OpenClaw is making waves as an open-source, self-hosted AI agent platform. But is it a true breakthrough, a passing fad, or simply another feature dressed up as a revolution? With a reported 2 million weekly users, its momentum is hard to ignore.

Founders are rapidly deploying agents, investing in hardware, and experimenting at full speed. Even Jason Lemkin of SaaStr has integrated 20 AI agents into his team. Yet his hands-on trials have also surfaced some messy limitations.

So what’s the verdict? In the latest episode of The Difference Engine tech strategy podcast, Paul Maher and Jonathan Simnett show whether AI agents outperforming human workers, or are they in fact more similar than we expect?

Also in this episode: We’re going to highlight the Europeans leading the AI charge and sift through the debris of the so-called Saaspocalypse

What to look forward to:

00:33 Is OpenClaw a fashion, fad or now just a feature?

16:39 Who are the Europeans who are challenging in AI?

27:05 What does digital sovereignty mean across the continent?

There is more information on how to design your category on our blog

Follow us on LinkedIn:

Paul Maher

Jonathan Simnett

Want to create a podcast for your business or brand? Contact Flamingo Media to make it happen.

So let's kick off this week with the rather thorny, or should we say snappy? In fact, question of. Open claw now. Open claw. Is it a fashion, is it just a fad or now just a feature or frankly, something bigger than that. So it is a phenomenon, unlike many we've seen, um, you know, we've been around a long time.

So perhaps you, you could, um, uh, enlighten me and presumably the listeners with, with just tell us. Paul, what is Open Claw?

Um, let's start with the naming first. Originally called Open Claude. The people at Anthropic didn't like that for, uh, obvious reasons. Um, uh, then we had, um, claw Book, then we had Malt book. Now we have Open Claw, which everybody's happy with. Um, no,

Interestingly enough, the reason it was called, called Malt Book for just a, a couple of days, literally was, um, lobsters, obviously malt. Um, so let's look at the hype here. You know, there's this hype good and there's hype bad. Um, you get a lot of very excited, um, sort of I would say semi programmers talking about just how amazing this has been for them, how it's changed their life, revolutionized everything they do, and they're gonna be rich before bedtime.

So if you haven't. You probably should start, uh, looking at this, however, we've got some friends who's looked at in a bit more detail.

Actually not so much just open claw, but also. Vibe coding. I believe he uses Rept.

Um, one of the, one of those, um, contract reading things. Um. So he, but he's running currently over 20 agents, uh, to replace his go-to market team at Sutra, which is sad for them. I suppose.

I,

He now has. 10, 20 plus agents doing their jobs. And in his podcast he says, we replaced our sales team with 20 AI agents. Uh, and then he goes on to talk about what happens. Um, and he, he re he repeats the current model is, um, 1.2 humans or full-time equivalents, I guess, and 20 ai, a AI agents replacing 10 humans.

As a service?

If the tech's brand new. The guys that are hosting it are also brand new, so very unproven. Um, you know, and then people, uh, there's been a run, as you said on Minimax. Um, some people are going the whole hog and getting the really top of the range. Uh, apple workstations to do this are very serious. Uh, but certainly it's caused a little blip.

In the, uh, hardware sales. I also hear from other people, all you need is an old knackered, old laptop. It's good enough. You don't need to go for the, the, definitely

Absolutely. I mean, clearly everybody's worried about, um, the environmental impact of AI data centers.

What, what do we think about that at the moment?

And I know you've written a few academic treaties yourself. 6,000. Oh, did I have. 6,000 reads, that's like, what is that? Four, 400 an hour and a 40 an hour.

You can still get it on the internet too. It's

Observed behaviors include unauthorized compliance with non-owners, disclosure of sensitive information, execution of destructive system level actions, denial of service conditions. Uncontrolled resource consumption per your point. Identity spoofing, vulnerabilities, cross agent propagation of unsafe practices, and partial system takeover.

Oh,

Even in the States,

Now, in some cases they will be, but if they're not. It ain't worth it. And then I'm, I'm looking at this, uh, uh, I saw something on, uh, LinkedIn chap called Richard Lie. Uh, he's a senior full stack engineer. So you'd think he'd know what he's talking about. Uh, and he's asking the question quite validly, open claw users.

What's your monthly API cost looking like?

Most of the LLMs are not making money. Right.

This, that's open clause performing those 10 to 30 bucks a month. Yeah. Okay. Acceptable. For heavier daily use. Um, this is for coding. Um, the email automation that everyone is a use case. Everyone seems to like, please find everybody that's asked me this and send them an automatic response back. That's 24 7 working obviously.

And that comes, he thinks between six and $15 a day, which, you know, adds up couple hundred dollars a month. Um, and then runaway automations. This is where it gets creepy or scary. They can be 200 bucks a day and, and so he concludes that some people spend more on their AI assistant than their car payments.

It's an American way of framing things, but it's sort of interesting.

