How to Tell If Your AI Vendor Will Still Be Around in 3 Years

Many AI vendors selling software today will not exist in three years. Some will be bought. Some will change focus. Some will run out of money.

You must know which vendor you are picking before you build your business around them. Most evaluation frameworks ignore this risk.

Use these four tests to check their survival:

The Business Model Test Check if their money makes sense at their current size. • Ask about their runway. Confident vendors give clear answers. Those who dodge the question are a risk. • Look at pricing. LLM costs are high. If their price seems too low to cover costs, it will change at renewal. • Check customer mix. A vendor with 20 large enterprise clients is different from one with 500 small ones. If one client holds 60% of their revenue, the vendor is fragile.

The Product Defensibility Test Can a big competitor copy them easily? • Proprietary data is a moat. A prompt that wraps a basic model is not a moat. • Workflow integration matters. If the tool is deep in your daily tasks, it is harder to replace. • Deployment models help. Tools that allow self-hosting for security solve problems others cannot.

The Team Continuity Test Software relies on people. • Check leadership experience. Founders need to know how to support large companies, not just build code. • Look at engineering depth. A tiny team building complex tools creates high technical risk. • Watch hiring speed. Consistent hiring shows growth. Shrinking teams show trouble.

The Customer Retention Test The best sign of life is renewal. • Ask for Net Revenue Retention (NRR). A healthy business has NRR above 100%. • Talk to real users. Do not just use the vendor's reference list. Find users on LinkedIn who were not invited to the call. • Ask why people leave. Honest vendors explain their churn.

Do not rely on one single sign. Look at the whole picture. Ask yourself: will this product still be supported for the next three years?

The best vendors build things that are hard to copy and have enough money to grow. Find them before you commit.

Source: https://dev.to/mirasloan/how-to-tell-if-your-ai-vendor-will-still-be-around-in-3-years-5d1j

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