I started SaaS companies in 2013 and 2021 – how things have changed

https://blog.airplane.dev/i-started-a-saas-company-in-2013-and-2021-heres-how-its-changed/

by zuhayeer • 5 years ago

682 213 5 years ago

blog.airplane.dev

TradingPlaces2• 5 years ago

Nobody ever mentions profits. That hasn’t changed

quickthrower2• 5 years ago

The company is the product. The exit is the profit.

raviparikh12• 5 years ago

There are lots of public SaaS companies where the founders and even investors have continued to hold the vast majority of their shares long after the IPO. LPs have much higher tolerance these days for longer periods of illiquidity for the VCs they've invested into. People are going "long" more than ever.

raviparikh12• 5 years ago

Plenty of people mention profits! Companies are rewarded for efficiency and profitability (more so than they were 10 years ago). E.g. see the massive valuations relative to ARR and growth that Zapier, Mailchimp, and Calendly all achieved over the last year.

That said, if you can spend $1 to get $1 of ARR, or even $2 to get $1 of ARR, and your company is doing 100% net revenue retention or better, then you likely will make more money over the long term selling equity, going unprofitable to spend on growth, and getting paid back over then next 12-24 months due to the nature of compounding growth / exponentials.

rushabh• 5 years ago

The big question is, if customers are going to stay over a long run. Also the assumption is that SAAS companies are to keep growing, while I see them all converging on the same market / same dollar spend (CRM, Support, Workflow). There will be consolidation at some point, and it won't be pretty.

asdff6• 5 years ago

Companies are rewarded for efficiency and profitability

Uber would have been wiped out by now if it came out 20 years ago. Burning cash on the promise of future profit that still hasn't come around is a recent concept. Even companies like Standard Oil and Walmart would make money from other streams when they are putting a price squeeze on some competitor. It blows my mind how much slack these companies are getting, probably just because companies operating this way are a dime a dozen these days so there is some safety in numbers if TINA of places to invest in tech.

TradingPlaces2• 5 years ago

The article mentioned profits not once. Everything you just said is the bullshit companies say to get investors to pretend profits don’t matter.

lr4444lr• 5 years ago

Profits!? That's a dirty word for startups: means you aren't spending enough on R&D or growth </sarcasm>

LurkingPenguin• 5 years ago

Seed rounds are bigger: At Heap, we raised $2M on a $12M cap after having a working product and some early traction. Today, it's not uncommon to see a pre-product company raise $5M on $25M or even higher. However I think there's still a ways to go–SaaS outcomes have grown in size more than 10x in the last 8 years, but seed valuations haven't climbed 10x.

Why would the valuations climb 10x? This makes sense given the author's second observation:

There are way, way more SaaS companies and getting initial traction is harder

The rounds are bigger because more money is needed to compete. But investors would lose their shirts if they multiplied the valuations by 10-fold.

raviparikh12• 5 years ago

(I'm the author of the post - thanks to whoever posted this to HN!)

This is a good point, if probability of success decreased 5x while average outcome increased 10x, then a 2x increase in seed valuations would be reasonable. I don't actually know the differences in probability of success / expected value for the typical seed stage startup, but anecdotally it doesn't feel less likely. It is definitely harder to get off the ground, but I see a lot fewer companies (anecdotally) stumbling in the "middle" part of the journey between $2M to $100M in ARR or so, whereas I feel like in the past a lot more hot SaaS companies used to stall out. So I think that washes out against the harder initial stages.

donnythecroc• 5 years ago

You are no.1 on HN. Would be interested to see if this drives more customers for you than launch post!?

bpodgursky• 5 years ago

The world is bigger; more people are part of the economy; the average person is wealthier; the average person is more productive; the average person or company spends more of their income on services than in 2013.

In a winner-take-most market, it's easier for the acquirer to leverage a successful SaaS company 10x what they could in 2013. This doesn't surprise me.

NmAmDa• 5 years ago

Average person in united states maybe

1cvmask• 5 years ago

It seems from article that the big change is how VCs now accept product-led growth today versus the past.

czbond8• 5 years ago

I'm a founder at heart; I've loved creating - and have a software background. I really resonate with the paraphrased vibe of way, way more SaaS companies. I've been looking outside of SaaS to potentially harder science companies rather than SaaS for future endeavors.

It is too easy to: splash page, Wordpress, "rails new saas" for a product and then try to sell via SEO / outbound, etc that the field is quite saturated - and un-discovered niches are a lot harder than say 2013.

shostack• 5 years ago

Can you help me understand how a billing model gets saturated exactly?

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.

soared2• 5 years ago

In this context saas isn’t actually the opposite of say “one time purchase software” but more analogous to “low hanging fruit low cost easy problem to solve with software”.

IMO saas is muddled so it’s meaning is not as much about the billing model anymore.

withinboredom2• 5 years ago

My bank account is filled with SaaS products. Want to read the news, get a premium “bank” account, automate stuff, watch TV or movies, etc? pay up buddy. It’s only a few more of your dollars a month.

