It’s a great time to grow a practical SaaS company that isn’t “AI-first” and is all about VC funding.
Sure, AI-first companies are getting lots of attention and most of the crazy VC funding. Some will win big for sure, but most won’t.
But these cool kids aren’t “killing” traditional SaaS businesses that are slowly testing AI features in their apps to see what customers will use and value.
These are two different speeds and risk profiles. There’s plenty of room for both to succeed.
Here are several reasons why it’s a great time to grow a practical B2B SaaS business that isn’t “all about the AI.”
1) Software is still “eating the world. Software spending is going up overall everywhere.
This steady tech growth trend will continue with help from AI.
2) The massive investments in the big AI platforms will create efficient AI technology for savvy SaaS companies to implement practical AI.
Just like AWS enabled the little guys to start small and grow efficiently in the cloud, AI platforms already enable savvy SaaS startups to plug in useful AI without huge investment.
I know many SaaS companies that are quickly implementing targeted AI features using big platforms that used to require significant VC funding to build just one year ago.
AI platforms will help bootstrapped and lightly-funded SaaS startups quickly build more valuable vertical or niche-horizontal solutions with less investment.
3) Pricing models might evolve to more usage and value-based models, but this isn’t a big deal.
Giant software companies might struggle with pricing model shifts, but the little guys will quickly evolve to what works.
4) There is growing recognition that efficient software companies with great products, happy customers, and some profit are more sustainable than most VC-backed crazy bets.
Customers in most industries recognize that many VC-funded startups spend their money fast and flame out quickly. This is a big change from 10 years ago.
There will be some big AI-first wins for sure.
And there is no slowdown in efficient SaaS that is more practical about AI adoption or even skeptical about the value of the newest tech.
AI platforms are evolving rapidly, and costs are already coming down.
This is great news for savvy SaaS businesses that are customer-focused and open to leveraging practical tech.
SaaS is not dead. It’s just evolving, as it always has.
