In episode 735, join Rob Walling for a solo adventure where he categorizes the different levels of SaaS platform risk. He introduces a framework with three key factors: Replacement, Customer Concentration, and Lead Flow. Rob then defines eight levels of risk according to these factors and other vulnerabilities such as relying on open source – a hot topic with recent news about WordPress, WP Engine, and Automattic.
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Topics we cover:
- 2:32 – Are replacements available for this platform?
- 4:56 – How concentrated are your customers on this platform?
- 5:31 – What is your lead or customer flow?
- 8:54 – Level 1: almost no platform risk
- 10:04 – Level 2: reliant on a commoditized platform
- 11:49 – Level 3: using large cloud providers like AWS
- 15:33 – Level 4: deeply tied to open source software like WordPress
- 18:11 – Level 5: high switching costs, but replacements exist like in no-code
- 20:00 – Level 6: 100% lead flow risk
- 21:44 – Level 7: a friendly app ecosystem
- 23:24 – Level 8: aggressive platforms, few replacements, customer concentration
Links from the Show:
If you have questions about starting or scaling a software business that you’d like for us to cover, please submit your question for an upcoming episode. We’d love to hear from you!
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