Equity Shot: What's next for the startup software market

Feb 10, 2021

Explore the vibrant world of Software as a Service (SaaS) as hosts dive into its lasting appeal among startups. Discover how simple innovations and best practices are redefining user experiences. The discussion unpacks the rise of on-demand experts and new hybrid models enhancing customer success. Plus, learn about the shift from seat-based to usage-based pricing—what does it mean for service providers and users? With a mix of optimism and skepticism, this conversation unravels the complexities of the ever-evolving software landscape.

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INSIGHT

Best Practices as a Service

Many SaaS companies offer expensive solutions for tasks users should already know.
These "best practice as a service" companies enforce standards and improve user performance.

ANECDOTE

Simple Innovation

Credit card input is a simple task, yet startups raise significant capital to provide solutions.
Natasha notes this exemplifies how simple innovations can be impactful.

INSIGHT

The Human Element of SaaS

Many SaaS users don't fully utilize platform features.
Hiring on-demand experts can guide users, increasing engagement and reducing churn.

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Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

Natasha and Danny and Alex and Grace noticed last week that we had a bevy of software-as-a-service (SaaS) stories that we wanted to chat about. So we decided to break them out into their own episode.

What came out of the conversation is a mix of optimism, sarcasm, and healthy doubt regarding what's next for SaaS. SaaS matters as it is an incredibly popular business model for startups, a way to generate high-margin recurring incomes. Indeed, it's almost the default method for revenue generation amongst startups today.

But precisely what SaaS is, and how it works, appear to be moving targets.

This piece by our own Danny Crichton, for example, digs into a trend that he has noticed in the broader software space, namely startups taking a single task, or feature, and providing it in a manner that ascribes to best practices. For example, online checkout tech has been around since the dawn of the Internet. And yet Rapyd and Fast and Checkout.com and others are raising oceans of capital to provide checkout solutions to other companies. Why? They offer best practices-like services.

From there we talked about the inclusion of humans into software, which isn't a radical concept but has new weight considering the information overload world we live in. The whole concept of having an Airtable hotline to answer each and every random question we have seems like music to our ears, what about yours?

And finally we discussed the growing use of on-demand pricing over traditional SaaS. Danny asked if this is really something new, which we discussed. Perhaps we're seeing more on-demand pricing in modern software companies thanks to not only the success of companies like Snowflake, but also growing ranks of API-delivered startups.

Overall it was fun to niche down to a single theme, something we rarely get to do on the main show. Expect more of this from us in the following months!

Credits: Equity is produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our Illustrator. We'd also like to thank the audience development team and Henry Pickavet, who manages TechCrunch audio products.

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