Vibe Revenue: AI's Second Date Test

19 May, 2025

First dates have a certain magic to them. The nerves, the anticipation, the carefully chosen outfits and rehearsed stories. Everyone brings their A-game.

Enterprise AI sales demos have a lot in common with first dates.

Like that charming new connection across the table. They say all the right things. They solve problems you didn't even know you had. For a moment, you start imagining a future where everything is better, easier, more efficient. The possibilities seem endless. You're smitten.

Having had the privilege of working alongside founders building consumer marketplaces to infra and developer tools, and now AI-native products, I have come to realize there's a clear test for distinguishing between ephemeral enthusiasm and sustainable value creation. I call it the Second Date Test.

Because first dates – and initial sales – are usually the easy part. It's what happens next that separates companies built to last from those riding a temporary wave of what we call "vibe revenue" - the impulse-based, sporadic revenue, driven primarily by curiosity, novelty, or FOMO rather than by tangible business value and operational necessity.

Driven by Novelty Not Necessity

Today's AI agent landscape feels both familiar and unprecedented at the same time. Like the crypto era, we're seeing tremendous excitement, rapid funding rounds, and soaring valuations based largely on the promise of what could be rather than what is. Yet unlike that period, today's AI tools genuinely work, at least at the onset.

This combination makes it challenging for founders, executives, and investors to distinguish between companies building durable businesses around AI and those merely riding the wave of novelty-driven enterprise spending.

But how did we get here?

The moment ChatGPT launched, it triggered a shift. Teams that had been quietly experimenting for years suddenly found themselves in the spotlight, directed to "do AI" – immediately and visibly.

The social and career capital associated with being "AI-forward" was irresistible. And just like that, the perfect conditions for vibe revenue were born - a proliferation of pilots, proofs of concept, and experimental purchases around novelty rather than necessity.

This isn't necessarily bad. Every paradigm shift has an exploratory phase - the problem comes when companies mistake vibe revenue for durable long-term growth – and build their organizations, fundraising, and product strategies on a foundation that may vanish when the music stops.

Customer relationships built on novelty rather than tangible value are inherently unstable.

Telltale Signs You're on a Vibe Revenue First Date

The distinction between vibe revenue and sustainable revenue often becomes apparent not in initial sales conversations but in post-purchase interactions and usage patterns.

After a year in, we're now seeing the first generation of enterprise AI companies approaching their initial renewal cycles—the true moment of truth where excitement-driven purchases face the hard scrutiny of ROI evaluation.

This inflection point separates enduring businesses from temporary beneficiaries of the hype cycle. The signals are surprisingly consistent across the landscape.

#1. Substance over Spectacle

Curiosity revenue customers ask how it works. Real revenue customers stop asking how it works and start asking about their problems and their timelines.

Curiosity revenue customers anchor the conversation on how the product functions, rather than on their core business problems. This signals fascination rather than utility.

Solutions seeking problems rarely create sustainable value.

#2. Your biggest champion is VP of Innovation

When purchases come primarily from innovation teams or exploratory budgets rather than departmental leaders with P&L responsibility running operational budgets, you're often seeing vibe revenue at work.

While these budgets can provide valuable initial traction, they rarely sustain long-term growth. These teams are explicitly chartered to experiment with emerging technologies – not to operationalize solutions.

#3. Your usage curves flatline

What makes vibe revenue particularly dangerous is that it perfectly mimics the metrics of genuine product-market fit in the short term. The revenue graphs look identical for the first 3-6 months.

But there's a critical difference: with true PMF, these metrics strengthen over time. With vibe revenue, they inevitably weaken as the novelty wears off.

If your weekly active users drop by 60%+ after the first month or Net Dollar Retention doesn't measure up, you might have a vibe revenue problem.

These warning signs are often masked by continued top-line growth from new logos, while usage declines, expansion stalls, and preliminary renewal discussions encounter unexpected resistance.

#4. Your expansion hits a ceiling

Perhaps most tellingly, vibe revenue and real revenue show dramatically different expansion patterns.

Products delivering genuine value naturally expand within organizations through usually two out of these three vectors:

• User expansion
• Use case expansion
• Feature expansion

In contrast, vibe revenue products typically stall after initial deployment, with limited organic growth and expansion conversations focused on trying new capabilities rather than scaling existing ones.

Products purchased out of curiosity rather than necessity face natural ceilings on expansion. Without concrete value metrics, customers resist increasing investments, limiting the "land and expand" motion that drives efficient growth in successful enterprise software companies.

#5. You can't articulate metric movers for your customer

Vibe revenue often correlates with ambiguous or vanity metrics rather than concrete business outcomes.

When companies tout metrics like "number of workflows run" or "AI models deployed" rather than cost savings, revenue increases, or other business impacts, they may be measuring excitement rather than value.