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.

jacquesm2• 5 years ago

People talk like it's a vertical, but for plenty of people it actually translates to 'I want passive income'.

TeMPOraL5• 5 years ago

People talk like it is a vertical.

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.

czbond8• 5 years ago

I personally use SaaS as shorthand for a business which mainly simplifies, eases, or improves business or personal problems or processes with software - and get paid for it.

fnord77• 5 years ago

same boat. The enterprise SaaS market is so absurdly saturated and AWS/Azure/GCP have the shovel market locked up.

Time for something completely different.

czbond8• 5 years ago

Absolutely agree. The model of recurring revenue as applied to more than software is still powerful and I believe under explored given everyones focus on SaaS, mobile, enterprise, etc.

playcache• 5 years ago

You build your SaSS applications about on wordpress?

czbond8• 5 years ago

No - but I've seen enough people begin that way.

kakkan3• 5 years ago

I relate with your sentiment. I'm from a product background, not a research one. What do you think is the best way to eventually transition into deep tech companies over the next five years?

samhw2• 5 years ago

What do you mean by 'deep tech'? And what role do you actually want to move into?

erikbye6• 5 years ago

It is too easy to: splash page, Wordpress, "rails new saas" for a product and then try to sell via SEO / outbound

Not even that, these days people simply start newsletters...

Still, I wouldn't write off the payment model. People seem to prefer subscriptions to one-time payments. If they didn't, Netflix, Spotify, etc., wouldn't enjoy the popularity they do.

tonyedgecombe4• 5 years ago

I’m willing to bet there are a reasonable number of people who are willing to pay $10 a month but would balk at a one off $100.

pdimitar3• 5 years ago

That's a very niche and small cherry-pick that you did.

I practically know only 2 people willing to pay monthly sub for note taking or various such trivia. 99% of everyone I know is very conservative about monthly subs. Sure Netflix / Spotify / YouTube Premium / etc. are worth it but most apps out there really are not.

Plus there's such a thing as a "sub fatigue" these days. People feel everybody is after a chunk of their wallet each month and are starting to resist. I don't even mean myself or other tech-savvy people; I really mean mothers and grandmothers who have no clue but still don't want to pay up all the time.

roland35• 5 years ago

I agree, I think it is way more competitive in any pure software cloud type space. I think if you can bring something else to the table such as hard science, domain expertise, hardware, or electronics, it may eliminate a lot of the competition.

acegopher• 5 years ago

I don't think SaaS and "potentially harder science companies" are necessarily opposed. I think there are still a lot of un-discovered niches that marry the two. Anything hard is going to take longer, but also result in less competition.

PragmaticPulp• 5 years ago

I had a conversation with a traditional retailer who was afraid of using Heap for analytics because we used AWS for hosting, which is owned by Amazon, their biggest competitor.

It sounds foreign now, but when AWS was new this happened all of the time: Companies who saw Amazon as a competitor in some way usually had someone, somewhere in management who was afraid of using anything hosted on AWS.

It sounds silly now, but I remember having a lot of these conversations back when AWS was new. Typically, the older the company's management, the more likely they were to be afraid of using AWS for anything related to their business.

jcims2• 5 years ago

I wouldn’t call it silly at all, it just depends on how strategic your failure is to Amazon’s success. At some point you become materially exposed to their decision making.

lostcolony• 5 years ago

Anyone in the traditional retail space is trying to avoid Amazon. A. Because anyone in the retail space likely DOES have older management, and B. They're not entirely wrong; even if Amazon doesn't pull the rug out from under them, they're still indirectly writing checks to help fund their largest competitor.

qaq• 5 years ago

Why is it silly? you van use other clouds and not prop up your direct competitor

raviparikh12• 5 years ago

Agree that you can choose not to use AWS yourself if you see them as a competitor. But to refuse to use any service that itself uses AWS would severely limit who you can work with.

Aeolun• 5 years ago

It’s like not buying a candy bar from the closest supermarket because you own one yourself (no matter how distant).

danjac2• 5 years ago

AWS' byzantine billing is also good grounds for reasonable caution, especially for a new startup.

option_greek• 5 years ago

Not silly at all. Premise is pretty simple: why would you fund your competitor's cash flow (either directly or indirectly).

GCP and Azure successfully acquired a lot of retailers and ecommerce providers for this reason. This happens even today with medium to large size competitors of Amazon.

asdff6• 5 years ago

It's not like AWS controls the sole source of fire. Companies these days have wised up and know they can roll their own 'good enough' solution and customers won't have much choice to do much about it but keep feeding the beast. I remember when I genuinely believed the netflix creation myth, of this fabled streaming service that would swallow up the world and have all movies and TV in one place. Companies who ultimately hold all this IP and have these heaps of cash wised up, wait on the sidelines, poach people, and come out with stuff like Peacock thats good enough, and customers have no alternative if they want to watch stuff that only comes to that particular platform. Streaming services are the most visible examples of companies rolling their own solutions to not be beholden to other companies, but its extending to all sectors of tech.

danrocks• 5 years ago

On the streaming topic: piracy is becoming rampant again due to subscription fatigue and player fragmentation. So there is an alternative if people don't want to pay up.

onion2k3• 5 years ago

AWS promise they don't look at their customers data, but if it turns out they actually are then putting your Amazon-competitor-business analytics data in AWS would be incredibly bad for you.

