The Tailwind Labs’ Problem
Credits:
As many of you might have already heard, Tailwind Labs (creator of Tailwind CSS) is facing some financial trouble, to say the least. And all of that after making such a big impact on so many projects, especially in the last couple of years. Let’s take a look at it.
TailwindCSS’ Impact
Without getting too much into the different ways of doing CSS in our projects, it’s clear that Tailwind CSS is a widely used and loved library. It has an estimated
Weekly Downloads ~26 Million (as of early January 2026)
Monthly Downloads ~75 Million+
Total Downloads have surpassed several billion cumulatively (with massive ongoing growth)
In addition to that, there have been various other derivative UI kits such as Daisy UI, Flowbite, Aceternity UI, and Retro UI. These have led to so many profitable businesses and made Tailwind CSS hugely popular among new developers.
The Problem
So, what happened? If Tailwind CSS is so widely loved and deeply embedded in the ecosystem, where did things go wrong?
Tailwind Labs’ root project is Tailwind CSS, which is completely free and open source. They make money to continue operations and maintenance through a couple of options.
- Catalyst — A UI kit targeted toward developers who want to build quickly.
- Tailwind Plus — A package including Catalyst, pre-made UI blocks, and templates.
- Sponsorships — Companies and individuals supporting the development.
All of these monetization routes go through their site. This is where the whole AI disruption hit them hard.
A big part of AI-assisted coding—or “vibe coding”—is this “built-in search” from LLMs. And we’ve been noticing this in other places too. For example, there used to be tons of tutorials on YouTube and tons of activity in forums like Stack Overflow. Platforms and content like that have seen a big decline since developers no longer need to look things up the old way. It’s simply much easier with an LLM compared to performing a Google search and opening a couple of tabs.
And I’ve been guilty of this too. After intentionally staying away from AI for a long time, I started incorporating LLMs into my workflow since late last year.
I’m someone who uses an LLM as a glorified auto-complete—or auto-complete on steroids. For productivity, I prefer getting help and assistance with writing my JSX, while I’m very pedantic about business logic and tests.
THIS, of all things, started to cause problems.
This all sparked when a developer requested a better llms.txt file so AI agents could do better. And the founder had to mention how this would feed into the problem.
Since both seasoned developers and people trying “vibe-coding” stopped spending their time on the documentation, conversions dropped dramatically.
The maintainer even shared that traffic to their documentation site has dropped by 80%. This led to a significant loss of revenue for the team—to the point that they had to lay off 75% of their already lean team.
The Honor System & Value Capture
What makes it worse is that their business model is wholesome (for lack of a better term).
As consumers, we’ve been complaining for years about things like endless subscriptions, not truly owning what we buy, predatory monopolies, reactivation fees (even for something as simple as a Peloton bike), not being able to buy perpetual licenses for tools like Adobe the way we used to, fragmented streaming services that now cost more than old-school cable, intrusive advertisements, and companies selling our user data in one way or another to make money.
On the other hand, we have companies building good, sustainable, simple, and free (or very reasonably priced) tools—like 37signals, Drizzle, and Cake to name a few.
They provide a clear, descriptive free tier with no hidden fees, fixed reasonable pricing for paid tiers, and even a true “buy once” option instead of subscriptions (which is rare these days).
TailwindCSS has clearly provided so much value to software running in production. Be it a real estate listing, a MRR chasing indie hacker’s SaaS project, an AI wrapper or anything. But that didn’t lead to commercial sustainability for TailwindCSS
Call To Action
I believe if we want to keep seeing more good companies and products that focus on users without bad practices, we have to be a bit more intentional with our choices. I think of it as voting with money. If you believe in local production or manufacturing, buy locally produced things (even if you need to go a bit out of your way). If a project has provided you any value and you want it to be maintained, support it in the ways you can.
We are already seeing some big names hopping in as sponsors and individuals stepping up, but the project could use more support.
But unfortunately, we have people like this, too.
As for me, I bought Tailwind Catalyst since I have been using Tailwind CSS for a couple of my projects. I also got a copy of Refactoring UI, as I will be working more on front-end development and product design this year.
I urge you to support Tailwind Labs in one of many ways if they have provided value to you.
Cheers
