SaaS is not dying but lots of SaaS companies are in real trouble

There's a solar eclipse about to cross Spain and my winery happens to be in the path of totality. A little-known fact is that my original career path was actually in astrophysics — at least until I realized there's not much money in that field — so a solar eclipse is very exciting for me. If you happen to find yourself in Barcelona next week let me know so you can join the party we're throwing!

Speaking of parties, I may be a little late to this one, but if you've been paying attention to LinkedIn over the last few months (honestly, I don't blame you if you haven't been) you've probably heard a lot of people claiming that SaaS is dead or dying.

That's wrong.

SaaS is not dead or dying, but what is dying is the assumption that software stays defensible just because it was expensive to build the first time.

The common argument here is: why would anyone pay money for a SaaS product when they could just vibe-code a replacement for themselves?

Lots of reasons, but mostly it's just not practical. Most companies lack the product judgment to know what to build or lack the technical expertise to know how to build it. This argument overlooks data integrity and security, maintenance and support, infrastructure reliability, code deployment, integrations with third parties, and compliance and governance (GDPR, SOC 2, HIPAA, financial controls, audit trails, etc).

Software is getting easier, but it's still hard.

What I guarantee will happen though is that incumbents will face pressure from two sides. They will be attacked from below by cheaper, simpler, AI-native tools and from the side by small, sharp, verticalized SaaS products that attack specific pain points the incumbents have ignored.

In fact, I predict that there will be a lot more SaaS companies in the future.

Why do I think this? Because that's exactly what I'm doing.

The big incumbents still have brands, sales teams, partner ecosystems, and large installed bases. But smaller teams can now close product gaps faster, especially when the incumbent is slow or politically constrained.

The best new SaaS companies will be built by smaller, sharper teams that can move extremely fast.

Instead of raising $50M to build a broad horizontal platform, the new generation of SaaS teams will build profitable products for narrower markets, with fewer people and better margins.

SaaS is not dying, but lots of SaaS companies are in real trouble.

Cheers,
Ryan