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The bread paradox: why convenience always wins, and why SaaS isn't doomed

joanwestenberg.com

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Re: The bread paradox: why convenience always wins, and why SaaS isn't doomed

#41

Post by brabel »

davidpapermill wrote: post #28
notarobot123 wrote: post #23

The risk for SaaS isn't that customers will build their own but that the barrier to entry for competitors is lower. The Chorleywood process created mega bakeries that displaced regular bakeries because they changed the economics. AI is doing the same and fundamentally changing the economics of production. What used to take years and huge teams to build can be built by much smaller teams much faster. SaaS isn't going…

I don’t agree. I think businesses including SaaS are not primarily their tech, but are mostly composed of other functions: sales, marketing, customer success, product management, strategy etc. The value is actually more in these other components than in the code.

For some businesses yes, but for many no, the software and the infrastructure are all that matters and hopefully they don’t touch what works and don’t add features no one asked for.

Re: The bread paradox: why convenience always wins, and why SaaS isn't doomed

#42

Post by keeda »

theturtletalks wrote: post #26

All these arguments ignore that the bread you buy today is not always the bread you’ll get years from now. Don’t we all know the cycle by now? 1. Company pours money and resources to create good product 2. Good product gets customers and those customers use word of mouth to get product viral and even more customers 3. Eventually the company has to make a profit and in that pursuit, they make the product worse by addi…

That's more the fate of consumer services though, where the product is typically given away for free and the need for revenues and growth eventually leads to the enshittification you describe. TFA is about SaaS products, which tend to be subscription-based and so usually are immune from those pressures.

SaaS products do have their own problems sometimes, such as feature creep and bloat and uptime, but those are less insidious.

Re: The bread paradox: why convenience always wins, and why SaaS isn't doomed

#44

Post by notarobot123 »

davidpapermill wrote: post #28
notarobot123 wrote: post #23

The risk for SaaS isn't that customers will build their own but that the barrier to entry for competitors is lower. The Chorleywood process created mega bakeries that displaced regular bakeries because they changed the economics. AI is doing the same and fundamentally changing the economics of production. What used to take years and huge teams to build can be built by much smaller teams much faster. SaaS isn't going…

I don’t agree. I think businesses including SaaS are not primarily their tech, but are mostly composed of other functions: sales, marketing, customer success, product management, strategy etc. The value is actually more in these other components than in the code.

Sure, but code isn't the only barrier that's been lowered. A competent entrepreneurial team can also scale their sales, marketing and customer success workflows with AI.

I'm not saying business is easy now. I'm saying that a small team of smart people can do a whole lot more with the tools available to them. You still need strategy and vision (or the ability to copy someone else's playbook) but execution is a lot cheaper.

Re: The bread paradox: why convenience always wins, and why SaaS isn't doomed

#45

Post by sausagefeet »

skybrian wrote: post #33
sausagefeet wrote: post #29

Earlier quoted context omitted.

Maybe I'm a luddite, but this seems far fetched, to me. I just don't see a path for LLMs to make all kinds of changes to a codebase from non-technical people, correctly. Yes, LLMs can do amazing things, but they still don't have a mental model of what a thing is doing and make all sorts of weird decisions that are not what you want. I believe LLMs are going to make the bar for a SaaS you would pay for, as a company,…

That's why I assume it goes through support. A support person checks if the prompt is reasonable (and maybe rewrites it).

Again, I just don't think that is possible. If you have, even, 100 customers, you're going to have 100 unique code bases? How can a human tell if a prompt is reasonable for a particular codebase? And who is going to train those support people? Who is going to ensure they are adding tests that actually test real and correct things?

Re: The bread paradox: why convenience always wins, and why SaaS isn't doomed

#46

Post by keeda »

The underlying MBA principle is that companies strongly prefer to focus on their "core competencies." This makes sense because the distraction to a business could be much costlier than the extra money spent in outsourcing non-core functions.

This is basically also why the cloud business was thriving even when on-prem is much cheaper in monetary terms, and why the trend will probably extend to cloud AI providers even when open weight models get better. (As an example, Linux is free, but MSFT makes a ton of money off it by renting out the hardware it runs on.)

That said, there will likely also be a very large volume of internal SaaS-y apps that enterprises will vibe-code simply because nothing on the market meets their needs and/or price point.

Another possibility is enterprises "remixing" existing SaaS apps for custom functionality by adding their own vibecoded layers on top of the SaaS endpoints. Either invoking official APIs where available, or by less official means like using custom browser extensions. Now that could lead to some interesting dynamics...

Re: The bread paradox: why convenience always wins, and why SaaS isn't doomed

#47

Post by a_t48 »

The common question I get asked about building my SaaS: "What's to stop customers from making their own?"

Sure, if you want to put an equal amount of time into what I've built, be on the hook for maintaining the infra, probably diverge from what will end up being a stable spec, go for it. It won't be as good, it won't be as fast, you will be fighting Claude at every corner just like I did to build the right thing. But consider this: people still pay for Dockerhub even though anyone can spin up any number of open source registries. SaaS is no where near doomed, people will always pay to not have distractions from their actual core business cases.

Re: The bread paradox: why convenience always wins, and why SaaS isn't doomed

#48

Post by theturtletalks »

keeda wrote: post #42
theturtletalks wrote: post #26

All these arguments ignore that the bread you buy today is not always the bread you’ll get years from now. Don’t we all know the cycle by now? 1. Company pours money and resources to create good product 2. Good product gets customers and those customers use word of mouth to get product viral and even more customers 3. Eventually the company has to make a profit and in that pursuit, they make the product worse by addi…

That's more the fate of consumer services though, where the product is typically given away for free and the need for revenues and growth eventually leads to the enshittification you describe. TFA is about SaaS products, which tend to be subscription-based and so usually are immune from those pressures. SaaS products do have their own problems sometimes, such as feature creep and bloat and uptime, but those are less…

I disagree, business SaaS also gets enshittified mainly because of feature creep like you mentioned. Business SaaS starts by solving problems for 1 type of business, but as they try to cover more use cases, the product gets worse for the original use-case.

Re: The bread paradox: why convenience always wins, and why SaaS isn't doomed

#49

Post by throwaway27448 »

notarobot123 wrote: post #23

The risk for SaaS isn't that customers will build their own but that the barrier to entry for competitors is lower. The Chorleywood process created mega bakeries that displaced regular bakeries because they changed the economics. AI is doing the same and fundamentally changing the economics of production. What used to take years and huge teams to build can be built by much smaller teams much faster. SaaS isn't going…

> AI is doing the same and fundamentally changing the economics of production.

Not really. SaaS were already trivially replaceable; it's just slightly cheaper now. But the line item is still a line item.

> What used to take years and huge teams to build can be built by much smaller teams much faster.

It takes years to develop a product, but only weeks or maybe a couple months to replace. You're greatly overestimating the work that goes into building a clearly defined product.

The expensive part for producers is figuring out what to sell and how to define the market. The expensive part for customers is burning capital while chasing after customers who would rather not think about the tools they've already committed to paying for. AI just burns the fat off of an already lean process.

Re: The bread paradox: why convenience always wins, and why SaaS isn't doomed

#50

Post by fragmede »

Yeah, it comes down to pricing, and the quality of the bread. If the bread is fine, then things are fine. It's when the bread is a bit moldy or kinda soapy that, y'know what? I'm gonna make my own damn bread. Or if it's priced weird. What am I paying for, really? If I have to pay for weird upgrades, or something else that sticks in my craw, I'd rather do it myself. With software, I can have Claude shit out a thing and post it to GitHub that only does 10% of there existing product, but it's the 10% that I actually use.
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