SaaS is minting millionaires again

SaaS is Minting Millionaires Again

SaaS is making a huge comeback, creating new opportunities for founders, developers, and entrepreneurs around the world. In this episode, we explore why Software as a Service is once again producing million-dollar businesses, the trends driving explosive growth, and the strategies successful founders are using to build profitable products.

Whether you're planning your first SaaS startup or looking to scale an existing business, this episode is packed with practical insights, real-world examples, and actionable ideas to help you succeed in today's AI-powered software economy.

🎙️ Tune in to discover how the next wave of SaaS innovation could become your biggest opportunity yet.

Transcript

SPEAKER_00 0:00

I don't know what to tell you. This is the greatest time ever to building SaaS. I mean, no other time in history has it been this cheap to be able to build SaaS, build audiences around it, get it to people who have billions of billions of dollars of spending power who want to buy your product. Now, I have a playbook, 30-step playbook for where the future of SaaS is going. And you know, why are you gonna trust me if you're new here? Well, I've been an advisor to some of the biggest software companies on the planet. I was an advisor to TikTok, advisor to Reddit. I've built and sold three venture back companies. I've been in the arena, as Chamas says. Um, and today I'm gonna actually just tell you here's 30 steps for how you could be thinking about building a software as a service company now. I'm not gonna give you the silver platter. I'm not gonna give you the here's the one idea that you should do so that you can actually uh you know build it. But what I am gonna do is here's the framework for it all. I'm gonna walk you through in this episode, I'm gonna walk you through each of the frameworks and the steps of the frameworks for how you can go and build with AI a software as a service startup. So let's get right into it. The first thing is you're gonna wanna go ahead and start with the sub-niche inside a big market. You're gonna have to find a big market. Um, and a big market could be something like I mean, we're talking huge here, you know, finance. So what's in what's a sub-niche? Well, you know, fire, financial independence, retire early, which is a movement within the finance uh movement for Gen Z might be the uh sub-niche in it. So, you know, you can use AI, you can use tools like ideabrowser.com to find some of these niches. Um, but you want to go uh and and and you want to go into the sub-niches. Like don't make the don't make a mistake of trying to build something for a huge market because that's where the venture boys are playing. This is for the people who want to uh build a cash flowing startup that you know maybe they want it could raise venture later, but you know, right now it's about building cash flowing startup, you know, $100,000 a month, a million dollars a month type thing. So that's what you're gonna want to do first. Uh second, you're gonna want to map uh this sub-niche's workflow end-to-end. So I'll give you an example of you know just a local roofing company. So the owner's daily workflow end-to-end. And by the way, you can use AI to go and uh help you figure out these roofing, uh, sorry, the this these workflows. So uh step one, check new leads, website form, Google ads, Facebook messages. Step two, respond to homeowner and qualify the job. Step three, schedule a site visit. Step four, drive to the house. Step five, take photos, step six, estimate materials, step six, write and send a quote, follow up, negotiate. It does it doesn't matter what the exact steps are, right? The thing here that matters is you have to map the workflow end to end. Um, you can either do this manually, i.e., uh you're you know calling up in the in this example, you're calling up owners, you're trying to ask them, you know, how do I, you know, what do you do in your day-to-day uh basis? Or you might be an owner of a local roofing company, or you might work in a local roofing company. So you might be that person yourself. So you know the workflow. So in your head, trapped in your head, you have the insights in order to actually go and do it. So uh, and then the third option, obviously, is you can use AI. You can go to you know Manis and ask it to uh you know figure it out for you. Uh, you can go to Claude Code, you can go to um, you know, uh you if you're using OpenClaw, uh you can use Chat GPT. So figure that out. Those are the three ways of doing it. Super important to have a dialed uh workflow end-to-end. Then you're gonna want to identify where money changes hands. Um because where money changes hands, i.e., you know, in this example, negotiate scope or price, collect deposit, order materials for suppliers, that's where you're gonna be able to create some like wedge in software uh and sort of take a piece of that pie. So that's an important piece here. You can highlight that. Um you could be doing this on like a fig jam, you can be doing this on an Excala draw, you can be doing this on pen and paper where you're writing out these workflows, Google Docs. It doesn't matter, but highlighting where money change hands is really important. Step four is spotting repetitive mechanical steps. Why do you want to do that? Well, you want to do that because that's where uh there's an opportunity to do some sort of you know agent or automation. Uh so you're gonna want to spot those uh and then you