The Second-Order Effects of Vibe-Coding

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The Second-Order Effects of Vibe-Coding

It’s still early in 2025, but if there’s one buzzword gaining serious momentum, it’s “vibe-coding.” Originally coined by Andrej Karpathy, vibe-coding describes a programming paradigm where AI isn’t just a co-pilot, but the primary coder. This shift from imperative programming (step-by-step instructions) to declarative AI-driven development (simply stating what you want and letting AI figure it out) is reshaping the software industry at an astonishing pace.

And the numbers back it up. Platforms like Lovable, Bolt, v0 by Vercel, and Replit Agent have hit multi-million dollar ARR in just a few months. Founders like Anton Osika (Lovable) are reporting jaw-dropping adoption rates—1,500 new customers a day, adding ~$30,000 MRR. Skeptics may point to high churn rates or question the long-term viability of AI-led development, one thing is clear: the total addressable market (TAM) for programmers is expanding massively.

And that means new opportunities—not just for developers, but for entire industries. Here, we break down three key areas poised for exponential growth in the coming years:

1. Vibe-Coding for X: Expanding the Paradigm

The first wave of vibe-coding platforms has focused on web-based applications, making it easier than ever to build public-facing apps with minimal human coding.

But there’s an even bigger opportunity: bringing vibe-coding to other platforms and specific use cases.

• Mobile development – Imagine an AI-native system optimized for building iOS/Android apps without needing extensive Swift/Kotlin expertise.

• Game development – AI-powered tools that integrate seamlessly with physics engines, making real-time rendering and mechanics adjustments nearly effortless.

• Enterprise applications – Vibe-coding for internal business apps, automation workflows, and data pipelines could unlock massive efficiency gains.

• 3D modeling & animation – AI-native tools that allow creators to describe a scene in natural language and have AI generate and refine it automatically.

Each of these use cases demands a specialized approach, but the fundamental principle remains the same: shifting from imperative (step-by-step coding) to declarative (high-level intent-based) development.

2. The Boom in Ancillary Tooling

As more people become AI-powered developers, we’ll see an explosion in new apps, products, and services.

But every app—AI-built or not—still needs essential infrastructure, including:

• Authentication & security

• Payments & transactions

• User analytics & observability

• Ad networks & monetization

This presents a golden opportunity for companies that integrate seamlessly with vibe-coding platforms.

And the early winners are already emerging:

Supabase (a popular hosted Postgres solution) is experiencing massive growth thanks to its integration with Lovable.

Resend, a transactional email provider, has seen a surge in users from these AI-native platforms.

For infra and dev tools companies, being easy to integrate into AI-led coding workflows is now a critical distribution strategy.

Tomorrow’s equivalent of Mixpanel or Stripe will be a one-click integration in vibe-coding platforms, offering analytics and payment solutions without developers needing to write a single line of backend code.

3. The Rise of AI-Native Agencies

Vibe-coding isn’t just changing how software is built—it’s changing how services are delivered.

A new wave of lean, AI-driven agencies is emerging, offering full-service software development, prototyping, and consulting at a fraction of traditional costs.

For example, Lovable has already partnered with multiple agencies that leverage its AI-powered workflow to deliver ultra-fast product development. These agencies:

• Operate with significantly smaller teams

• Handle more clients per employee than traditional development firms

• Reduce costs on change requests and iterations, since AI makes prototyping near-instantaneous

This trend mirrors the rise of Shopify agencies in the late 2010s, where specialized service providers built, optimized, and managed e-commerce stores.

The difference?

These AI-native agencies will be leaner, faster, and significantly more profitable, managing thousands of clients with minimal overhead.

The Next Phase of Software Development

Vibe-coding represents more than just an AI-powered productivity boost—it’s a fundamental shift in how software is built and who can build it.

With AI moving from co-pilot to primary developer, we’re seeing:

• The rise of AI-first programming tools

• A new generation of ancillary infrastructure solutions

• AI-native agencies offering faster, cheaper, and more scalable software development

As with any paradigm shift, there will be growing pains—churn rates, skepticism, and questions around long-term viability.

But one thing is clear: The TAM for software developers just exploded, and companies that embrace this shift early will define the next decade of innovation.

Welcome to the age of vibe-coding. 🚀

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Peeyush and Mohit

Disclaimer: The views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author's employer, organization, committee or other group or individual.