🪵 RIP SaaS

The beginning of the end

Klarna, the buy-now-pay-later giant, is cutting almost half of its employees... and turning off some costly product subscriptions.

Or, at least, that's CEO Sebastian Siemiatkowski’s plan.

Why, and how, you might ask? AI, of course.

Is AI taking our jobs?

Klarna is perhaps the first company to unapologetically harness the power of artificial intelligence. Here's how they're doing so far:

In 2023, Klarna began investing heavily in AI and cutting its workforce from 5,000 to 3,800 employees.

In February 2024, Klarna released a customer service chatbot (built in collaboration with OpenAI). According to Sebastian, this chatbot does the work of 700 customer service reps.

In August 2024, Klarna announced a 27% increase in revenue in the first half of the year compared to the first half of 2023. Revenue per employee also dramatically rose, from $393,000 to $689,000.

So, is AI taking (Klarna) jobs? Not exactly. Sebastian's execution so far has been to freeze hiring and not replace people who leave the business.

The end of SaaS products

This week, Klarna took it a step further, announcing they are turning off their subscriptions to Salesforce and Workday, replacing these products with internal tools built with AI.

The industry is ablaze with comments. Salesforce CEO Marc Benioff, of course, is dubious (but I think he may or may not have a horse in this race).

Could this be the beginning of the end for SaaS products?

If academic papers could talk

Here's a fun AI use case: Illuminate by Google.

Illuminate transforms text (scientific papers, notes, etc.) into a 2-way conversation. I encourage you have a play with the handful of examples Google have released so far; the experience is mind blowing.

Is this magic? Yes, in a way. It's important to remember all this content is based on LLMs which, although magical, are often inaccurate. A user on Hacker News flagged this example:

The same user goes on to qualify the experience as "stochastic parrots cosplaying as academics.". Harsh, but accurate.

So far, all the examples published by Google revolve around AI or LLMs. Yawn.

I have applied for early access and promise to turn the world's most important scientific paper, The case of the disappearing teaspoons, into a riveting stochastic parrot podcast.

From the woodshed

• Streaming services continue to fight for more revenue. This week, semi-surprisingly, YouTube is taking the spotlight by introducing ads when a video is paused on TV. A few months ago, Twitch introduced skyscraper ads that appear while watching a streamer and Amazon is trying out ads inside its chatbot Rufus. What next?

• Did you know there are over 9,000 job applications submitted every minute on LinkedIn? I’ll do you one better: only 7 people out of these are actually getting a job. Job seekers fear they may be ignored by bot screening technology and the answer is… bot applications. It’s not dystopian, it’s the circle of life and it’s beautiful.

• Bumble wants you to up your dating game. This winter, an AI will help you pick the right profile pictures, write a description, and even give you a hand through the awkward first conversation.

Get backlog’d

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Written by: Product nerds. What did you expect?

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