After YC’s CEO says Zoho could be outcompeted by custom-built tools, Sridhar Vembu fires back with his reply.

A public spat has unfolded on X between Y Combinator CEO Garry Tan and Zoho founder Sridhar Vembu after Garry Tan suggested that various advances in “vibe coding” could eventually render bundled SaaS companies like Zoho irrelevant.

The exchange began when Tan posted a screenshot of a news story quoting Vembu’s view that vibe coding “oversimplifies” software development.

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Conflict of ideas

Responding to the report, Garry Tan wrote: "Zoho’s business would be first to be competed away by people building their own custom software built by people using @Replit @emergentlabs and @Taskade." 

He also added, "Why pay $30/seat/month for over bundled SaaS when soon even nontech ops ppl can vibe-code a custom solution in a weekend?"

Sridhar Vembu hit back directly. Questioning the premise that vibe-coded tools could threaten Zoho, he asked: "If our business would be the first to be competed away by vibe coded apps, why are we seeing such rapid customer growth (exceeding 50%) right now? And why don't we see vibe coded email or spreadsheet or accounting app or messaging apps yet?"

Vembu’s explanation 

The Zoho founder argued that long-term durability in software requires more than rapid prototyping. 

He said his own R&D focus is on combining compiler technologies with AI to deliver “a quantum leap in programmer productivity” while ensuring security, privacy, and compliance guarantees, certain areas he believes vibe-coding tools overlook. 

“Without those guarantees, vibe coding just piles up tech debt faster and faster until the whole thing collapses,” Sridhar Vembu warned.

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Vembu made a public bet

Vembu also took a jab at Garry Tan and stated: “Of course, for people like Garry Tan, tech debt is to be pawned off on unsuspecting acquirers.” 

He later added a direct challenge:“Let me make a bet with Garry Tan: we will outshine and outlast his vibe coding companies!”

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How netizens reacted?

Netizens were divided. Indian users hailed Vembu for taking a stand, while also pointed our merit in Garry’s statement. 

One user commented,“Vibe coding looks exciting, but from enterprise experience, it’s rarely a plug-and-play win. Large orgs pick ecosystems (Microsoft, Zoho) for predictable SLAs, integrations and lower long-term maintenance. Build fast but plan for scale, impact > hype.” 

Another wrote: "Love the focus on sustainable tech and real productivity gains, this is the future of coding!"

A third user added: "Finally, some homegrown co actually has a leg to stand on and challenge a Silicon Valley company, but Garry Tan means well, though."

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