Most tellingly, when pressed on specific ROI metrics, both the company and their customers struggle to articulate concrete business outcomes.

#6. More Theatrics, Less Action

Perhaps most perniciously, vibe revenue can fundamentally distort product development priorities.

The need to continuously generate wow moments to drive new sales pulls resources toward flashy capabilities rather than fundamental value creation, creating a reinforcing cycle that further entrenches the vibe revenue model.

This often comes with inflated expectations about capabilities and impact - where the gap between demo-driven expectations and operational reality can be substantial.

#7. You are supplementary to the core flow

Vibe revenue is surprisingly common in products which haven't firmly embedded themselves into critical business processes.

Early AI deployments are deliberately kept separate from critical systems to minimize risk. Moving away from these isolated deployments into core business processes is a significant hurdle that many products simply fail to clear.

Real renewal leverage is created when AI becomes deeply entrenched into core enterprise flows.

Renewal Cliff

The harsh reality is that the bill for vibe revenue always comes due. The initial wave of contracts signed in 2023-2024 are facing renewal decisions, creating what we call the "renewal reckoning."

The most immediate danger is the potential for catastrophic churn when initial contracts come up for renewal.

For companies built primarily on vibe revenue, the outlook is sobering: while typical enterprise SaaS churn rates range from 5-7% annually for SMB-focused products and 1-3% for enterprise solutions, companies built on vibe revenue often face renewal rates below 60%—a potential extinction-level event for their business models.

This is because renewal decisions involve different stakeholders, different questions, and different standards than initial purchases.

While vibe revenue can fuel impressive initial growth, building your business primarily on this foundation creates several significant long-term risks.

This renewal cliff is particularly dangerous because it often comes after significant organizational scaling based on apparently strong growth metrics, creating an unsustainable cost structure precisely when revenue begins to contract. But it doesn't have to be this way.

"We thought we were killing it with $8M ARR after 18 months. Then renewal conversations started, and we realized half our customers couldn't articulate what value they were getting. We ended up renewing only 58% of our contracts. It nearly killed the company."

These signals don't mean your company is doomed – but they do indicate that you're likely building on vibe revenue. And that means you need a deliberate strategy for the second date.

Second Dates: From Vibe Revenue to Value-based Revenue

Second dates have a different energy. The initial nerves from the first date have settled. You've run through your best stories. Now you're seeing each other a bit more clearly, with fewer filters and rehearsed lines.

It's not about impressing anymore – it's about connecting.

The same is true in enterprise AI. The second date comes in many forms: it might be the first renewal conversation, an expansion discussion, or simply the transition from pilot to production deployment.

Whatever form it takes, it's the moment where vibe revenue businesses face their moment of truth.

For AI companies currently benefiting from vibe revenue, the path to sustainability requires a deliberate transition toward value-based customer relationships.

As your product matures from an experimental tool to being an operational one, it must compete for budget allocated for well-established solutions with proven ROI. This involves more traditional buying centers like procurement, and line-of-business leaders who apply more rigorous ROI criteria.

Surprisingly, companies successfully navigating this transition also share several key characteristics:

#1. Anchor on Business Outcomes, Not Capabilities

The companies which make the leap are relentless about defining success metrics with customers before deployment and systematically track progress against those metrics afterward.

This involves:

• Establishing baseline measurements
• Embedding success criteria from day one
• Transitioning away from generic usage metrics to industry-specific and function-specific metrics

The best companies build value measurement directly into their products, creating dashboards that don't just track top-line usage but visibly demonstrate impact on key business outcomes—making value creation undeniable when renewal conversations begin.

This slows initial implementations but dramatically improves retention, as every customer can clearly quantify the impact when renewal conversations begin.

#2. Solve for the Second Purchase

For a recurring product, the first set of customer interactions is rarely ROI-positive. Real economic advantages are recurrent - when customers return unprompted, validating the product's enduring value.

Vibe may drive the initial sale, but the second purchase—whether expansion, additional use cases, or renewal—comes only from demonstrated value.

Most compelling companies structure their customer journeys with second purchases in mind, potentially sacrificing some initial growth velocity to ensure proper implementation, value realization, and documentation - an investment that pays dividends when renewal and expansion conversations begin.

#3. Focus on Workflow Integration

While vibe revenue often comes from impressive standalone capabilities, sustainable revenue comes from being deeply integrated into core enterprise workflows.

The most defensible AI companies invest heavily in:

• APIs
• Connectors
• Integration capabilities

These make their products essential components of operational processes rather than operating as standalone tools. This is often very deliberate undertakings, targeting internal processes unique to customers instead of just increasing touchpoints.

