Episode 813 | SaaS Predictions for 2026 (+ Reflections on 2025)

Rob Walling:
Welcome back to another episode of Startups of the Rest of Us. I’m Rob Walllling, and in this episode, I’m going to look back and revisit my predictions that I made a year ago. For 2025, I’m going to look ahead at some predictions I have for 2026, and I’m also going to reflect on a few new concepts introduced on this podcast over the past year, as well as some of the accomplishments of me and my teams at MicroConf and TinySeed. Before I dive into that, this podcast is looking for sponsors. Do you feel like your product serves the folks that listen to this podcast? Imagine getting in the earbuds of tens of thousands of founders and aspiring founders who are part of this incredible community. If you’re interested in potentially sponsoring this podcast, send us an email, sponsors@startupsforthrestofus.com. We are close to filling Q1 of 2026 and we’re already starting to plan Q2. 

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Before I get into predictions, revisiting the fail whale, it is the list of predictions I made for this past year. I was going through episodes from the past 52 weeks and there were a few concepts that I felt like I kept touching on. They kept coming up through listener questions or through just the kind of gestalt of the startup community that we live in. One was a lot of talk about plateaus, folks trying to make it through plateaus, wondering why they’ve plateaued and wondering what the tactic or solution is to getting through plateaus. I talked about that on a few episodes of this show, and I also did a talk at MicroConf. Well, it was about a year ago. I did one in Europe and then I did one in New Orleans just six, seven months ago. And I believe you can find that on the MicroConf YouTube channel, microConf.com/youTube if you want to check it out. 

But I went through and I identified what I believe is every cause of a SaaS plateau. And there were … I’m trying to think now off the top of my head. This is the reason I have notes, but I was seven or eight different causes and that’s it. And I looked across hundreds of B2B SaaS companies and talk a little bit about how to get through them, but frankly, how to get through them is usually obvious. It’s really just identifying the cause or the reason for the plateau. That’s the key insight that you’re looking for. So you can check that out on YouTube or go back through the podcast backlog if you haven’t in a while. The next thing that came up is the question of, do I need a co-founder? And it comes up about every other month and usually it’s, I’m technical, do I need a marketing sales co-founder or a marketing sales? 

Do I need a technical co-founder? As well as I had questions about the SaaS skillset hierarchy, meaning are there skills that are more important as a SaaS founder? And what’s interesting is as I looked back over the year, I kept revisiting these topics in different forms and fashions until I finally realized there’s a framework here. And it’s called the Core Four. And it’s where I talk about marketing and sales, then product and development being these core four skills that I believe the founding team should possess or should be willing to learn. And so core four and the SaaS skillset hierarchy I think are something that’s going to stick around for a while. And I’ve already had multiple listener questions about it in a prior episode. And there’s still more to be flushed out with that, but I think that’s a concept that really has legs in terms of bootstrapping and even not bootstrapping SaaS. 

And lastly, my three favorite episodes of the year are my 12 biggest mistakes and my 12 best decisions that I’ve made in my entrepreneurial journey. Those are episode 781 and 782, as well as episode 800, where I walk through the 12 commandments of startups for the rest of us. Things like nuance beating absolutes, making hard decisions with incomplete information, that marketing beats product to build your network, not your audience. And then overnight success takes a decade. I have a total of 12 commandments in that episode. Those are just a few. Now let’s dive in to my predictions that I made just one year ago. And some of these predictions I had rolled over from prior years, and I’m no longer going to do that. Because here’s the thing, if you predict something year after year after year, you can eventually be right. I predicted that Twitter would change hands in 2025. 

And you know what? It’s kind of true. I asked ChatGPT to rate my predictions on whether they were true or false. And it said, mostly correct. The ownership shifted in an internal transaction because Elon Musk’s AI company, XAI, acquired Twitter in an all stock deal valued at $45 billion. I’ll admit, it’s not exactly what I had in mind, but I think I get half credit for this one. Something had to change. I mean, the reason I was thinking about Twitter changing hands was that the financial arrangement to buy it with the debt service I thought was untenable. And I believe this somehow through financial engineering must have made that go away. So I was tapping into the idea that Twitter was not doing well financially and that the debt payments and such were going to be such a big issue. And it didn’t go to an external acquirer, but I’m going to give myself half credit on this one. 

