What is SaaS 2.0
I will be quite disappointed if I traveled 5 years to the future and see that SaaS in 2025 is in the same league of what we have right now, and if the history is any indication, disruption is on the horizon.
But why? I love SaaS companies right now, I use maybe 30 of them every month in our company. Why they have to change?
Because in 2030 the software world will be different from what we have now. The same as what we have now is different from what we had in 2010. We are creators of the World of change and innovation. We can’t “not change” ourselves!
What should change & why?
When you have a SaaS company, you are providing “Solutions” to people & businesses and nothing is wrong with that. However, no matter how hard we try, we’re basically creating one (dynamic) solution for everyone, which is not ideal by definition.
Regular SaaS companies right now are like “canned food”: They get the job done, they have different varieties, tastes, options, etc. but THEY ARE NOT REAL FOOD!
And you (as the customer, as the client or “business”) want real food, a food that is cooked specially for you based on your taste and needs. In other words: The people & businesses want their own “personalized”, “customized” solution. Why? Because every business in the world is unique.
So as we don’t have any “one size fits all” solution in any industry, we definitely don’t have it in the software world as well.
You might ask this: Our SaaS company is different, we offer dynamic solutions so everyone can use our products based on their needs. The truth is: you’re not dynamic enough.
No two companies are exactly the same so when we try to make our product dynamic, we’re segmenting our customers in different groups and try to offer something different to each segment. The same goes for SaaS companies that are focused on a “niche industry”.
This is not wrong, it’s just not enough, each member of each segment is unique and we’re sacrificing the customization necessary for perfect customer satisfaction, in the name of simplicity, affordability, and speed.
SaaS vs SaaS 2.0
Assuming this is impossible to solve? Spoiler alert: it’s not, but let’s start with an obvious solution:
Every business can develop their own customized, personalized solution!
It’s true, Software is eating the world, but not everyone would be a developer, Nor they should!
Development is hard and expensive. I have seen many big companies wasting millions of dollars on their software development because they feel no SaaS can meet their needs. But at the same time, they didn’t have the expertise of creating software themselves.
Some visionary companies found another way, a new perspective:
Instead of offering our customers the solution, what if we offered them the right tools so they could create their own unique solutions?
So they basically wanted to convert their customer to “Software Builders” and that is what the first “S” stands for in SaaS 2.0, “S” is no longer software,
SaaS 2.0 == “Software Builder” as a service
In SaaS 2.0, a term that I coined, SaaS companies don’t have to fool themselves and their customers with dynamic or advanced solutions that ultimately don’t work effectively for their customers. By providing the right tools, companies empower their customers to create their customized unique solutions (software) based on their different needs, stage, taste, etc.
But it’s not as easy as you see here. Creating a product that can create software is extremely hard, and worse than that there is a big pitfall:
When you try to please everybody, the product can become so difficult to understand and to use, that it will turn your customers away screaming!
That’s why a lot of companies who try to do this, fail miserably. The solution obviously should be so dynamic to consider everyone’s requirements. Additionally, the product should have a lot of features because these features are needed so everyone can experience actual customizations.
This pitfall is too consequential to ignore. I’ve seen many big companies trying to avoid it, but at last, they fell right in. As you know, software developers love developing new cool features. Thus, producing a product that can build software and is dynamic, and 100% customizable would be like ecstasy for them! A worthy challenge, that software developers can overcome, only if they add enough features and customizations.
In order to provide enough features and customization, software developers would end up with a big product that has far too many features, too much bloated, in dire need of constant refactoring and redevelopment, and worst of all, too hard for businesses to understand and use.
There is another way. Let’s forget about offering a SaaS product for now, and focus on the fundamentals of software design.
Let’s first mention a few examples of the great companies that achieved this and their approaches:
Notion is a “canvas” that you can populate with blocks (tools). So the idea is that same as a canvas, you can create anything you want and connect it and make something unique for your need.
Airtable’s idea is the merge of spreadsheets & databases. Both of these tools are brilliantly dynamic and yet they were hard to “understand & connect into”. So Airtable helps you to create any connection you want and really understand what you are building. So what you’re building is no longer a database or spreadsheet, it’s a customized software capable of great things, designed by you.
The idea of Formaloo, that I work on, is something similar: Forms are one of the most essential parts of any software in the world. Why? Because forms are the gateway to both the software development world and the data collection world.
Formaloo simplifies the creation of your own solution with few essentials: With a simple form builder you design your way of collecting data and as a result, the design of your database, and then you can “connect” what you built with any other tools that you have, to turn it into a powerful & unique solution for your unique business.
Another very successful example is WordPress, you might think it’s just for building websites & blogs, but that was just a beginning. Wordpress is an ideology that now powers 36% of the internet.
Websites are just exterior for businesses. However, they are software on their own. WordPress doesn’t care what you’re going to build. The only point it offers you is this: It provides you a jump start. A fundamental platform, so you don’t have to repeat yourself or start from 0. WordPress imagines all you do is producing and organizing content, even if some of them are tools or software themselves.
As a result, with the help of WordPress and millions of “ready to use tools” that the community provides, and you can use or modify as you wish, you can create your unique solution for your unique business.
You can create, organize & connect them as you wish.
Same as when the software design started, we shouldn’t invent stuff and try to make it dynamic, there are many approaches that we can follow to achieve what we need.
Every software has many essential parts, what if we take these essential parts, make them small & simple (without sacrificing their power), and turn them into “ready to deploy tools”?This way, you can modify these tools based on your requirements, connect them with other tools, and create your unique customized software.
This process should be both simple and automatic for this to work.
Conclusion
SaaS 2.0 will be the future of SaaS. The current SaaS companies either will change and become software builders or they will die.
This is not me being harsh, it’s what we often forget. The fact that we, as SaaS companies, are one of the most innovative industries in the world. We should monitor and expect disruption in our industry because we are the change in our industry.
As always:
- Simplicity is always the key. If our software builder is not 10x simpler and customizable than others, it will fail.
- Simplicity doesn’t mean lack of features, it means the way you communicate understanding (their real needs) to your customers, even if they don’t know their needs.
- Customization doesn’t mean a lot of features & advanced solutions, it means freedom to collect, modify, and connect as I wish.
Thank you for reading this post, I would love to hear your feedback and your experiences regarding this post. If you want to contact me or ask me any questions, here is my LinkedIn, I would be happy to hear from you.