Say that doesn't work. Try again. I mean, you, you literally have to guide them and as he says this, you know, you can't drop an untrained agent in and just expect magic. He says it takes months of iteration on ongoing human oversight, uh, to reach the performance. They advertise. I mean, sort of, I get that.

But at the same time, if you, if you believe the height, you wouldn't think this was an issue.

So. It's preventing agents. Of course, in his case, he's using this to literally speak to, uh, potential visitors to the, to his event. Um, going off script.

Um, you know, and that could involve, you know, them making promises that the business just can't keep. Uh, that, does that sound like a junior employee? It certainly does to me. Um, and he frames it all as a trust and brand risk problem, uh, saying the agents can scale. But one or two bad interactions with key accounts and all of the gains are gone.

I mean, that's, that's a stressful situation, right? So open claw, what have we learned here?

You know, it, it will, it go far as basically destroying human relationships and trust and, and humans being unable, uh, to talk to each other and debate because all that has basically been taken over by agents. Um, and there's the perennial question here is. So what is, what is Jason's 10 unemployed salespeople gonna do with themselves?

It's probably a revenge on the nerds

By being great tool users, I mean, sorry, I've got, I've got a friendly local, uh, neighborhood, Raven, who would probably argue that actually they're pretty good with sticks

Um, you know, it will have its uses. Um, the issue as ever is, is diffusion. And you know, how, when and why will this enter, um, the, essentially the engines of production in our economy.

Ooh, the fact that's in Europe, you can actually have your plastic top attached to your plastic bottle for recycling. That's a pretty damn good thing, I think. Um, but the reality is, you know, we've talked about where Europe succeeds in tech, um, but we haven't talked about so far is some actual category leaders that are emerging from Europe and there's a load of them.

To build an application that you run an economy on, not one that you just scroll through.

Um, and that raised, I think about a billion recently at a 4 billion valuation. But, but, and, and, and Sequoia. You know, who you, or you have to take Sequoia seriously in anything they do. Um, they're one of the grand people of, of venture capital, uh, so they're putting their faith in, in this particular application.

And there's a lot, there's a lot more out there.

I mean, another example of that would be like Depot. They're doing something that everybody needs, which is, which is solving the problem of language translation in a, in a very connected world. And, and certainly for Europe, because we speak a lot of languages.

Um, maybe gone a little bit off the boil, but, um, they're looking at specializing in sovereign secure. And explainable AI for enterprises and, and, and governments.

Um, but I guess it raises the question of how much do you need to raise, right? The rise in solopreneurs, uh, literally folks, um, you know, vibe coding on their own, setting up businesses and uh, trying things out, and the explosion of vibe coding that drove, that means that you can create MVPs or minimal viable products very quickly.

Roll them out, try them. Uh, so it could be that the reason, the very reason that you needed the funding at the start, which was to. To buy some kit, to hire some coders, et cetera, is not there anymore. And so that would mean that big raises are not the defensive moat that many thought they were previously.

So the, the, the money. It's going less into the early development of, of the technology because that has been st starved of funds in the past, and they have had to develop their companies in a very lean way. But if you're gonna try and conquer the North American market, you need serious funding. You can't do it unless you fund it.

So you have a choice. You either get the funded and go to the states. Or you sell out. And you know, we've talked before about that in the past being a phenomenon of European tech development selling out essentially too early.

Technologies themselves and certainly a friend of the pod, Hussein Kasai. Uh, think so. He recently dropped out a LinkedIn post, um, I'll just read a little bit of this now. So he's talking about the, uh, 95% of pilot AI deployments fail. That's an MIT figure that everybody's looking at. Um, but this is the point I think is interesting.

Most teams, he says, are burning cash on the wrong bottleneck. Software is becoming a commodity. There's no shortage of agent builders. And LLM tools promising a hundred percent automation. Yet projects still stall because companies ignore the real constraint, the people who know the business and the work of wiring that knowledge into the systems that actually run.

I think he's onto something here.

And, and in the case of ai, it's when it really, really hits the real world. So, you know, translating messy business logic into workflows, you know, the permissions, the evals, and, and the operating rhythms. You know, you, you can't buy your way through this with, you know, forward deployed engineers. The, the mid-market just can't, I mean, it leaves a huge gap between buying a tool and seeing ORI.

Right. Um, and there's some early signs of course, that there's gonna be displacement of skills, like, you know, programming, basic enterprise, uh, sales. That's just. Order taking and low level marketing roles, certainly, you know, why would anyone employ someone to do SEO? It's not a job for a human. I, I mean, and I think AI is not playing out as many assumed, uh, certainly many, uh, who wrote big checks have assumed, and some of them are looking a bit nervous now, uh, as to whether they're gonna get paid back, but it's all still so, so early.

So we really couldn't, um, put an episode out. At this time, uh, in history without some reference again to the SAS apocalypse, you know, and, uh, what is it? The SAS apocalypse? Well, it's about AI disruption. It could be the AI contagion. Is this filling you with excitement or trepidation? You know, if you've, if you've been building a firm in SaaS and you know, you're, you're not in your first flush of youth.

