Ask HN: Are SaaS businesses going to zero? | Hacker News Reader

Ask HN: Are SaaS businesses going to zero?

2 pointsnomilk11 comments

For at least 15 years, MindBody (booking app for yoga/pilates studios) cost ~$400 AUD/month for basic functionality (there existed cheaper plans but those missed critical features).

Today, it goes for $89/month - a 78% price reduction in just a couple of years

I can only guess this is due to market saturation due to it being relatively low-hanging fruit for startups to nibble at.

Such a dramatic fall in price makes me wonder if the end-game is a price war which sees all SaaS prices fall, potentially to $0 for those with low/no switching cost

View on HN

At the moment, the economics of software are out of whack. It's not about agentic replacing traditional painstakingly coded applications, but more about the massive influx of capital, and the subsidies from the newcomers to try and gain ground and demonstrate aggressive growth. In the early 2000's, Facebook's growth was described as "selling dollar bills for 90 cents." That is where we are now. Nobody will know for sure where all this lands until companies have to demonstrate their worth through real profits and stable growth.

Personally, I think this is the trend we'll see.

AI doesn't mean everyone will build their own software, at least not in the next 5-10 years. It means the unit economics have completely changed.

If you're charging $100/seat - you need to completely refactor your business. We might see the end of the $1 million+/yr enterprise software contracts.

There is a nice quote I read in the book "Zero to one" from peter thiel, "Under perfect competition, in the long run no company makes an economic proft". Thats whats happening with SaaS.

The bigger shift might be pricing moving closer to actual usage/value instead of traditional per-seat SaaS pricing.

Yes. Probably not free, but yea, whatever it costs to keep the agents running to keep the lights on.

could be anything: competition is better now and legacy app looks outdated / less desirable, studios are having hard time and saving money, etc

people are tightening their belts. Sadly for SaaS, you can't eat software, and neither can it keep you dry and warm.

Most will go to zero.

ya that's crazy

Wait until token based pricing. And then the open AI / antropic IPO (This will be the top).

claude

Reply on news.ycombinator.com