know, again, take note of what that is. So, for example, checking new leads, uh, website form, Google Ads, Facebook messages, phone calls, that might take five minutes uh every day or 10 minutes every day. And if you can save people in this owner 10 minutes every day, what's that worth to him? Well, if that person is making $250,000 a year, $500,000 a year, a million dollars a year, you can literally quantify that and it becomes thousands of dollars. And then so if you can say, hey, I'm gonna save you 50 hours of time this year, 100 hours of time this year, 150 hours of time this year, what's that worth it to you? And if you're, you know, chart uh if that person's time is worth $400 an hour, then you can go and just be like, well, I'm gonna go ahead and save you all that time and you're gonna be able to make more money. So that's step four. Step five is you're gonna quantify the cost of those steps. So I kind of just talked a little bit uh about that. Um, quick break to invite you to something. Now, this isn't an ad. I just want to invite you to a free event because I think that you're gonna get a lot out of it. I wanted to take one hour of time where we just talk about building businesses in the age of AI. People say SaaS is dying. I actually believe the quite opposite. I think that SaaS is just evolving. I think right now is an incredible time to be building software startups that help you craft your dream life. And for all those reasons, I'm said, I said, let's just book one hour of time. It's gonna be 11 a.m. March 12th. That's a Thursday, where we can go and lock in and just talk about building businesses in the AJ AI. I'll include a link in the description in the show notes to join. And I can't wait to see you there. Step six is create scroll stopping content around that workflow. You're going to not just want to create a product, my friends. No, no, no, no, no. You're gonna want to create media. You're gonna go on ahead and you know, create an Instagram, create a TikTok, create an X, pick one channel that you're gonna focus on and build an audience around that. Uh, it's easier said than done. Create scroll stop stopping content. Like, I know what you're thinking, like easy, you know, that easy for you to say, or or that sounds easy, you know, easy, but it really isn't. And and you're right. But the truth is you can use AI to go and research, um, ask it, you know, in this niche, how are people going viral, right? Um give it, you can even ask, you know, a manus, a claude code, uh, and uh a chat GPT, like you know, what just like content ideas. What are some content ideas that would go viral in this niche and ask it to do uh create a calendar for you? So you can use it as you know an AI CMO. Um and and you know, the best the best thing you can do is in my opinion, use something like Manis or use something like uh Claude Code. Um and and create some automations around making uh making a repetitive task around you know getting content ideas, giving script ideas, and and and creating content. You can use AI to create some of that content. You know, I saw um I you know I'm starting to see AI videos uh that are actually like you can you can barely tell that they're AI videos. Uh you can use AI videos, you can either do it yourself, you can record it yourself, um, you can do faceless content. But the point here is uh, and and oh, and you can also use something like an open claw that actually just does this all repetitive for you, claud co-work. I could do a whole episode on this number six. People let me know if that's interesting. But the point here is that you're going to use some AI automation to come up with ideas for you, research for you, scripts for you, um, ideas, and you're gonna push it to the limit. You're not just gonna be like, give me content ideas. No, you're gonna push it to the limit and ask it to give you non-obvious ideas, consistently providing a context, um, and then doing scheduled tasks, so you're getting this on a daily basis. You're gonna want to study step seven, study posts that get saves, replies, DMs. Um sounds obvious, but a lot of people don't do it. You know, I recently uh have been posting on Instagram over the last six, seven, eight months. Um and I I look at uh I can like pull it up here. Like I look at uh pull it up here, like the insights, uh view insights. And I could see right here um in my latest video, it's got 2700 likes, 5,000 bookmarks, and I could just see uh basically how how it how it compares to other videos. And you you develop this intuition around your content. You develop your intuition content. And by the way, why do we care about content? The we care about content because yes, you're gonna build an audience, and then hopefully you can sell this tool that you're building. We don't want to forget, we're building a SaaS tool. Um, but the the other piece of it is when you create content that could be used as ads, right? So you're gonna want to double down on organic angles that convert, but you're also gonna want to run step nine, paid ads on the proven organic winners. Um because it once you've shown that you can prove organically that you're getting some traction, there's a good chance that those organic pieces of content will be able to uh work as standalone ads with some good ROI. Now I'm not saying every single organic piece of content that goes viral, or when I say viral value, I mean viral within your niche. So that could even be 60 likes, 80 likes, 120 likes. Depends how big your niche is or small your