Do, do you think it's, it's time to bail out or are you going full throttle, uh, to, to reinvent your company, to take it to the next wave of value? Um, certainly there's a lot of debate and a lot of confusion. Um, it matters because for years, SaaS companies built huge organizations are in for fun and all while their revenues just grew inexorably.

Salesforce Chief dismisses SaaS, apocalypse fears of ai, overtaking business software, and, and, uh, that Salesforce chief, as we know, is one of our favorite human beings, uh, in the world of category and tech. The amazing Mark Benioff.

Salesforce is in trouble. I mean, he was the original OG category disruptor. He showed Oracle and everyone else who was around at the time exactly how to do it. He bossed it. He bossed the move from client server to cloud, and now we're moving to AI and maybe he's got a target on his back.

Um, you know, it's, there is that law of big numbers. It's so much harder to grow fast when you're big already, but, you know, he's certainly coming out fighting and, uh, very, very bolshy. Um, this is when you know. There's a problem.

Uh, 1.5 billion operating cash flow. I can think of a lot of PE companies who would die for that. Uh, 29,000 agent force deals now. That's a product that's got agent in it. I'm not sure it's properly agent, but the point is they're coming out swinging here, right?

Now we know why he's arguing it, because, you know, as the Ari said, you know, how'd you get to to y? Well, I wouldn't start to X, but he is a X. Um, so, but he thinks, I mean, his, his basic argument is that AI has the potential to drive the performance utility of existing systems to new heights. A sort of SaaS AI hybrid Now.

Is he playing for time or simply reflecting reality? Right? So after all, you know your history, any technology has to diffuse into the economy and every wave of technology leaves its mark on the next. Now, again, simple analogy. The appearance of the jet engine didn't instantly mean piston engines disappeared.

Meanwhile, pure Jets dominated the military fighter and medium to long haul domestic categories, right? But the real issue is what is actually happening in the tech stacks. It, it's more what the market now thinks of those companies are worth given the, frankly, I believe, still imaginary. Impact of ar,

Right.

Um, so you know why? Well, investors are nervous clearly about headwinds generated by AI for traditional SaaS businesses as though they're somehow. One day where SAS is gonna exist and the next day when it's not, which is clearly nonsense.

And it sort of came out as what you might. Thinks, but there's some details that are worth thinking about. So he's doing this at an early stage. It's very e experimental. So his AI software, 20 firms had to be the net beneficiaries of AI because so far there's very few public AI companies outside of the hyperscalers.

Whereas, you know, a, a much bigger basket of public SaaS companies, uh, are available. Um, but. That aside the answer to fill a Phil structural repricing question over the last 12 months is sort of shocking if, if not a bit brutal. So if you look at his list, uh, only two of the 20 SaaS stocks are in positive territory.

The medium SaaS stock in Phil's model is down over 30%.

These is, this is sap, Salesforce, Adobe, ServiceNow, CrowdStrike. These are the companies are the backbone of enterprise software, right? So meanwhile, Phil's AI index, and this may come as a surprise, well, this bit shouldn't, if you know anything about the industry. But the impact might, uh, the AI index is, is currently being carried by three stocks and that's symbiotic up, up about 125%.

Alphabet up, 75% Palantir up. Nearly up a half is strip those out. And this is the interesting thing. The medium AI stock is down 12%, right?

Now we think, could it be that the market is losing faith in pursuit subscription economics? Because that has been the basis of this for, for a dog's age and. If AI can generate a marketing campaign, draft a contract, or triage a support ticket, what's the moat for the SaaS tool that used to own that particular workflow?

I mean, like, Phil, I mean, I, I, I don't think this means SaaS is dead, but I think the era, um, and I'm seeing this every day in m and a, the era of 15 to 20 x revenues. Uh, multiples, revenue multiples for, let's say 25% per annum growth in enterprise software is over and it's over forever.

Now, he tried to negotiate, renegotiate with Salesforce for a temporary license suspension during COVID, and uh, he had to, this is a time when he had to lay off over 40% of his team, a lot of whom were personal friends. Guess what Salesforce said, we've got a contract and we're sticking to it. Yes.

We need to keep our numbers up. Sorry.

A ZA is a curry

Um, and, and he was referring to, um, you know, maybe some of the companies we've talked to earlier and about how quite clear it was, um, that his path forward for his business to be successful was. Deeper and deeper customer engagement. Not, we're not, you know, we're not conceding on seats, not this is your price, like at a lump.

It has also decades of data, which any AI vendor would love to get their hands on, not for sale. Uh, and the point is, as you said just now, there will be some unexpected winners, uh, among, among all of the ai. Doomsters, some of those SaaS companies, which we talked about at the top of the, of this who grow off the back of, let's give you the next version.

You need to upgrade. Oh, you're not, you don't have the right package. Let's take you to the next package. The massive I'll do you a favor or the all you can eat deals that just sticks you with like shelfware that, that you end up paying for and, and, and don't really take control of. And the almost payola like relationship that some of those SaaS companies have with particularly with line of business buyers.

Although they should.

The new determinant of value.