Would you really trust Amazon enough to take that risk?

There would need to be an massively good reason to do that, and "incrementally better analytics" isn't it.

oxfordmale• 5 years ago

AWS are not looking at customers data as it would be professional suicide. It would only require one disgruntled employee to leak this. Realistically they don't even have to as a proxies version of this data can be bought.

htrp3• 5 years ago

Except Amazon (retail) apparently does look at customer data to figure out what AmazonBasics products to launch

bserge• 5 years ago

It sounded silly 5 years ago, now it sounds very smart.

handrous3• 5 years ago

This still happens. Same for GitHub/Microsoft and Azure. Probably Google, too, though I've not seen that personally. Haven't seen it for CloudFlare but there definitely should be companies close enough to the spaces they're growing into that they'd be well-advised not to send traffic through them if they can avoid it.

There's probably room for niche services selling "we're not hosted on 'the cloud', aren't owned by anyone likely to be in competition with you, and control our hardware" but there's a lot of overlap there with companies/owners/managers who take this to the point of not trusting anything that isn't self-hosted (because there might be security problems, nevermind that DIYing is at least as likely to have such problems, or because they fear vendor lock-in to a perhaps unhealthy degree), so it might be a hard market to sell to.

vmception• 5 years ago

Regarding growth sizes, the market is at a place where improvements are immediately applicable.

Ask crypto/defi service providers how fast their organizations grow, people “ape” $2 billion into a product as consumers within days or minutes!

It just gets leaner and faster!

rubiquity• 5 years ago

SaaS is all grown up now!

forgingahead• 5 years ago

Seed rounds are bigger: At Heap, we raised $2M on a $12M cap after having a working product and some early traction. Today, it's not uncommon to see a pre-product company raise $5M on $25M or even higher

I'm seeing this as well and it's eye-watering how inflated the valuations have become for pre-product companies with no clear distribution levers.

The consequence of this easy money has been a lot of flash-in-the-pan startups that seem more stable than in eras past (they've got lots of employees, a nice office, and some good press coverage, they must be legit!), but actually can flame out pretty quickly after a couple of years of serving actual customers.

As a result, there are more buyers who are just more wary of new SaaS companies to begin with - they have the legitimate concern of whether you'll be around in a few years to continue supporting their needs, or just disappear with a nice "It was a great journey" blog post.

While capital has become commoditised, the market is still yearning for more good tools, and SaaS is still a good delivery method with acceptable pricing. Founders should certainly think very carefully about why they are raising before they do so, and maybe even skip it altogether.

kbumsik2• 5 years ago

Off topic, but what is the theme in the main screenshot? I often saw that kinds of design (much rounded, much gradient shadow) in new SaaS.

nrabulinski• 5 years ago

It’s called neumorphism and it got super popular around 2020 but, from my personal observations, it went away as fast as it came. Don’t get me wrong, there’re still a lot of designs that follow this language but I haven’t seen it utilized much outside of mockups.

kbumsik2• 5 years ago

Thanks for the insight. I personally thought it is kinda Skeuomorphism + Flat and I was right!

xupybd• 5 years ago

Wow that Airplane app looks amazing. It's a little on the expensive side for the size of company I'm in but would be a no brainer for a bigger company.

raviparikh12• 5 years ago

Thank you! If you send me a note at ravi@airplane.dev I'm happy to discuss a discount or I can bump up the free limit for you. We definitely don't want price to be a blocker to try it out.

thom• 5 years ago

Currently getting this on iOS:

Application error: a client-side exception has occurred (developer guidance).

scrollaway• 5 years ago

Seconding the parent's post on it looking amazing. I'm going to try it out now for our B2C app, we were looking to build some internal apps and you might be saving us a lot of time there.

dools• 5 years ago

$5m pre product raises!?

Where is that shit happening. I have a product with customers and can’t get 6 figures.

belter2• 5 years ago

Its happening in the land of milking people who got lucky, have a lot of money, and think it was by their own merit. Or people who have money from somebody else who is burning in their pocket and so on. You think any of these billion dollar companies is profitable?

zo1• 5 years ago

The cynical person in me would say that may be because you haven't had the right "introductions" yet.

belter2• 5 years ago

Also there you have milking for introductions :-)

danjac2• 5 years ago

tbf nor can Uber.

hinkley• 5 years ago

Product MVPs have a much higher degree of polish and companies wait much longer to launch

Translation: people are distancing themselves from the MVP concept.

adelpozo• 5 years ago

Interesting, why do you think would that be? Difficult to reuse code/infra from the mvp for the final product? Or is it that the mvp is hard to define and ends up being the product? None of the above? Interested to hear the thoughts behind the comment

withinboredom2• 5 years ago

MVPs used to look like the rest of the web. Now people expect a “design” in a product. The web looks much different than it did even 10 years ago, but browser defaults haven’t changed much in 30 years.

zuhayeer• 5 years ago

Yeah, still feel like MVP is a great way to start. If people want your product without it being polished, then you know you really solved a problem. And not just any problem, but an overlooked one (because nothing solving this is polished yet).

another-dave• 5 years ago

Or that MVP isn't just about your product in isolation but also about the marketplace you're going into.

