Build SaaS with Strong Opinions

The SaaS product of the future is there to force you into best practice, not to let you configure your way there.

There's no product more at risk of AI obsolescence than the 'everything for everyone, configure it yourself' SaaS product. These products exist in abundance, selling themselves on the fact that they don't constrain your process, you do the work your way and we'll meet you there. That used to be worth $99 a month per user, but its not any more.

If you are buying B2B software, you're looking to solve a problem. You want to swap some of your money (and time) in order to generate value or remove pain. Software was, and continues to be, a great tool to deliver that outcome. With the sudden rise in AI software development capability however, the bar has significantly lifted.

A handful of years ago, you would be applauded for configuration. Businesses work in many ways and if your best practice didn't gel with your customer then you were going to lose out on sales.

The solution to this was the rapid rise in configuration. Tools, especially systems of record like Salesforce and ERPs provided nearly endless customization so that you could encode your way of working within their system. They build lots of little tools that provide the framework for you to 'digitize' your best practice.

Today, you can likely employ a mid-level developer with a Codex or Claude Code license to do that same work. You swap a monthly fee for a salary but what you build is yours to own and shape how you like. If you already have mid-level developers with AI access on your team this becomes an even easier decision.

Before you suggest that it'll never get past IT without ISO and SOC2, remember that spreadsheets are likely still the biggest alternative solution for most of today's B2B SaaS tools.

So where does that leave SaaS founders? Well, in my opinion your best bet is to throw out the old 'configure it all' mentality and do the hard work of figuring out what works best then sell that as a strongly opinionated piece of software.

I think more and more, businesses will pay to shortcut their way to best practice rather than buy the tools to go on that journey themselves. This lets these businesses focus on their unique value and not waste time reinventing the same sales pipeline process used by every other company in their industry.

I am not suggesting this is an easy process. For many SaaS companies, they product they sell is abstract and their team is only tangentially tied in with the industries they sell to. With this in mind I think companies that combine services and software are going to have a unique advantage.

Having team members living and breathing the work you are building tools for means you have the best test environment any product manager could ask for. You can work out what best practice looks like and then bundle that up and sell it to your peers.

It may sound a little crazy to sell best practice to your competitors but in many industries there's nearly no chance at a winner-takes-all end game. Trades and other people based services just don't roll up that way very often. You can become a very valuable company by playing a second game that those competitors aren't equipped to play.

Think of it like Amazon selling their Amazon Basics line. They're one of many in a crowded market and having those products there is probably not materially taking business from others making door handles or plain black t-shirts.

If you go down this path, the sell looks different. You need to now sell to peers and convince them that you have figured things out. This is going to take demonstrated proof and is again why the services and software combination is uniquely powerful here.

Trust me, from my early days trying to sell into the medical world, nothing came off worse than the image of some tech folks thinking they could come in and 'fix' things. We needed to become part of the industry before we could build the trust.

The same is true in my work today in logistics. We do the grunt work in freight and supply chain services to optimize technology that learns from our experience. That experience is the thing that is valuable, not the software itself. Especially as that software becomes cheaper and cheaper to produce.

It's the strong opinions, backed by experience, on what software to be building that will drive the next generation of B2B companies.

Subscribe to Elliot C Smith

Don’t miss out on the latest issues. Sign up now to get access to the library of members-only issues.
jamie@example.com
Subscribe