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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

#101

Post by amelius »

cryo32 wrote: post #68
keiferski wrote: post #58

I work for a SaaS and we recently had an interesting situation where we lost some smaller customers but are in the process of getting dramatically larger ones at the same time. As in, we lost some customers that were roughly 20-people companies, but gained some customers that are 100+-people companies. The ones we lost seem to have just built our solution in-house, presumably with AI helping. Conventional wisdom woul…

Seen similar. They will be back when they realise the vibe coded SaaS run by two people in a trailer park isn’t what it looked like. A lot of the big SaaS stuff isn’t code or product. It’s support and hand holding.

And AI cannot do support + hand-holding?

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

#102

Post by hahn-kev »

FinnLobsien wrote: post #92

I think this is true, but there's also another thing here: The software market is incredibly complex, and much of the "SaaS is dead because I can vibe-code custom software" voices don't understand why certain products are bought. Let's take project/task management stuff. You can vibe-code a kanban board, task tracker with different statuses, and project folders quite easily. For my personal use, I can probably build…

Integrations are good. But most people don't need ALL integrations, there's just a couple that are show stoppers, and even then it probably doesn't integrate how you want it to. I think the future is a platform with a good data model that people can vibe code plugins on top of.

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

#103

Post by vdfs »

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…

Competitors was always possible even before AI, you could hire cheap and good developers you build almost anything even without AI, marketing and sales are more valuable when dealing with competition not devs/engineering

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

#104

Post by Grombobulous »

keiferski wrote: post #58

I work for a SaaS and we recently had an interesting situation where we lost some smaller customers but are in the process of getting dramatically larger ones at the same time. As in, we lost some customers that were roughly 20-people companies, but gained some customers that are 100+-people companies. The ones we lost seem to have just built our solution in-house, presumably with AI helping. Conventional wisdom woul…

Larger companies also have some other traits that lend themselves to prefer SaaS:

They usually need much more than an AI MVP product. They’ll tend to have a lot more different scenarios covered by one product category. For example, a small company looking for a PAM tool might only need to access Linux servers over SSH and PostgreSQL databases, while a large company might also have a mix of Windows servers, Oracle databases, and a complicated org structure with subsidiaries and acquisitions.

Large companies also need their SaaS tools to outsource compliance, not use pure functionality. They need to be able to tell customers “vendor XYZ handles ABC and they are certified under 123 standard.”

Finally, I also think larger companies, perhaps counterintuitively, have more of a cognitive limit or something you might call an aversion to a bus factor.

A small team with a more focused set of tools and products can more easily deal with something bespoke. Fewer people need to be able to work with something like that. Larger companies with bigger teams need to be able to tap into a labor market that can work with a more standardized toolset. Maybe they even deal with higher turnover.

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

#106

Post by jemmyw »

I've made my own bread for many years now. Every other day I make a loaf. Whenever I do buy one, even from a nice bakery, I'm disappointed and my kids hassle me to make it instead of buying.

It's not really relevant to the story though. Bread machines don't make great bread, although they can knead well so when I didn't have much money I'd buy a used bread machine as a mixer.

This breaks the analogy, but I think making your own is more convenient if you meet certain criteria: work from home and have learnt how to do it (ie past the learning phase). It doesn't take much time, but you need to be around. You can make the exact size and type your family prefers. You can make a pizza dough too just whenever you fancy a nice pizza.

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

#107

Post by rglullis »

maccard wrote: post #52
isawczuk wrote: post #19

I would disagree, but before let me acknowledge how well written article is and bread analogy is spot on. However, author complete discounted open source and ability to spin up open source software that will replicate almost 1:1 what SaaS offers without a pay-to-access requirement. Why spend thousands on integration with SaaS that you can take open source, vibe code missing features and start using? You say maintenan…

This has been true for years already though - why would anyone use confluent over just running Kafka themselves, or self host sentry, elasticsearch, gitlab, mongo, databricks or grafana?

If you were running a startup that had at least 1 paid developer, the cost of outsourcing these services were a rounding error compared to the actual salaries. If you wanted to skimp on these other things, you'd be saving maybe 2% of your budget.

Now, these supporting services can quickly become more expensive than the cost of a subscription to a powerful coding agent. You can get a beefy server on Hetzner for less than $50/month, self-host all of that and run entirely on open source alternatives. This is on the same order of magnitude as the cost of your LLM subscription. You can (theoretically) have your whole IT operations costing you a few hundred bucks per month.

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

#108

Post by skybrian »

lenkite wrote: post #98
skybrian wrote: post #27

My guess is that SaaS will be around, but it's going to look really different. Say there's a company that sells you a subscription to an issue tracker. At first, it looks just like any other web-based issue tracker. But, although you won't realize it at first, it's hosted on a Linux VM with a development environment on it. Each customer's app gets built from source. Then, when you want something changed, you send a m…

Why send a message to support ? Expose the prompt to your customer if all they are doing is just bouncing it.

I’m assuming the company has policies about what changes they can support. If that’s not true then it’s more of a hosting service.

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

#109

Post by FinnLobsien »

hahn-kev wrote: post #102
FinnLobsien wrote: post #92

I think this is true, but there's also another thing here: The software market is incredibly complex, and much of the "SaaS is dead because I can vibe-code custom software" voices don't understand why certain products are bought. Let's take project/task management stuff. You can vibe-code a kanban board, task tracker with different statuses, and project folders quite easily. For my personal use, I can probably build…

Integrations are good. But most people don't need ALL integrations, there's just a couple that are show stoppers, and even then it probably doesn't integrate how you want it to. I think the future is a platform with a good data model that people can vibe code plugins on top of.

Most people don’t need all the integrations (I‘d even say most need very few).

But:

1. As companies grow, customers continue to want more integrations.

If you imagine a massive matrix of companies and all the tools they use, you need to expand the number of rows where your product is a viable solution.

This matters for implementation now (any tool must work with your stack) and for your long-term prospect of using a product since companies expect to migrate, add, or retire tooling.

2. I think the problem with a vibe-codeable plugin platform is “what is a good data model” because that depends principally on what a tool is for.

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

#110

Post by j45 »

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…

Building alone isn’t the solution. Finding distribution is.
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