If there's no-one selling drinks in the park on a hot day, a homemade lemonade stand might do good business. If there's a café and a food market in the park & 5 ice-cream shops nearby it would be harder to get the same outcome for the original product

rozenmd• 5 years ago

In my experience from building the 191st uptime monitor (+ site speed & puppeteer checks), MVPs don't work for established product ideas.

Customers expect polish, and they expect a lot more functionality than the bare minimum.

For context, I kept a twitter thread detailing what I worked on, and when the customers started coming: https://twitter.com/RozenMD/status/1364881512500404224?s=20

Bjartr• 5 years ago

Customers expect polish, and they expect a lot more functionality than the bare minimum.

That's why it's the minimum viable product, and not the bare minimum product. Determining what's needed for viability is an important part of the MVP design process.

libertine2• 5 years ago

Couldn't it just be that resources are more abundant and know-how is more spread?

You have way more designers, software devs, libraries, etc, now in comparison to 2013. The trend will be for these things to be almost "commodities"... even for solo founders, you don't need to know design to copy/inspire yourself from a plethora of examples out there.

With no code tools you can quickly slap things together to validate stuff, before outsourcing the development to somewhere else if you need to get things going, or hire a dev.

Things are just easier and more abundant, so to make the classical "MVP" or a more polished "MVP" probably doesn't require that much extra effort/resources.

Also you need to realize that standards have changed, some small things that were valuable are now taken for granted.

hughhopkins2• 5 years ago

I think Ravi (the author) is spot. The difficulty is the table stakes features for SaaS products have increased so much as the industry has grown and so have expectations.

That being said I think people have erred way too much away from the MVP concept and aren't fundamentally testing the biggest unknown with their MVPs. Of course you're going to need SSO at some point but you don't need it for a MVP.

mongodude• 5 years ago

Hope my founding team read this post! The bar to run a company is so high these days that you can't settle for anything mediocre! Also, if you have a product market fit in 2021, consider yourself lucky and focus on scaling it. It is getting very difficult to find a niche where you can scale as you would in 2013.

doppp• 5 years ago

Hmm, sounds like PLG is the hot new buzzword to describe the search for PMF while burning VC cash (wow I realized I used 3 acronyms in this sentence). This article is clearly for people building SaaS with venture capital.

What about founders who don't go the VC route and choose to bootstrap instead? PLG seems to be out of the question unless one has a long runway. I reckon even for the bootstrappers, things have changed between 2013 and 2021.

MrGilbert• 5 years ago

For the tech-guys on HN like me:

PLG = Product-Led-Growth

PMF = Product-Market-Fit

(VC = Venture Capital, but that should be already common knowledge)

While I found it quite entertaining to imagine that the Polynesian Leaders Group is searching for the Pacific Music Festival while burning Venture Capital cash, I had to dig a bit for the acronym's explanation to come up.

pramodbiligiri• 5 years ago

Going by articles like this - https://www.productled.org/foundations/what-is-product-led-g... - PLG indicates that purchase and adoption patterns in B2B SaaS have changed in a way such that salespeople are less important than they used to be.

I'm not convinced. In B2B the user of a product in a company is rarely the purchaser of the same product. Has that relationship pattern changed significantly? That article at least doesn't talk about that.

ayewo• 5 years ago

Agreed.

The definition of PLG offered by the article suffers from magical thinking by anthropomorphizing products (unless we are now capable of making products that are sentient):

“Product-led growth (PLG) is a business methodology in which user acquisition, expansion, conversion, and retention are all driven primarily by the product itself.”

blfr• 5 years ago

Is OP lurking? I know this is not TRL but I'd love to read a post for this exact timeframe for changes in technology: frontend, backend, infra.

raviparikh12• 5 years ago

(I’m the author!) That’s a great idea, I might try to write something like that!

bjarneh• 5 years ago

3) Product MVPs have a much higher degree of polish and companies wait much longer to launch

The Airbnb story where they launched with no payment solution to get a feel for the market/product always fascinated me. Maybe those days are over, where you can hack something together quickly, just to try it out?

SCUSKU• 5 years ago

Fundamentally, I still believe that if you can find the right problem to solve, even if it is a hack, people will use it no matter what. But seeing as more people have spent resources on looking for those opportunities, I would assume the fruit is much higher on the tree now, so to speak.

ThePhysicist• 5 years ago

My impression is that every SaaS that is successful on ProductHunt (PH) or HN gets copied dozens of times within a few months. That's especially true for technically simple products. A good example is maybe privacy-friendly web analytics: I think products like Fathom and Simple Analytics were the first to really go after this angle (undoubedtly there were others before them though), and in less than 6 months dozens (hundreds?) of copycats turned up with exactly the same USP and the exact same look & feel. And interestingly it isn't the first mover who seems to win that market but rather the company with the most agressive (and sometimes outright misleading) marketing. So being the first doesn't guarantee your success anymore, at least if you don't have enough time to grow undisturbed.

