A conversation I had a few weeks ago with a friend who founded a successful SaaS business really stuck with me. I was pushing him on their ability to sell into CTOs and CIOs who have no interest in being locked into a SaaS product that can extract increasing rents over time. His response was something like “would you rather be locked into our product, or into the code that a developer wrote who might not be with you in six months?”. It’s a strong angle - the cost of supporting orphaned, often undocumented code is high, though it’s often hard to see in the present.
A question that naturally follows from this line of thinking is: how do you measure the cost of orphaned code? The easiest way to sell a SaaS product is to evidence a high ROI and then deliver on it. But how do things that are hard to measure, get measured? My sense is that the next wave of successful SaaS companies will be able to measure their impact to a level of precision we haven’t seen before. As a sales tool, they’ll be able to look at an organisation, maybe ingest some of their data, and identify where the problems and opportunities are. Advertising moved almost entirely to Google and Facebook because advertisers could get an exact ROI on their investments. What if Slack or Zoom or Google told us not just how many conversations are happening, but where they’re happening and where they’re not happening, and gave us the social graph of the business?
Going forward I’m planning to pay more attention to things that are hard to measure. There will be a lot of opportunities in that space.