niche is. Point here is that uh there's a good chance that if it works on organic, it will work on paid. Um, and that's that's gonna be huge for you. Mistake a lot of people make uh step 10, capture emails from day one. Your email list is your it's like your foundation, you know, when sales are down, you can just go and email that that that list and be like, you know, we're doing a discount or we're doing an event, or uh, you know, because you can't rely on social either ads or even your organic, that it's gonna work, right? So having that list of people who are interested in your brand, in what you're doing is gonna be key. Step 11, manually perform the workflow. So, you know, now that we we've we've mapped out this workflow, you're gonna wanna manually do it. Now, why do you want to manually manually do it? Manually is gonna help you uh you know basically learn about how to actually perform this piece of work. So when I say man manually, what I mean is a lot of these future of SaaS businesses are actually gonna start off as service businesses with human beings at the core of it. It's actually gonna start as being you, the person to actually go and fulfill the task. And I know that might not be sexy, and I know that that might, you know, people look at that and and and and be like, well, that's not what I signed up for. I signed up to create this software, that software business that is gonna work 24-7, is gonna have high enterprise value, that allowed me to quit my job, is gonna, you know, hopefully sell for a lot of money, you know, one day. Well, yes, that could be one reason what you know why you want to do this. But the point here is that uh you need to really, really be dialed around how how to actually perform the outcome, right? So, you know, maybe you've done this in a past life, like you know, for example, in the owner of the roofing company. Maybe you've you were that owner in the past, so you know how to do it, but you're gonna want to manually perform it probably from the start. You're gonna want to, step 12, document every step precisely. And step 13, you're gonna want to separate judgment from mechanical tasks. Um, this is a really important step. AI is incredible, incredible at mechanical tasks. And in judgment, sometimes it's good and sometimes it's bad. So you're gonna want to start with mechanical tasks, which leads me to step 14, which is you're gonna want to turn your mechanical tasks into agent workflows. That's the opportunity here. If you can create those agent workflows, automate a lot of that stuff, that's where a lot of the value is gonna be. Step 15, you're gonna want to design agents to complete the full tasks. Step 16, connect agents to real tools. So uh this is using things like MCP. Um, but the idea here is your your agents are gonna need skills and tools to actually go and for uh perform uh these tasks. So that's why you might need to have it hook up to email, have it hook up to Slack, have it hook up to CRM, have it hook up to Stripe. You can obviously imagine in the example I gave with the uh roofing company where you'd have things like you know, email integration, like over here, um, you know, Facebook integration, you know, Stripe, uh, et cetera, it's going to need access to that. Uh in the beginning, you're gonna do this manually, but eventually the agents will have access to these tools. Uh, step 17, add uh orchestration, retries, and verifications. I actually saw a really good tweet by my good friend Scott Belsky uh on on orchestration. Let me see if I can pull it up. First of all, Scott Legend used to run product at Adobe, one of the best seed investors I know, uh, invests in some of the biggest consumer companies that you know you've you probably use. Um and he says the orchestration layer is the new interface layer. As we spend our day coordinating agent workflows in a model agnostic fashion, local and cloud, and validating outputs, human in the loop, and resolving issues, the ultimate layer to own is where coordination takes place. Um so uh I think he's absolutely right. I see some replies here. We've entered the conductors area era. Um so a lot of talk right now on this orchestration layer. Uh orchestrating agents. And that's kind of what you're gonna be doing when you're building your new software. You're gonna be orchestrating uh uh the agents, um, the outcomes and the resolutions are the end goal. Um and I think this is just yeah, a new paradigm, a new way of thinking around building software. Um and yeah, here's another good reply. If coordination becomes the choke point, whoever owns that layer owns the flow. Um, so I could not agree more. I think this is like where it's going. Um so yeah, going back to here, you're gonna step 17, you're gonna want to add that orchestration retries and verifications layer. Step 18, uh, you're gonna want to store user preferences. So as people are using uh using the product, uh that's gonna be a little bit of your moat, the user preferences, how they're using it, and then the memory, uh long-term memory into your you know, agent SaaS is going to be an important piece as well. Uh you're going to want to step 19, launch narrow with high-touch onboarding. So uh, you know, it's very tempting to do onboarding, like a sign-up flow and stuff like that. That's very short, sweet, uh, but you want to really get to know the customers, get as much data as possible as you is as you know, when it obviously you're not gonna be able to like ask them a thousand questions. So you have to basically