# Rebuilding SaaS depends on value and maintenance burden

Markdown copy of https://realalpha.app/s/rebuilding-saas-depends-on-value-and-maintenance-burden/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy.

- Speaker: [Alex Lieberman](https://realalpha.app/people/alex-lieberman/) · Co-founder & Managing Partner, Tenex · Co-founded Morning Brew, then built Tenex, an AI engineering firm helping companies go AI-native.
- Host: [Shawn Wang (swyx)](https://realalpha.app/people/swyx/) · Co-founder, AI Engineer · Wrote “The Rise of the AI Engineer” and founded Smol AI, maker of AI News.
- Show: Latent Space
- Episode: [AI in NYC: How Tenex Builds an AI-Native Engineering Team — Alex Lieberman & CJ Hess](https://realalpha.app/v/Vki6cklFqxo/), Oct 21, 2026
- Moment: 30:26 to 34:29 of the episode (4 min), playing on https://realalpha.app/s/rebuilding-saas-depends-on-value-and-maintenance-burden/; the episode from there: https://realalpha.app/v/Vki6cklFqxo/?t=1826

## Quote

> “It is all of the **headaches you don't have to** think about in maintaining it and improving it when it's not in your core.”
> — [Alex Lieberman](https://realalpha.app/people/alex-lieberman/) at [33:11](https://realalpha.app/v/Vki6cklFqxo/?t=1991) · Latent Space

## Takeaways

1. Mission-critical systems are riskier to replace than mid-tier SaaS.
2. Compare the opportunity with the engineering time it will consume.
3. Software also saves the work of maintaining non-core tools.

## About this segment

Alex Lieberman argues that replacing software depends on whether the savings or improved experience justify the internal effort. The hidden cost is maintaining a tool that isn’t core to the business.

From “AI in NYC: How Tenex Builds an AI-Native Engineering Team — Alex Lieberman & CJ Hess”, Oct 21, 2026. [Watch the full episode](https://realalpha.app/v/Vki6cklFqxo/)

## Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

[30:32](https://realalpha.app/v/Vki6cklFqxo/?t=1832) OK, so I actually wanted to also walk through one example. So I just released my results for my Kill My SaaS competition, where we replace a mid-tier SaaS. I call it mid-tier basically in the sense that it's probably not that trivial, but it's not Salesforce. It's somewhere in the middle. And I think there's a lot of mid-tier SaaS out there that people are always talking about, like the death of software, right?

[30:52](https://realalpha.app/v/Vki6cklFqxo/?t=1852) We were quoted $40,000 a year. We spent $1,000 to replace it. It's going to go into production for the next conference. So we are that customer that says, like, I want the one-on-one tool, and I'm expecting all these things. and we're building a domain specific or vertical specific thing for our business. And so far it's going okay. Tell me where it's going wrong. Also, I'm wondering how many story points that is.

[31:14](https://realalpha.app/v/Vki6cklFqxo/?t=1874) Yeah, well, CJ can size up the story points on him. I mean, my general view is I think the ripping out of, my general view is the more you move up marketing business, the harder the proposition of ripping out and building from scratch gets. I agree with you. But part of the reason when, as people have said, a very small group have said, Salesforce is really at risk. SAP is really at risk. Don't agree with that at all.

[31:44](https://realalpha.app/v/Vki6cklFqxo/?t=1904) It's just like those businesses in my mind just accrue value in this moment in time. And part of the reason they accrue value is there's so much money at stake where if a company gets it wrong ripping them out, you're talking about potentially hundreds of millions or billions of dollars. You're going to be risk averse. Yeah, exactly. I think for mid-tier, it actually comes down to what is the size of the opportunity and is that ever going to be the worthiest opportunity to rebuild inside of a company?

[32:16](https://realalpha.app/v/Vki6cklFqxo/?t=1936) I'm trying to even think. In an enterprise, let's just say there's some mid-tier SaaS that is a few million bucks a year. I think the first question is, from a percentage of revenue or cost perspective, is that going to ever move the needle enough to basically allocate engineer or resource to? I think it's going to be case by case. I think for some enterprises, the answer may be yes. For other enterprises, the answer may be no.

[32:39](https://realalpha.app/v/Vki6cklFqxo/?t=1959) I think more of it is going to be the thing that gets companies outside of capability. Like, you know, we talk about how I forgot who created the repo. That is basically the reverse engineer repo. Yeah, exactly. Like everyone's talking about that right now. And even at 10X, like we built our own like CRM from scratch. What did we build? Our OS we built from scratch. And like one thing I think we realized and every company realizes this is one of the beauties of software is not just the utility that you get from it.

[33:17](https://realalpha.app/v/Vki6cklFqxo/?t=1997) It is all of the headaches you don't have to think about in maintaining it and improving it when it's not in your core. So I think it basically comes down to, is the size of the prize big enough to justify the cognitive load that is going to take from some amount of resource in your company to nurture something that is not core to your business? Evidently, like I think for your business, the difference of basically $39,000 a year, you're implicitly saying that it is worth it.

[33:50](https://realalpha.app/v/Vki6cklFqxo/?t=2030) It is not just about costs. That's defense. I also think about the offense of like, no, actually our experience could be a lot better for literally every party concerned. Totally, totally. And so, yeah, I think part of the thought there is actually just, there's a significant, basically it's not just that. So there's two pieces to it. One is like, not just we're being overcharged for a product, but it's like the product has been mediocre for a long period of time.

[34:14](https://realalpha.app/v/Vki6cklFqxo/?t=2054) what would the 10x better version of this product look like? Because we are the customers and we can iterate with like minutes and not months. Totally. I think, I actually think what's interesting is I think startups