Personally I'd avoid posting products on PH or HN for that reason and instead focus on growing organically in a niche market where you're not immediately discoverable by copycat founders. In general PH feels more and more phony to me and I think there's a lot of astroturfing going on.

amelius• 5 years ago

Personally, if something is easy to copy, I wouldn't want to work on it.

corobo• 5 years ago

What are you working on?

tonyedgecombe4• 5 years ago

Years ago I got an email from a budding competitor. They wanted to create a similar product to mine but couldn't figure out how. Would I help them?

debarshri5• 5 years ago

You are absolutely right. Sometimes, it is not about technically simple things. It can be complex but hot on trends. For instance, I have been tracking PaaS like platforms for past 2 years on hacker news. Every month, you have atleast one PaaS or on-prem heroku deployment platform on Show HN. Similarly, I see lot of airtable clones once in a while.

artembugara2• 5 years ago

I think it was Justin Kan who tweeted something like:

"if someone else could copy your product, and they have more customers/grow better, then you aren't the right fit for it"

Also, nowadays, product is a small part of your company. Can you remember the last time you saw someone having an initial traction just because they have a great product?

You can copy Airtable/Notion as long as you want, adding some more features to it. But it's not how it works, I believe.

mrtksn3• 5 years ago

True but this is valid only for the established companies. A solo dev or bunch of people with a small seed round don't have any of that moat.

AFAIK it's a common practice to copy up and coming indie games from the app store top charts because an established team would have the muscle to catch up and surpass the new ones. I don't see why wouldn't be possible to do it to any other product that is not an overnight success but shows healthy organic growth. I think this was also the idea behind huge early funding rounds, that is to create a large early success so that it's not copied right away.

debarshri5• 5 years ago

One of the trends I have been seeing, especially in devtool space is there products built by agencies and there are products built by companies where it is their flagship product. When you have a situation like this, then it dilutes the value proposition of your product. Even though, agency driven product might be serious or might not be seriously pursued, it definitely make the space red ocean.

I wonder how people generally combat this kind of scenarios.

jcims2• 5 years ago

It might be a way to alleviate some regret after the fact, but that type of thinking seems like a great way to induce paralysis.

arnaudsm• 5 years ago

I'd pay decent money for a Notion competitor that doesn't take 10+ seconds to load.

erikbye6• 5 years ago

People tend to think startup or new product when they hear SaaS, and forget that many mature businesses are turning their domain software into a SaaS. This is currently huge. Internal software that was previously only used inside the company. Now they get to recoup on developer cost by opening it up to the market as a subscription service. At least that's the idea.

dspillett• 5 years ago

That could work in my favour though. I've got a couple of things I've wanted for a while, that existing projects don't quite work like but I have no time to make myself. Maybe if I publish an MVD (minimum viable demo!) making it look like an attempt at an MVP, people will copy the idea and do it well enough I'll be able to use it…

The main argument against that working is that I'd prefer OSS self-hosted options — no one chasing the quick buck is going to go that way!

anandrm• 5 years ago

Every product is a copy of something .. You have a platform and build something new thats it ..

josephd79• 5 years ago

I know right, show me an application that hasn't already been made before? This is nothing new, been going on for the last 30-40 years.

daolf• 5 years ago

I believe that only a small fraction of SAAS ever makes it to HN and ProductHunt.

HN and PH audience is 99% of Marketing and / or Tech people.

Coincidentally, those people make product for Marketing and Tech people, and of course promote on website visited by Marketing and Tech people.

But basically anything outside of those two realms feels completely under-addressed by SAAS:

- industry - public services - waste management - etc

mostly "unsexy things".

mromanuk• 5 years ago

But basically anything outside of those two realms feels completely under-addressed by SAAS: - industry - public services - waste management - etc

I hear this a lot. Couldn't be that everyone (makers/founders) addresses these PH/PH spaces because they are packed with early adopters instead of the other industries where every new innovation will be taken with FUD?

And that's the cause that it's under-addressed. It's hard to convince "classic" industries to adopt new SW stuff and new paradigms.

wongarsu• 5 years ago

The availability of SaaS is also a product the values of the various industries. There are lots of marketing-oriented SaaS because it's an easy market to sell to: they are very open to experimenting and taking risks, make decisions very quickly and have near limitless budgets. In industries where decisions happen slowly and budgets are limited it's harder to get a foothold, harder to grow, and if you do succeed you're less likely to be a fast-growing exciting startup that a venture-oriented place like HN talks about.

cushychicken• 5 years ago

HN and PH audience is 99% of Marketing and / or Tech people.

That's why you should probably avoid posting here if you don't want copycats.

Serve a totally different market, and make it to the front page of that market's HN. Then you're in business.

