Comment by torginus
5 hours ago
Imo the problem with SaaS products is that their revenue expectations are priced accordingly to the market they serve, not the money it takes recreating them.
If I wrote the best word processor in the world, I could probably sell it for a decent sum to quite a few people.
However if I expressed my revenue expectations as a percentage of revenue from the world's bestselling novels, I would be very quickly disappointed.
This is a great way of framing it that I'd never thought of before.
I worked in engineering software for a long time and because of who we sell to, there's always been a very hard cost-benefit analysis for customers of SaaS in that space. If customers didn't see a saving equal to more than the cost of the software in Y1 they could and would typically cancel.