Love this @Aki, I think it is spot on. In the last year or so, whenever I was looking to signup for a SaaS tool, I tried to build what I needed directly with an AI tool. I didn't end up signing up with any SaaS, saved a ton of money and learned a few things along the way. We're at a turning point.
Was talking about this trend with a lot of people last week, and I realized the first order conclusion is actually incorrect. In a real sense, we aren't replacing SaaS tools 1:1 with AI. SaaS tools require things like users and UI with lots of forms. When we replace SaaS with AI, the resulting process can be radically simplified. It's not just a replacement, it can be a 10x improvement.
Good post. I wrote a similar essay a few weeks ago, referencing similar ideas as the YC intern + invoicing product: a lot of SaaS tools are just data transformation services, which become commodities (or easily-DIYable) in a more LLM-enabled world. As a general matter, margins tend to come down over time -- the fact that SaaS has for so long had 80%+ gross margins should stand out as an unstable equilibrium to any outside observer. https://loeber.substack.com/p/18-the-end-of-schematic-businesses
Thanks, I like your data transformation analogy. Intuitively I would claim 90%+ of SaaS platforms do things that any human could do, but it would be annoying and time-consuming. When you can have a free humanlike AI doing those things, why pay for software at all?
Nice article. How do you think email-as-a-service (saas) will be impacted? You used to be able to spin up servers and send email way back when (and you can still do that yourself - in theory) but email services don't really rely on the product itself, rather the reliability and deliverability of emails. You pay for deliverability. I think I've answered my own question ha.
I think X-as-a-service, with X being something other than just software still has a place. The reason in many cases would be that you are paying for access to or outsourcing something that you don't want to manage internally. Could be emails, or something like payments (Stripe), financial risk, insurance, hiring, logistics, etc..
Love this @Aki, I think it is spot on. In the last year or so, whenever I was looking to signup for a SaaS tool, I tried to build what I needed directly with an AI tool. I didn't end up signing up with any SaaS, saved a ton of money and learned a few things along the way. We're at a turning point.
Was talking about this trend with a lot of people last week, and I realized the first order conclusion is actually incorrect. In a real sense, we aren't replacing SaaS tools 1:1 with AI. SaaS tools require things like users and UI with lots of forms. When we replace SaaS with AI, the resulting process can be radically simplified. It's not just a replacement, it can be a 10x improvement.
Good post. I wrote a similar essay a few weeks ago, referencing similar ideas as the YC intern + invoicing product: a lot of SaaS tools are just data transformation services, which become commodities (or easily-DIYable) in a more LLM-enabled world. As a general matter, margins tend to come down over time -- the fact that SaaS has for so long had 80%+ gross margins should stand out as an unstable equilibrium to any outside observer. https://loeber.substack.com/p/18-the-end-of-schematic-businesses
Thanks, I like your data transformation analogy. Intuitively I would claim 90%+ of SaaS platforms do things that any human could do, but it would be annoying and time-consuming. When you can have a free humanlike AI doing those things, why pay for software at all?
Nice article. How do you think email-as-a-service (saas) will be impacted? You used to be able to spin up servers and send email way back when (and you can still do that yourself - in theory) but email services don't really rely on the product itself, rather the reliability and deliverability of emails. You pay for deliverability. I think I've answered my own question ha.
I think X-as-a-service, with X being something other than just software still has a place. The reason in many cases would be that you are paying for access to or outsourcing something that you don't want to manage internally. Could be emails, or something like payments (Stripe), financial risk, insurance, hiring, logistics, etc..