figure out like what is the right amount of uh asking uh in terms of onboarding to make the experience good, but also to create a moat um for you. Um because what I don't want you to do is create something that has basically a very like you're not getting the right data into the product, um or or you you're expecting it later. And that also, you know, doesn't make the experience good for the customer, could be better, um, and or competitors come and just knock you out of your stocks. By the way, while we're while we're building the product, we're creating just just so we're on the same page, we're creating content uh like what we talked about before. We're trying, we're creating new, you know, putting up one piece of content minimum every single day. Uh, we're trying ads on the ones that work, and we're we're trying to really understand and build that uh that uh foundation of a media company at the core of this. Step 20, publish measurable proof. So, you know, going back to like remember we talked about how you're saving time for for the owner of the business. Well, what is that in terms of revenue hours saved? Um, step 21. Um, you know, this step 2021 is move pricing for per se to per task. And this is one of the reasons why a lot of SaaS companies in the public markets are down 30, 40, 50 percent from all-time highs, is they're scared that not only are people gonna be able to vibe code or or you know use AI to create uh competitors to to that to whatever product it is, Salesforce, whatever. Um, but it's also uh the per seat model is sort of losing its allure, and people just want per tasks in AIH. Do this thing for me, like complete this workflow, and this workflow to me is worth $200 every time you do it. And that's that's where it's going. And you, as the person building this feature of SaaS, you will be able to compete better with the uh against the existing products uh in your space for two reasons. One is, well, for a few reasons. One is uh we've gone more now, we've got we've gone more sub-niche, right? So you can compete against the big venture back people because uh you're a bit more uh bespoke. Um you are building media at the core of what you're doing. So you have this unfair advantage around not only an audience, but you're building, you know, email newsletter, and you're also doubling down on uh paid ads. So you you you're you're able to basically do better ads than a lot of the competition. Um and then you're doing, you know, you're using AI and agents to actually fulfill uh the work. And that's easy that's better than having humans and you'll be able to compete on it's better because you know, if of course AI AI hallucinates, right? But if you if you do it right and you do it in a small way and you don't you know overload with context and you're doing checks and stuff like that, you will be able to get incredible uh results. So I think uh because of that, and also it's gonna cost less, your cost structure is is obviously less. You don't need to raise millions of dollars if you don't want to, you don't need huge teams if you want to of people. Um, you'll be able to be more cost effective and you'll be able to move from a per seat uh basis to a per task. You don't need to start by per task if you don't want to. You can actually start by per seat if it if it's easier or whatever. But my point here is eventually you're gonna want to make your way to a per task basis. And that's gonna shift you, step 22, to outcome pricing. That is the goal here. Step 23, as your value compounds, as you go and add more workflows, as you go and get do a better job at adding workflows, as you build your brand so you have more uh trust, you can increase pricing as that value compounds. Once you've finished this workflow, say you've actually gone and just you've done it. Like this, you've built this really good AI agent software that goes and does and does this better than anyone, and it works, and you feel like you probably can't get more uh LTV out of it given the product offering. That's when you can go and explore uh basically increasing into uh different adjacent workflows, adding different adjacent workflows. People here also can think about do I want to buy another company? Do I want to build it myself? You know, a lot of time here it you know you you might not want to buy something. You might just be like, you know, AI is easy, it's so easy to create the product now. You might just want to build the product yourself. But the you know, this is gonna lead you to step 25, orchestrate multiple agents across across the life cycle. Step 26, build switching costs through data and memory. So we talked a little bit about that before, but you're gonna always want to layer on more data, more memory. Uh now you have you know multiple agents across the lifecycle. You're probably in a few different workflows. Um turn step 27, turn those power users into public case studies. So by this time, you probably have these power users, hopefully some that are well known in the sub-niche, and uh turn those into public case studies. And when I say that, you know, don't just uh create like articles, tweets, that sort of thing. I'm talking about like full-on, send a camera crew or go yourself and film these people uh and and and showcase that and then put paid spend around that as well. Step 28, hire operators from inside the niche. So at this point, you're probably making money, profit, go and reinvest that in hiring operators. Step 29, reinvest products, profits into distribution.