I never got this about SaaS. People talk like it is a vertical. How is saying "I want to start a SaaS" different from saying "I want to start a one time payment ecommerce business?"
I say this btw from having worked at a SaaS business for years.
Because it is, for many founders. Those who think, "I want to start a startup, make lots of money. A SaaS business is the easiest to start and most investor-friendly." What the business will actually do is irrelevant, something to be picked along the way.
I see it as a vertical too - a column of a larger vertical I call "toilet paper companies" (with no offense meant to actual toilet paper manufacturers and sellers): companies run by people who couldn't care less about what the company is actually producing/offering, and have zero interest in the thing they're selling (beyond pretending to, for marketing reasons). Companies that would gladly switch from making rocket parts to making toilet paper, if they believed it has better long-term ROI.
And yes, people who think "I want to start a one time payment ecommerce business" (aka. "a web store") are a part of that larger vertical too.
Yes a company can be started along a founders personal passion... for this example, lets call it bikes [could be anything]. A founder following passions will create something around bikes - and in most cases fail due to saturated market, competition which they cannot outspend, etc.
Other founders approach business AS the passion. Surveying the competitive landscape, capital models, future growth potential - and marry that with building something for people, helping them solve their problems is the passion, creating a business structure designed around them.
Yes. And my feeling is, this is where our market economy has jumped the shark. People running a business for the sake of running a business are able to put more focus, effort, knowledge and skill into optimizing its success. Many ways of doing so involve reducing the value delivered to the customer, but compensating it with manipulation (e.g. more marketing) or abuse (e.g. lock-in, dark patterns) - and all advantages gained this way compound. Thus, in a fair competition, a business run for the sake of its value has little chance of prevailing against a business run for the sake of being a business.
The problem I see with this is that the value of a business to its customers, and to the society at large, is in the product or service being delivered. The business as an entity is incidental, a necessary evil to generate the value. Businesses being run for the sake of running them seems, to me, like optimizing for precisely the wrong thing - putting the cart before the horse.
It’s at a point where most consumers have to decide between one SaaS or another; it muddles retention. A one-time payment business is better these days (or a hybrid) especially if you have a product consumers are willing to come back for.
There's already a cash flow and profit motive in a business, so if a SaaS can demonstrate that it enables more value than it costs, there's a tangible advantage to paying for that service.
IMO saas is muddled so it’s meaning is not as much about the billing model anymore.
There are definitely tons of the type of company you’re talking about though.