My second prediction is that no code/low code will get unit tests and version control. That has not happened. ChatGPT is way too generous with this. It says directionally correct. Tooling is maturing, but there’s no singular breakthrough event. So no, I get a zero on this one. Tooling is maturing. I have a prediction in 2026 that talks about no-code, low-code and AI, but I think I get a zero on this one. And this just goes to show you how random predictions are. And when I make predictions on this show, I’m always like, “Eh, these are all flyers. These are things I’m…” Some of these are trends, right? The ones I make about B2B SaaS, especially bootstrapping, it’s like, “Oh, I’m kind of already seeing a trend and I’m predicting it’s going to continue.” But things like my next one, Stripe will go public in 2025. I don’t know, what is it? 

It’s a gut feel. If it doesn’t happen, it doesn’t happen. It’s all just for fun. And that’s why if you go on the internet and you see people making predictions about anything about crypto, about Bitcoin, about gold, about startups, it’s all just made up. People don’t really know what the future holds. So just take that for a grain of salt as you hang around on the internet. So yeah, my third prediction with Stripe will go public. It did not. That is a big fat zero, not much more to say. My fourth prediction was that volume for Google organic SEO, meaning content-based keyword targeting, will slide at least 15% in 2025 as they give way to AI searches. And ChatGPT tells me partly true search is shifting, but it’s not a clean 15% drop yet. I give myself a fat zero. The reason I said 15% is I wanted to make a bold prediction, and 15% is a tremendous amount. 

And I assumed the adoption of AI would continue and accelerate. Maybe it has, maybe it hasn’t. Maybe Google is just hiding this from us, but I have no evidence to believe that it has dropped 15%. Although I will say, anecdotally, like myself and all the founders I hang out with, it’s kind of ChatGPT or Claude or Manis first. And Google with the 10 blue links where the top five are actually sponsored and don’t look like sponsored links, it just feels so outdated already. So this is coming. If it’s not already happened and just not documented, this is the way. My fifth prediction was that ads in AI chat interfaces, which I then had to qualify, like you don’t already know what that is, ChatGPT and Claude will become common. And I say, “This is a zero.” It is bound to happen. It is happening. We know it’s in the works. 

We’ve heard folks talk about it, but it’s always the thing of we overestimate how much progress will happen in a year and we underestimate how much progress will happen in five years or 10 years. And this is me overestimating it. I figured by this time, this year that we would see a lot of ads in these interfaces. And I guess the fact is, it’s still in land grab mode. They’re still trying to get market share. And until you see this with streaming services like Netflix and HBO Max and all the other movie and TV show streaming, where for years they kept the price low, much lower than cable and they were just trying to get subscribers, get subscribers. And then now, what is it? Every three months, you get something about one of these services is raising their price, $2, $3, $5 a year, and it just goes up and up and up. 

I looked the other day, I think I’m paying $22 for Netflix in the US. And we have probably an HD streamer 4K and we have multiple seats where we can have five logins or whatever. But I mean, I remember when Netflix was under $10 for streaming. And so it really does kind of creep up on you. And that happens when the growth stops. It happens when that top level subscriber and customer acquisition slows down and AI chat interfaces are nowhere near that point. And so my prediction will be right ultimately, but it was premature. So that’s a zero. My sixth prediction was that Google will see its biggest ever drop in revenue due to the transition from 10 blue links plus ad words into AI ads and the answer is zero, not true yet. This is another one. It’ll happen, just hasn’t happened yet. And you know what? 

There’s a chance it won’t happen if Google gets its act together. Just in the last couple months, it seems Gemini is doing really well. So maybe it won’t see this revenue drop if it’s able to send the bleeding of other folks leaving for other AI chat interfaces. My seventh prediction way premature is that the term AI will be used in fewer and fewer H1s because it will be assumed. And I harkened back to when SaaS was becoming a thing and we had headlines like, “You don’t need to operate a server to run this software. Access it from any internet browser. Entering your credit card is safe and secure.” ChatGPT gives me half credit for this. It says we’re seeing content guidelines now focus less on labeling things as AI explicitly. It’s often assumed and that AI is now a baseline. So I will give myself half credit for this. 

