I’m sure you’re familiar with SaaS (software-as-a-service) unicorns like Uber and Twitter.
What you may not be familiar with is neither of these companies have ever been on a path to profitability. In fact, back when Uber held their IPO they shared that they may never be profitable.
As such, what’s to distinguish these companies from Ponzi schemes? They essentially raise new rounds of capital to pay earlier investors and that process repeats seemingly indefinitely. The part that gets me is that there doesn’t really ever seem to be an end goal in mind.
For this reason (and more), the world of SaaS economics is changing. The favorability is pushing harder in the direction of profitability.
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I think this is a good thing and that we’re likely to see better products hit the market because of it.
My question for you is if you’re working on a product, when is it expected to be profitable?
For a deeper dive on this topic, check out my latest blog article on SaaS economics.