You can post to HN as a victory lap/vanity metric when you've got a moat of traction. :)

kirso• 5 years ago

This! The biggest opportunity is in SaaS for industries where techies don't see problems or were not really digitized yet. The setback is that they are pretty boring and you have to many times deal with different people in terms of sales. But thats where the gold is.

lovetocode2• 5 years ago

Agreed. I built an app that was in the Top 5 to Top 10 paid business apps on the Apple App Store for about a year. It causes so much drama with copy cat developers from the the south east pacific. I had people steal my name on the App Store and other victims of these copy cats start to turn on each other because they all think they are stealing ideas from one another. It is absolutely bonkers.

moneywoes• 5 years ago

Could you please detail more? Heavily interested

marvinblum• 5 years ago

Funny, because I've started a privacy-friendly analytics tool [0]. It really happened by "accident", as I initially tried to solve my own problem (analytics for my website without an ugly cookie-banner) and only later discovered there were many existing solutions.

Now that I went all-in on it, I think there is much more to it than what you can see at a first glance. There are a lot of dividing factors, like support, features, ... or in our case a unique design and good support for resellers (agencies) and technical people (server-side integration). We have been called copy-cats, but that doesn't mean different people won't find similar solutions for the same issue like it happens with us or in science from time to time.

[0] https://pirsch.io/

marban• 5 years ago

Is PH really still relevant these days? Based on the comments it feels more like a circle jerk of a dozen die-hard users and the rest being semi-automated spam mostly from India. No tough questions, just self-congratulating Emojis.

open-source-ux• 5 years ago

Luck is also part of the equation, perhaps more than people want to acknowledge.

To take Hacker News as an example, there are many excellent projects posted in the 'Show HN' section that get no traction at all. And then there a few lucky ones that suddenly take-off. There's no "wisdom of the crowds" moment that propels one project to success over another because it's more worthy or excellent - it really is random in so many cases.

We think success = product excellence: how else could a product rise to a leading position in the market or to such pre-eminence unless it was better than the alternatives? But the mountain of successful products ranging from mediocre to terrible quality shows that product excellence isn't always the key ingredient to a product's success.

Lest this all sounds too negative, I would never discourage anyone to pursue their product idea. But when it comes to promoting a product, developers should be cautious about relying on just one source for promoting their product (Hacker News, Product Hunt etc).

afpx• 5 years ago

There have always been copycats. It’s better to worry about usability and business model.

Before Google became a monopoly, it was just one of many search vendors. Google’s advantage was that they made search easy and simple enough for grandma to understand and use it.

enumjorge• 5 years ago

Google is not a technically simple product though, and not something a competitor could have copied in a matter of months.

nogridbag• 5 years ago

Google's advantage initially was speed. The other search engines were slower on dialup and riddled with advertisements.

lumost• 5 years ago

Seems like this might be the driver behind longer timelines. Lean approaches work if you don’t expect others to clone you and catch up. If you expect to have copy cats it’s better to be 2 years ahead.

tchock232• 5 years ago

For a laugh, go and search for product feedback board (upvote/downvote feature requests) tools on Product Hunt.

I swear there is an exact, cheaper replica of tools like Canny every day (which itself was a clone of UserVoice before they went enterprise).

Staking your big launch of something truly novel on Product Hunt is just asking for clones with 2-3 months.

tchock232• 5 years ago

I know this thread is over a day old now, but the very next day yet another of these feedback board tools launched - and is currently #1:

https://www.producthunt.com/posts/leanbe

I don’t understand how the Product Hunt community keeps upvoting the same product idea, cloned 100x. It feels like it is being gamed somehow, because I can’t be the only one that sees this happening…

SmellTheGlove3• 5 years ago

I still don't understand the purpose of Product Hunt - and I don't mean this in a sarcastic way. I'm hoping someone can tell me where it fits into the ecosystem vs. what I think my role is.

I buy software, as a customer, both in my personal life as a consumer and also in my role at a tech company where I'd buy more B2B software. I don't use PH as a resource, but I hear about it a lot. What's it's role in the startup ecosystem / what am I missing out on?

debarshri5• 5 years ago

PH gives you a score, something #1 product of the day. It can be used as a benchmark or reference to investors and customers that this is product has a market need. It is kickstarter for software except the money part. It is also gives you some kind product and market validation. But like any other system, you can game it.

timdorr• 5 years ago

It's like Show HN and Reddit combined. Comments and upvotes on brand new products and services.

For founders/makers, it's obviously a great source of traffic, leads, and exposure for your product.

For users, it's more about being in on the ground floor with a hot new product. Sometimes that means getting an exclusive deal or free features. Other times it's just the exclusivity of being one of the first customers for something that may be very big one day (think lower user IDs on Twitter or GitHub, for instance).

I think a lot of people like playing with new toys, and PH is a good way to do that without having to spend actual money buying something new to play with. I think it fits in the same niche as those that watch unboxing videos. It's fun to play with new stuff.

mderazon• 5 years ago

For me, PH is reduced to alternative.to these days. I only use it to research alternative products for ones that I know

aabbcc1241• 5 years ago

I usually think if the business cannot sustain once the idea is copied, it's not a good business idea.