I mean, this is what a routing. I think I’ve gotten all zeros and two half credits.This is abusive. All right. Number eight, self-driving taxis. This isn’t even a prediction. I just threw it in as a story where I was in Phoenix with Dr. Sherry and we took Waymos all over the place. And really the prediction is self-driving taxis have a future. I wasn’t necessarily bullish on them before that, but bottom line is they are spreading. So they’ve been in the Bay Area, I believe maybe Las Vegas, Phoenix, and maybe Austin, Texas, all places with relatively good weather. And what I’ve heard is that they are creeping into places that have snow. So I’ve heard they’re going to start doing some pilots here in the Twin Cities as well as other areas of the country. So while this prediction is whatever, it’s a half or a zero. 

I do think I’m spot on with that trend. And my ninth and final prediction for 2025 was platform risk will intensify larger, more monopolistic platforms. Bootstrap founders will face increased challenges with dependencies from Google, Apple, Facebook, Shopify, driving more awareness and strategies around reducing platform risk. I mean, ChatGPT says true and continuing. Yeah, I mean kind of probably half credit. I don’t feel like I nailed this one. It was also just a little more vague than I would have preferred. So all in all, nine predictions, and I believe I got a total sum of 1.5 if you do three halves. So take my predictions with a grain of salt. I’ll admit my predictions for 2024 prior year. I did a lot better. You can go back and listen to that episode if you’re interested. So diving into my predictions for 2026, I have nine of them and this time I stuck a little more to the startup space and specifically around SaaS for the first three. 

So my first prediction is that bootstrapped and mostly bootstrapped horizontal SaaS will experience massive headwinds in 2026. This is something we’re seeing play out with TinySeed applicants as well as TinySeed companies that we have backed previously. And there’s always been a bit of a challenge with horizontal SaaS, but honestly, given the market size, if you can execute well, you can get pretty big, pretty fast. The thing is we’re seeing so much money going into venture backed companies as well as AI first companies. And it’s just flooding the space of all these big markets, of all these big horizontal markets. And if you think about what is not horizontal, well, it’s either vertical or orthogonal. I’m not going to define those here. I’ve talked a lot about them on the podcast, but it is an exception that I’m seeing when a horizontal mostly bootstrapped company is able to continue growth and not plateau in that the ranges depend on the size of the market and all this, but it’s half a million, a million, two million, and they plateau hard and then they just can’t. 

They can’t get through it. And the reasons vary, but what is often either a combination of higher churn or a lot of competition. And it’s not just competition in terms of products, but it’s competition in terms of all the marketing that’s being generated and all the content and SEO, all the headwinds that that creates. Now, there are exceptions to this. If you are building a lifestyle project and you’re focusing on a single traffic source like SEO and you’re building whatever headshots.ai or talk to yourpdf.ai, and you’re really just going after a single channel or maybe two, can you build a 20, 30, $40,000 a month business? Yeah, probably if there’s enough traffic there. What I’m talking about is building a tinySeed MicroConf startups for the rest of us type seven or eight figure ARR SaaS company that is going to be something that’s very valuable and can sell for tens of millions of dollars. 

I specifically mean the ambitious bootstrappers rather than a lifestyle bootstrapper. Horizontal is tough these days, y’all, and we’ve been seeing that trend and we are continuing to see it, and I don’t see it getting any better in 2026. My second prediction is that over reliance on SEO will be problematic for mostly bootstrap SaaS founders, actually for any SaaS founder. If you look at mostly bootstrapped marketing approaches, it’s content, SEO, the top five, right? Content, SEO, pay-per-click ads, integrations, partnerships as one, and cold outreach. All of these are getting more crowded, but content SEO especially with the rise of AI and with the fact that it is quote unquote free marketing. We all know it’s not that, but it’s probably the number one. I think it has to be the number one marketing approach that I see SaaS companies doing in our space, is content and SEO. 

And therefore it has become extremely crowded and there’s SEO and then there’s AI. SEO is kind of how I think most people are referring to it. And the idea here is not to not do it, but it’s to realize that an overreliance on it is going to be difficult as the market shifts and as things become more competitive. And so if I were launching a SaaS today, would I still do it? Absolutely. But would I be concerned if it was 80% of my new customers? I would be. Prediction number three is that the top few brands in any category will grab massive market share in 2026, even more so than in prior years due to the fact that AI chat interfaces are recommending a short list of companies. So oftentimes you would go to Google and you’d search for what are the best email marketing platforms and you might come to a Reddit thread or you might wind up maybe going to a private Slack group and asking, “What are people using for email marketing these days?” And usually you get maybe three answers or you get, “Well, if you want to sell stuff online, then it’s this tool. 

