Vibe coding didn’t even exist as an idea until a year ago, but now it’s leading to impassioned discussions between billion-dollar company CEOs.
Y Combinator President Garry Tan today said that SaaS apps like Zoho would be competed away by the vibe coding phenomenon. Tan was reacting to comments from Zoho CEO Sridhar Vembu, who’d said that vibe coding oversimplified the complexity of software development.
“Zoho’s business would be first to be competed away by people building their own custom software built by people using Replit, EmergentLabs and Taskade,” Tan said, referring to three Y-Combinator backed vibe coding companies. “Why pay $30/seat/month for over bundled SaaS when soon even non-tech ops ppl can vibe-code a custom solution in a weekend?” he added.
This led to many reactions on social media, and prompted Zoho CEO Sridhar Vembu to respond. “If our business would be the first to be competed away by vibe coded apps, why are we seeing such rapid customer growth (exceeding 50%) right now? And why don’t we see vibe coded email or spreadsheet or accounting app or messaging apps yet?” Vembu said on X.
“My own personal R&D project is to enable huge gains in programmer productivity by _combining_ compiler technology with AI. Our goal is to enable a quantum leap in programmer productivity while being able to provide security, privacy and compliance guarantees. Without those guarantees, vibe coding just piles up tech debt faster and faster until the whole thing collapses.”
Vembu then got personal. “Of course, for people like Garry Tan, tech debt is to be pawned off on unsuspecting acquirers,” he said, hinting at how several Y Combinator companies use an acquisition as an exit strategy. He then came up with a wager. “Let me make a bet with Garry Tan: we will outshine and outlast his vibe coding companies!” he added.
Tan’s sentiment wasn’t new. Several voices in tech have warned about the dangers that ‘vibe coding’ — coding with the help of AI without understanding much of the underlying code — could hurt SaaS companies. Vibe coding would allow anyone to create their own apps, which would mean that they would be less likely to pay monthly subscriptions for software. Ventures like Zoho, which are pure-play SaaS companies, are thought to be especially vulnerable.
But Zoho’s CEO says that it’s been a while since vibe coding became mainstream, and their business has only grown since then. Also, vibe coded apps might work off the bat, but maintaining them over long periods of time them becomes complex, which makes subscriptions worth it.
While Garry Tan’s broad point about vibe coding impact SaaS companies might be valid, it might not hold true for a company like Zoho. Zoho runs apps like mail systems, word processors, and slide makers, which might be too complex for the average vibe coder. Also, Zoho’s customer base of small businesses might not have the motivation — or technical ability — to vibe code their own solutions, and could prefer to keep paying Zoho monthly subscription fees. But given how it’s now much easier to create apps, the increased competition could put pricing pressure on companies like Zoho, which could be forced to cut costs to retain customers. It remains to be seen how vibe coding impacts SaaS companies, but with his offer of a bet, Zoho’s CEO is willing to put his money where his mouth is in believing that Zoho will weather the vibe coding storm.