Maybe it's fine to continue as a hobby project, but for business, if it cannot sustain without a significantly large market share, or have too competitive environment, better to work on other problems.

tonyedgecombe4• 5 years ago

You don't compete on just the product though. I've had companies with plenty of VC money outbid me on Adwords and employ lots of cheap labour on SEO. Often their product offering looks quite weak.

You are right though, if that's the environment you face you just need to move on.

theindianappguy• 5 years ago

I agree

amir-h• 5 years ago

Do you feel like VCs in general are now more open to funding close to 1 year of runway just to get an MVP out and test product market fit? or is it your background as a 2nd time founder that drives VCs to trust you with less PMF proof?

raviparikh12• 5 years ago

People are now raising “pre-seed” rounds in the $250k to $1m range that are intended to do exactly what you describe. Generally from a group of angel investors though rather than an institutional VC.

matsemann• 5 years ago

Ironically, the increase of SaaS businesses have made me more vary of actually using them.

It seems like so many wants to have a successful semi-solo SaaS that pay their bills. They aren't longer a way to sell a product and a startup idea, but an attempt at a lifestyle. Some people throw up smooth landing pages for barely working products, and quickly move on to the next idea if it doesn't stick.

How can I invest time and money in using a product if I'm afraid the founder will bail after a few months?

erikbye6• 5 years ago

How can I invest time and money in using a product if I'm afraid the founder will bail after a few months?

Would you rather a risk a much bigger one-off payment? For software? Sure, it works now, but it might never get updated, and eventually stop working altogether due to OS updates or other factors.

The one-time payment model is a much greater risk to the consumer than monthly subscriptions.

Otek• 5 years ago

The one-time payment model is a much greater risk to the consumer than monthly subscriptions.

Short term - yes. But long term? It seems there is no point in planning to use a software for years now. And I don't like to migrate my knowledge base to new tool, every 2 years. But is there a way other than mastering org-mode on weekends?

Hallucinaut• 5 years ago

I don't agree with this at all. If a software product doesn't get upgraded you have 1) time to look for an alternative according to your own priorities 2) ways of mitigating potential risks (if it's a security problem, like airgapping the solution) 3) the ability to make value-based calls on the risks of not having updates

With SaaS you have all of these same constraints (as there's no guarantee they update the service either), plus the risk that they just turn it off one day on a timeline you can't control, plus potential risks that they will leak your data if they don't maintain security (or want additional money), and with the added risk/cost that they may decide to no longer support something you need due to a forced "upgrade" (like API compatibility).

TeMPOraL5• 5 years ago

For software? Sure, it works now, but it might never get updated

That's often good rather than bad, as many products are optimized away from usability over time.

and eventually stop working altogether due to OS updates or other factors.

There are means to mitigate that (e.g. running software in VMs), that work fine as long as software isn't fighting it.

Arguably the biggest factor causing software rot, making one-time payment risky, is purposefully adding dependencies on vendor's servers (e.g. for "collaboration") where they don't belong[0]. This is also what is used to justify the continuous stream of updates - whereas in reality, it's just there to create a plausible reason for why a perfectly good product now requires a subscription. Software that's designed to be paid one-off from the start doesn't require these kinds of anti-features, and doesn't rot nearly as fast.

[0] - It's famously said that Dropbox was doomed from the start, because it's a feature, not a product. Unfortunately, that view is part of what's making SaaS so incredibly user-hostile. Syncing data is a feature completely orthogonal to applications, and even operating systems. There's no need for a SaaS vendor to make their own synced storage for app data, unless they're purposefully trying to entrap their users.

gwbas1c• 5 years ago

Would you rather a risk a much bigger one-off payment?

That's a false choice. The problem with the proliferation of "services" is that many are hard to cancel, or are betting that I'll forget to cancel.

libertine2• 5 years ago

How can I invest time and money in using a product if I'm afraid the founder will bail after a few months?

I'm sorry to say this, but this just shows lack of empathy.

You're looking at your belly-button, because you're a particular type of user that's aware of product/company life-cycles/spams... very few people are thinking about the problem of a founder bailing out after a few months when they're subscribing to something.

Plus if you're so afraid of that when you're looking to use the product, then it must be a really good product and most likely the founder knows he is onto something. In that scenario the most probable outcome would be the founder selling to someone else, or stop updating, then people just naturally migrate to something else.

jokethrowaway• 5 years ago

It made me more wary of SaaS businesses with teams and venture capital behind.

In my experience companies with VC money are much more likely to "flip" a business and sell to someone else causing disruption, or bad updates who make the product worse.

I still haven't had any of the subscriptions for products made by indie developers get significantly worse or change significantly.

They keep the lights on, add some features without breaking existing stuff.

If they're in for the lifestyle more than the money, I think they're less likely to sell and more likely to hold and maintain (assuming they're charging enough to make a living).

lmeyerov• 5 years ago

Yep, sustainable dependencies are a key criteria for us. I'm happy to see OSS with a big community or paid hosting. OTOH, grown wary to see VC-backed (esp. big rounds) or corporate side-projects (esp. at unicorns with high churn in teams + tech, or bigco's with no OSS community governance track records).

