The Craft of the Instruction

2026-02-19 · Source: AI on Medium · Field: Technology & Digital — Artificial Intelligence & Machine Learning, Software Development & Engineering, Business & Management · Depth: Novice, extended

Summary

Washington D.C. is experiencing heightened concern regarding AI's impact, driven by new agentic coding capabilities, a stock market sell-off in SaaS companies like Monday.com and Workday, and a general cultural shift. The "SaaS apocalypse" reflects investor fears that AI tools, such as Anthropic's plugins for law firms or Claude's financial analysis capabilities, could enable businesses to develop custom software, eroding the value of traditional software-as-a-service providers. This shift is predicted to move business models from seat-based pricing to outcome-based pricing, exemplified by companies like Sierra. While some argue against the feasibility of "vibe coding" complex software like payroll, others contend that a small team of internal developers could manage custom solutions, significantly reducing costs for large enterprises. The discussion also touches on the rapid acceleration of AI development, with models potentially contributing to their own improvement, and the disruptive potential for white-collar jobs, drawing parallels to the early stages of the COVID-19 pandemic.

Key takeaway

For entrepreneurs and product managers evaluating new software ventures or existing SaaS offerings, recognize that AI is fundamentally altering competitive landscapes. Your business model, especially if seat-based, faces significant disruption as AI enables custom, in-house solutions and outcome-based pricing. Focus your innovation on unique twists within established templates and consider how AI can enhance, rather than merely automate, creative processes to maintain a competitive edge and audience connection.

Key insights

AI's rapid advancement is disrupting traditional SaaS business models and accelerating job displacement fears across white-collar sectors.

Principles

• AI enables business model shifts from seat-based to outcome-based pricing.
• AI models exhibit recursive self-improvement, accelerating development timelines.
• Transfer learning allows models trained on one domain to excel in related, novel domains.

Method

AI-assisted romance novel writing involves using multiple chatbots (e.g., Claude, Grok, Novel AI) for different strengths, detailed prompting for specific tropes and kinks, and active filtering of undesirable language and pacing.

In practice

• Experiment with AI tools like Claude Code or CodeX to understand current capabilities.
• Explore Spotify's "prompted playlists" for personalized music curation.
• Consider outcome-based pricing models for new AI-driven services.

Topics

• AI Business Model Transformation
• AI-driven Automation
• Generative AI in Creative Arts
• Large Language Models
• Bioacoustics AI

Best for: Investor, CTO, VP of Engineering/Data, General Interest, AI Product Manager, Entrepreneur

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Editorial summary, takeaway, and curation by AIssential. Original article published by AI on Medium.