November 27, 2025

AI SaaS Pivot: From Consulting Trap to $1M ARR | Cotera

57 minutes

Ibby Syed built his AI SaaS to $150K ARR—then realized he'd accidentally built a consulting business. Customers weren't logging in. They'd call with questions, get answers, and disappear. In this episode, early-stage B2B SaaS founders will learn how Cotera escaped the services trap and pivoted to an AI SaaS agent platform to hit $1M ARR.

Ibby breaks down exactly how to recognize you're stuck in a consulting trap and escape it. You will learn why his co-founder's 100-line OpenAI experiment outperformed months of data science work, and the painful decision to fire legacy customers to focus on building a real AI SaaS product.

In this episode, Ibby also reveals his "value-first" LinkedIn outbound strategy that books 25+ meetings a week, why AI SaaS products need ongoing utility (not one-time insights), and how teaching customers to build their own AI agents made the business scale.

This episode is brought to you by:

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🔑 Key Lessons

🚨 Early AI SaaS Revenue Can Be a Trap: Ibby hit $150K ARR but customers weren't logging in. The business looked like software but operated like an agency—a dangerous signal he almost ignored.

🔄 The Consulting Trap Kills AI SaaS Scalability: When every customer needs custom work, you're not building a product. If customers call for answers instead of logging in, you've built a services business.

💡 Let API Breakthroughs Trigger Your Pivot: Ibby's co-founder solved a customer problem with 100 lines of OpenAI code that outperformed a complex data science solution. That contrast made the AI SaaS opportunity obvious.

🎯 Deliver Value Upfront in Outbound: Instead of pitching, Ibby sends actual leads from a Reddit monitoring agent. "If you actually show value, people go crazy for it."

📉 Analytics Products Lack Stickiness: Dashboards answer questions, but once answered, there's no reason to return. AI SaaS products need ongoing utility, not one-time insights.

🛠️ Teach Customers to Build, Don't Build for Them: After the pivot, Cotera stopped doing custom implementations. They showed customers how to build their own AI agents—that's what made the AI SaaS business scale.

Chapters

Introduction

Favorite Quote & Mindset

What is Cotera?

Ideal Customer & Revenue Snapshot

Founding Story & YC Entry

Early Product & Customer Interviews

Outbound Strategies on LinkedIn

Effective Outbound Today

Common Mistakes with AI Outreach

Realizing the Need to Pivot

OpenAI API "Wake Up" Moment

Transitioning to AI SaaS Agent Builder

Product Differentiation & Competition

Prompt-Based Workflow Approach

Traction Before & After Pivot

Evolving Pricing Model

How to Contact Ibby

💌 Get weekly 5-minute SaaS insights: https://saasclub.io/email

SaaS Club Programs

Join the SaaS Club founder community: https://saasclub.co/plus

Build your $10K MRR SaaS: https://saasclub.io/launch

Scale from 6-figures to $1M ARR Faster: https://saasclub.io/mastermind

Get 1:1 async coaching from Omer: https://saasclub.io/accelerate

Resources

Full show notes: https://saasclub.io/463

Subscribe to the podcast: https://saasclub.io/subscribe

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By Omer Khan

4.8

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