Have We Reached SaaS-turation?

Like many investors, I love a good SaaS business. But have we flooded the market with so many startups that customers are about to rebel?

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I was amazed when I saw how many subscriptions this founder was paying for…just for himself! That leads us to an interesting thread by Molly Wood, Managing Director at venture firm LAUNCH and co-host of This Week in Startups:

But if we look more closely at Gergely’s example, we find something interesting. He’s actually happy paying for all these subscriptions!

Automating so many tasks with SaaS may be why Gergely can keep this a 1 person business. Otherwise, it might be a 20 person business with way higher costs.

And while any business may look to cut subscriptions when times are tough, Gergely notes these subs are one of his smallest expenses. For him and many other CEO’s, cutting them may do more harm than good.

I agree with Molly that tech startups can be over-SaaSed. Many startups look to other startups as their first customers.

After all, startups are early adopters and can make a quick decision. That makes them an ideal first market for a SaaS product.

But in the economy as a whole, I think we’re actually dramatically unde†rusing technology.

Take SailPlan, an amazing SaaS company that tracks emissions from ships.

Competitors just provide a rough estimate after the fact. SailPlan tracks emissions in real time and can even give you suggestions of how to lower them.

And of course, lowering those emissions means lowering your fuel bill.

Before SailPlan, most emissions tracking was done with rough estimates in spreadsheets. If ships used a SaaS solution, it was basically a tarted up version of the same spreadsheet.

Shipping is an industry that desperately needs technology. And it’s not hard to think of 100 others.

Oh and by the way, Molly and I just happen to be co-investors in SailPlan! 🙂

Like any industry, I think SaaS will face headwinds in 2023. But a scalable software product, high margins and recurring revenue are a winning combination.

And with much of our economy barely touched by technology, they have a lot of room to run.

What do you think the future holds for SaaS businesses? Leave a comment at the bottom and let me know!

Have a great weekend everyone!

More on tech:

Is 2023 the Best Time to Invest in Startups?

The Magic of Milestone-Based Funding

Is SBF Laundering Money As We Speak?

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Photo: “CNET’s Molly Wood” by NVIDIA Corporation is licensed under CC BY-NC-ND 2.0.


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