And if you are just blogging them on a big list, then it’s these other tools.” This I think it’s being condensed even more. The long tail is becoming more challenging because AI can recommend, you can say, give me the top three or give me the top four and give me the reasons. And it will. It will give you its opinion. And I know it’s not really an opinion, it’s just a predictive LLM, but it is, I think, only exacerbating this issue. And I wanted to find brand for you real quick. Brand is what people say about your company when you’re not in the room. And if folks start to have an affinity for your company and they start recommending you, there’s word of mouth where they’re telling other people about it in these conversations or one-on-one or online people are writing blog posts about you suddenly saying, “Hey, there’s this great new tool and it’s called Drip and it’s very different than all the other email marketing tools that I’ve seen. 

And here’s why.” And people are actively talking about that on podcasts and on blogs. That’s where you start to have a brand. What I want to discourage you from is to do brand marketing because as a mostly bootstrap founder, what you really want to do is build an incredible product that solves a desperate pain point in a way that other tools don’t and be so good that folks can’t ignore you. And the more customers you get, you will build that brand. Don’t go out and do brand marketing. We know that brand marketing is things like buying billboard ads and spending money just to get your name out there for exposure. And that’s not what we do as mostly Bootstrap founders. We can’t afford to do it. So don’t feel like you need to go out and just do brand stuff. What you need to do is build an incredible product and get people to love it so much that they talk about this. 

On a podcast episode probably two years ago, we were talking about brand. There was a listener question and it was Ruben, founder of Siinwell and I, and he said, “You’ve built some good brands.” And I said, “Yeah, I guess I have. I hadn’t really thought about it. ” And so like TinySeed and MicroConf in the right circles are solid brands and Trip is a good brand and maybe SaaS Playbook or maybe this podcast, right? And he said, “How’d you do it? Did you focus on doing that? ” And I was stumped by this. I was like, “I don’t know. I don’t really know how I did.” And he said, “Yeah, that’s my point.” Usually you picked a memorable name, you solved the problem and you were the founder spokesperson of this, but you built a great tool or you, I guess in Microgone TinySeed, it’s not a great tool, but you built a great product, so to speak. 

But his point was, but I never focused on building it. You just get enough customers. By the time you hit say a million ARR as a SaaS company, you’re probably going to have kind of a brand with a group of people. You’re going to have this affinity group that really likes you and starts talking about you. It doesn’t happen super early. It’s not when you have 10K MRR. And this is something that, I don’t know, I struggle to recommend to people because then people run out and do a bunch of brand stuff. You can hear me couching this. But the idea is that as you grow, if you have a memorable name and you have some personality to where you’re not just a transactional SaaS application and you care about the experience of your users, you’ll build a brand. I will admit, it’s easy mode if you have a founder spokesperson. 

Rand Fishkin with SEO Moz and now with SparkToro, he has built two great brands and a big part of that is because it’s Rand. But it is possible without that. We can look at Semrush and I don’t know who the founder of Semrush is and I don’t know if they’ve ever created content. And yet Semrush is a brand, right? When I think of the top three SEO tools, these days, HRFs, Semrush and Moz are the three that I would name. There’s probably others out there, but those are the three that I remember and only Moz had a founder spokesperson. I know of the founder of HRFs, but I don’t think at least I wasn’t paying attention. I don’t feel like that founder was a huge content creating spokesperson in the early days. Maybe they were. I missed it and yet I still saw HRF rise to prominence. 

So in conclusion, my third prediction is that the top few brands in any category will continue to grab massive market share in 2026. Prediction number four is that the AI VC bubble will not burst in 2026. Massive investment will continue without a dramatic crash. I’m measuring this by the fact that it’s estimated about $190 billion of venture capital dollars were invested in AI in 2025. And if there’s a big crash, this number is just going to contract like crazy. So this will be a really easy number to look at. At the end of 2026, is the number approximately 190? It might be a little more, it might be a little less, but if there’s a dramatic crash, it’s going to be half as much or even anything below three quarters I think implies that this something’s going wrong. My fifth prediction is that open source AI models will double in global usage driven by cost control and platform risk. 