Yes, it's doable to replace things after a year or two. But, if a bunch of dependencies have risk, that turns into a rip-and-replace treadmill of negative customer value and burns out a team.

waylandsmithers• 5 years ago

This is definitely one of the downsides- but also possible that Google for example gets bored of one of its products and shuts it down, or acquires a product just to shut it down.

Personally I think one of the upsides is that the semi-solo team might actually decide that the successful product is "done" and move on or go into maintenance mode. IMO products like Spotify and Slack could have reached that point a while ago- sure they could still work on uptime, data compression, etc. But there is only so much you can tack onto a music player or a chatroom. They keep shipping more redesigns and new features that don't make users any better off but need to keep people busy.

htrp3• 5 years ago

I mean at sometime, you may as well just shift the engineering team onto another/newer product. Spotify could have totally made something like clubhouse.....

debarshri5• 5 years ago

Seed rounds are larger because baseline of seed has changed. Investors expect you to derisk lot of things when you try to raise capital during seed as compared to what it used to be back in the day simply because today barrier to create SaaS product is low. You do not need ton money to create something to validate whether your product works or not.

Yes there are many SaaS products than before but there are many successful SaaS products than before too. You really have to standout and innovate now more than ever. That means, when you launch in Hacker News or Product Hunt, your product cannot be premature. My opinion is that if you are a serious company you should delay launching on HN or PH as much as you can. Once you are out, the destiny of the product is not your control. Imagine if the campaign fails, you are going to have hard time explaining to investors why the campaign failed. Instead, I think one can control all the odds around the product, de-risk by making sure there is a pre-existing group of dedicated users already and then launch.

skrebbel• 5 years ago

I strongly disagree. HN/PH launches are short lived media events with (usually) little lasting impact. If you blame a failed HN launch campaign for a failing company then I don't believe your company was ever going to make it in the first place.

Your product should be easy to find as early as possible. You need the customer feedback to build the right thing and you need the compounding effects of an early internet presence (eg SEO). Don't hold back launching, launch while you're still at least somewhat embarrassed of your product.

debarshri5• 5 years ago

I understand what you are saying. But your argument is true when you are bootstrapping a product. When you have already raised a pre-seed, whichbis what many companies are doing today. What have told a narrative to the investors to raise capital. When campaigns fail, it implies your narrative was incorrect and your understanding about the domain and market was wrong. Which might not be on entrepreneurs favour. When you are building a high growth startup these little lasting events can make or break. I have seen it happening with many companies.

jdthedisciple2• 5 years ago

My personal take as someone who is about to start their first SaaS: I'll simply be flattered if someone deems my product worth copying.

pdimitar3• 5 years ago

You will not be so flattered when you realize they've captured 90% of your potential paying users.

jdthedisciple2• 5 years ago

I get that and I don't expect anything else but I don't really care, as I'm just a 1-man-army with 0 funds.

50 people - heck even 10 - who think my product is worth using and I'm happy. That's how low my expectations are, just to keep myself sane :)

(I'm obv. not counting on this product making me a full-time income. I'm doing it for the experience and to get a feel for the industry.)

_benj• 5 years ago

I'm so with you!

Even thought articles like these (and all the comments here) can give a lot of (good?) information, it can also create a bunch of paralysis.

I'm also working on starting my first SaaS and I completely believe that "you don't learn until you launch".

That my product is copied and 90% of my user have been captured? WOW! I came up and built an idea worth copying and with such potential on the market!? Let's do it again!

I think this is also the freedom of no VC/investors asking for their ROI and an stable income. We can experiment, see what works and go from there. I'd also be flattered if my idea gets copied :-) I can learn from my competitor and grow even more!

Good luck on your project!

plaidfuji• 5 years ago

In 2021, there's a dozen really cool SaaS launches on HN or Product Hunt every day. A compelling value prop and demo video is no longer a guarantee that people will just check out your product.

Speaking from the buyer-side of SaaS, I expect this is because users are starting to realize that they don’t want three dozen browser tabs open at all times to accomplish basic business functions. IT departments are realizing that siloing business operations in that many different apps means you need a massive DE team to keep everything integrated and in sync, hoping that these SaaS companies stay in business and keep robust APIs. No wonder data engineer is quickly becoming the hottest new role.

hsuduebc2• 5 years ago

How exactly do you reach large companies? Is it different than in 2013?

pictur• 5 years ago

can a saas product be extracted from every subject? this brings to mind gold seekers and those who sell them pickaxes and shovels

neil_s• 5 years ago

This is super insightful, thanks for writing it up! Any details on the smart GTM strategy between enterprises and SMBs? I feel like enterprise is a dangerous place to start because of the long test/iterate loop, but SMBs could make your initial acquisition cost numbers look terrible.

arj_vandelay• 5 years ago

Sales GTM's have changed drastically. The movement from Sales led to marketing led to now product and community led is something that can be added to this analysis. Software is no longer bought by CIO's. The user and the buyer are the same for most SaaS companies and ARR is generated through the product now

I started SaaS companies in 2013 and 2021 – how things have changed

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