#4. Customer Success as a Strategic Function

Perhaps most importantly, companies that successfully navigate the transition from vibe to value invest in customer success as a strategic function rather than a support capability.

The best teams structure customer success as a value-creation function rather than a cost center, recognizing that the path from curiosity to commitment requires active partnership rather than passive support.

#5. Creating Data Network Effects

Companies that build sustainable value beyond the initial vibe often create powerful data network effects. These effects create increasing returns to scale and powerful barriers to substitution or disintermediation.

Identifying Winners in Post-Vibe Era

Amid all the excitement about AI, the fundamental principles around building a strong enterprise sales motions haven't changed.

Unit economics, customer acquisition costs, retention metrics, and expansion potential remain the core determinants of long-term success. Enterprise adoption problem continues to remain a change management problem. For investors evaluating opportunities in the AI agent space, distinguishing between companies building on vibe versus value is critical.

#1. Beyond Revenue Growth to Revenue Quality

While rapid growth remains important, the quality of that revenue provides deeper insight into sustainability. Contract Structure, Buyer Profiles, and Expansion Patterns are some key indicators.

Companies with slower but higher-quality revenue often represent stronger long-term investments than those with explosive but vibe-driven growth.

1. Value Definition: How clearly is the value proposition defined in business terms?
2. Measurement Systems: How systematically is value measured and communicated?
3. ROI Clarity: How clearly can the company articulate its ROI case with evidence?
4. Customer Testimonials: Quality and specificity of customer success stories

#2. Usage Patterns Rather Than User Counts

Raw user numbers often mask actual value delivery. More telling metrics include:

• Usage Depth/Durability
• Depth of Engagement
• Breadth of Adoption

These indicate successful transition from curiosity to utility.

1. Cohort Analysis: How NDR evolves across customer cohorts over time
2. Expansion Drivers: Whether growth comes from price increases, seat expansion, or new use cases
3. Contraction Patterns: What factors drive any observed contraction in customer spending
4. NDR by Segment: How retention varies across customer size, industry, and use case

#3. Evaluate the Second Sale Success

Perhaps the single most important indicator of sustainable value is a company's ability to drive second purchases—whether expansions, additional use cases, or renewals.

Companies that consistently convert initial curiosity into expanded usage have successfully bridged the gap between vibe and value.

1. Buyer Evolution: Evidence of successful sales beyond innovation-focused buyers
2. Deployment Status: Percentage of customers in production vs. pilot
3. Usage Patterns: Depth and consistency of product usage over time
4. Problem Specificity: Clarity about the specific problems the product solves

#4. Workflow Integration

As AI tools risk commoditization, the cost of switching between providers becomes a critical factor in retention and governs staying power of AI native products.

Companies that deeply integrate their solutions into customer workflows create natural barriers against replacement.

The goal is to become so embedded in customer operations that replacement would require significant disruption—not through contractual lock-in but through delivery of ongoing value that would be costly to replicate.

#5. Customer Success as a Strategic Capability

The most successful AI agent companies invest heavily in customer success as a value-creation function.

Evaluate:

• Executive Engagement
• Team Composition
• Methodology
• Rigor and outcome-focus of the sales and post-sales process
• Evidence of successful sales beyond innovation-focused buyers

#6. Evidence of Data Network Effects

The most defensible AI agent businesses create powerful data network effects where increased usage improves the product for all customers.

Key elements include:

• Correlation of Data Moats with Business Outcomes
• Data Sharing Agreements and Feedback Loops
• Benchmarking Capabilities

These effects create increasing returns to scale that drive sustainable competitive advantage.

Real Winners Are Just Emerging

The real winners are just emerging. Just as the most successful companies of the internet era weren't the high-flyers of the dot-com boom, the defining companies of the AI era may be those that build methodically on a foundation of demonstrable value rather than those that rode the initial wave of excitement.

While conventional wisdom focuses on which companies are acquiring customers fastest today, the more important question is which companies are building the capabilities to retain and expand those customers tomorrow.

The renewal reckoning will ruthlessly separate companies that have successfully bridged the gap from fascination to necessity from those still relying on the diminishing returns of novelty.

For founders navigating this landscape, the key insight is that vibe revenue isn't inherently problematic—it's often an unavoidable and even valuable component of early growth.

The danger comes from failing to recognize it for what it is and not deliberately working to convert it into more sustainable relationships.

While it's still important to value rapid growth, it's equally important to emphasize indicators of durable value creation and customer commitment.

For investors, the challenge lies in looking beyond superficially impressive growth metrics to understand the quality and sustainability of the underlying business.

The companies that will define the AI era will combine the ability to capture initial excitement with the discipline to convert that excitement into lasting impact.

The winners won't be those who capitalize on fear of missing out, but those who create fear of missing value.