How Long Does a SaaS Business Last?
In which I share my sage business advice for people who ask this stupid question
“So, how long do you think this business could realistically last?”
The fancy investor leans in across the white tablecloth, pinching the stem of his wine glass, eager to hear my response.
“As long as I want, I guess. Forever?”
He’s skeptical. I know what he expected to hear: something like five, six years, long enough to make his money back, grow it and double or triple his money.
I have this conversation several times each month, and this question always comes up — what’s the shelf life of this business? How long until it’s irrelevant?
That’s not the point. A SaaS business isn’t a product with a shelf-life, it’s not inventory that expires. In whatever ways it does grow old, you manage that by dealing with technical debt and keeping up with evolving user expectations.
And user expectations don’t change overnight, regardless of what you hear echoing in the Valley.
I’m not talking about “the next cool thing.” I’m talking about niche B2B SaaS apps, which are weathering the storm of the Age of Apps, thank you very much, and are about to come out on the other side mostly intact thanks to progressive, responsive design.
The investors’ point of view makes sense if you think of software as a product that might lose favor. But they’re missing something obvious about SaaS, and that’s that it stands for Software as a Service. It’s a service, not a product, so it doesn’t have a shelf life.
I can’t wait to look back on this in thirty years when everyone else has figured this out.