Heller: AI application TAM is 1,000x larger when capturing labor budgets
Jake Heller · From Idea to $650M Exit: Lessons in Building AI Startups · Y Combinator · Oct 28, 2025 · at 6:19
Jake Heller, co-founder of Casetext, speaks at Y Combinator about market sizing for AI applications compared to traditional per-seat SaaS models.
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“Today, the actual amount of money that we already know people and companies are willing to spend is the combined salaries of all the people they're currently paying to do the job. And that number is like a thousand X bigger. You pay 20 dollars a month to solve a problem, for example, you know, pay a typical SaaS kind of subscription, but you might pay five or 10 or even 20,000 dollars a month to certain professionals to solve problems for you. So the amount of money that you can make with your new applications with AI has gone up by a factor of 10, a hundred, or even a thousand compared to what it used to be.”
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