

In 2021, SaaS was getting 100x ARR.

Now, early AI startups with zero revenue are raising at $100M+ pre.

Sacks warns founders:

Don’t optimize for valuation.
Optimize for traction and efficiency.
The correction always comes.

15. Sacks' Advice to Founders Building in AI

Build a real product, not a GPT demo
Don’t raise too much too early
Focus on retention, not virality
Talk to users daily
Get to revenue before OpenAI replaces you

16. Related Capitaly Blog Posts

17. FAQs

1. What is SaaS 2.0?
The second wave of cloud software—focused on verticals, PLG, and modern infra.

2. How is AI like SaaS 2.0?
Same cycle: infra → tools → apps → platforms.

3. Does David Sacks invest in AI?
Yes—especially AI-native SaaS with traction and defensibility.

4. What’s his biggest concern?
Founders overfunding, overhiring, and building wrappers with no moat.

5. What AI metrics matter most to Craft Ventures?
Usage, retention, burn multiple, speed to value.

6. Does Sacks prefer custom models or API-based apps?
He prefers startups that control their stack and IP.

7. Is AI just hype?
No. But distribution, not model access, will define the winners.

8. How soon should AI founders monetize?
As early as possible. Don’t wait for scale—charge for value fast.

9. Will Craft lead rounds?
Yes—especially at Seed and Series A with strong PMF.

10. Is the AI bubble going to burst?
Valuations may correct—but real AI use cases will endure.

18. Final Take

David Sacks isn’t just riding the AI wave.

He’s watching for the repeatable patterns from SaaS 2.0—and betting on the founders who see it too.

If you’re building in AI, don’t just follow the hype.

Follow the playbook that already created billion-dollar SaaS companies.

Subscribe to Capitaly.vc Substack (https://capitaly.substack.com/) to raise capital at the speed of AI.

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