So as of now, a working paper summarized in IT Pro says closed models are about 80% of overall usage, implying that open is about 20% and I’m making the bold prediction that AI models will double to around 40% usage by the end of 2026. This is one of those where I’m probably getting out over my skis and it’s going to be a few percentage points per year if I’m being realistic. Maybe if it’s at 25 or 30%, I’ll be surprised. But my bold prediction is it’s going to double to 40% that open source AI models are going to continue to grow. My sixth prediction is that at least one major no code platform will struggle or go under as AI removes its core advantage. Realistically, vibe coding and AI assisted coding is making things a lot easier for folks to build internal line of business apps. 

Now, I know folks are often putting these in production and trying to actually build companies around them. And you’ve heard my take on that in prior episodes, but realistically, my team at MicroConf and TinySeed has built multiple line of business apps. By line of business, I mean just internal use apps to produce this podcast in our YouTube videos, our applications for TinySeed to manage SaaS Institute, all kinds of apps that we’ve built in no code that I think feasibly can be built with AI and be built relatively well. And you know what? They don’t need to scale or be as maintainable as something that you put out in the wild and have customers using. So I think AI and vibe coding are going to start biting at the heels of no code platforms. And my prediction is that at least one major platform will struggle or go under because of this. 

My seventh prediction is that M&A activity will increase for small fast growing SaaS companies as larger firms look for AI adjacent growth. There was a flurry of M&A activity in 2020 and 2021 as money flooded the global financial system, and then it ground to a halt in 2022. It was slow in 23, a little faster in 2024, a little faster in 25. And I think 2026 is going to see a shot in the arm, not only from money continuing to be invested in the global financial system, but a lot of these AI companies are going to be looking for growth. They need growth at all costs. And if they’ve raised 50, 100, 500 million dollars, they have money to buy smaller startups. So I think that M&A activity, especially for smaller fast growing SaaS companies, and what is small? A million, five million, 10 million ARR? 

Yeah, any of that’s small when you’re talking about the order of magnitude that these AI companies are operating at. So I think 2026 is going to be a banner year for M&A activity for B2B SaaS companies. My eighth prediction is that Bitcoin will hit a new all- time high of $160,000 in 26, and I think the price will range from about 100,000 to 160,000 throughout the year. As I’m recording this, Bitcoin is at $87,000. So maybe I’ll update this and say, I think the price range will be from 90 to 160 throughout the year, that it’ll hit 90 and then it’ll bounce up and down as it does. My ninth and final prediction is that Stripe will remain private throughout 2026, continuing to operate like a public company without actually going public. This in fact is the opposite of the prediction I made in 2024 and 2025 where I kept saying, “Stripe’s going to go public.” And so guess what? 

This year I’m saying they’re not going to go public. And guess what? This is the year I can almost guarantee they’re going to go public because my predictions are so awful. I’ve talked about this at length in the past, so I won’t beat it to death here, but suffice to say I am predicting no IPO for Stripe. And lastly, as I wrap up this episode, I just wanted to reflect on 2025 and some of the things that I’m really proud of that my team and I pushed live and pulled off in 2025. There was MicroConf US in New Orleans, which was a great event. If you attended it, you know the feeling, the vibe in that room. And if you didn’t, you should check out MicroConf US in Portland, which is happening here in just a few months, microconf.com/US. We also pulled off MicroConf Europe in Istanbul and producer Sonya did an amazing job with both of these events. 

I invested in my 234th SaaS company combining our 210 TinySeed investments in my own private investments. I’m feeling pretty good about that. And I love the viewpoint that I get seeing the inner workings of all these companies. We shipped 52 episodes of this podcast. We shipped 26 videos through our YouTube channel and for the most part, those videos are brand new original content, right? It’s not like this podcast repurposed for that. We also crossed 111,000 subscribers on our YouTube channel and just last week passed six million video views on the channel. So it’s been a ton of hard work from producer Ron, and I just really appreciate all the hard work from the MicroConference TinySeed team to put all this stuff into the world. And looking ahead to 2026 right now, I’m of course thinking about Microgon Portland in April and TinySeedTale season seven. I’m about to start recording the first episode of that season here in the next few weeks and fingers crossed, it’ll go live next fall of 2026. 

Thanks for hanging with me on this show for another year. It’s always great to be in your earbuds, even if my predictions are catastrophically bad. I appreciate you listening this week and every week. And if you keep listening, I’ll keep recording. This is Rob Walling signing off from episode 813.