[Swizec]

> Silicon Valley SaaS bros have lost touch with reality because they have unlimited money to work with.

Disagree. The issue is that they don’t want cheap users. It lowers your average user value, impacts your valuation, and usually cheap users are the most demanding to support in relation to their revenue. A user that pays $50/year and has 5 questions to support us very different than 5 questions from a user posting $5000/year

[donmcronald]

I see the support excuse all the time, but I don't understand why it needs to be that way and I don't really believe it to be honest. Sell me a small business version that includes per-incident support. If someone has a problem and balks at the idea of paying fair value for the support they need, then I agree they're not worth having as a customer.

If the goal is to ignore or be actively hostile towards the bottom 80%, I guess a lot of SaaS companies are succeeding. To me though, they're building poorer quality products that aren't going to capture enough up and coming businesses and the long term impact is going to be a bunch of bloated garbage with a ton of half baked features where everyone is competing for the "enterprise" dollars.

> It lowers your average user value, impacts your valuation

To me, that's what it's really about. It's pump and dump quality SaaS that's built for an IPO, not for the users.

[Swizec]

> If the goal is to ignore or be actively hostile towards the bottom 80%, I guess a lot of SaaS companies are succeeding.

Yes, that is the goal. When an org decides to target primarily enterprise, the whole business model changes. You go from self serve to sales, from support chat to SLAs, etc.

You literally become unable to support small customers cost effectively and they are not worth your time.

Happens a lot in the B2B SaaS space when companies realize how much easier it is to have 10 users for $10,000 than 1000 users for $10. Some companies decide to keep focusing on small businesses and indies, which is great.

Ultimately there’s room for both business models in the world. But as a business, you have to make sure you work with businesses where you are [still] the target market.

[renewiltord]

Significantly damages your brand to do this and you'll defacto turn into a consulting company. Plus places incentives on your org to force things to be incidents since that's what pays. You'll get stuck in a local minimum of being a small-time consulting company.

Or maybe you won't. But that's the reason I wouldn't want to do it.

Besides, there's no way you can only access the no-support users. Google, for instance, offers one of these for their email product and are able to make the product free. In their case, they got brand awareness quite fast. But even though Google has Google One in the US if you want paid response, this forum frequently decries the lack of support.

The problem is the users who occupy the no-support space cannot be selected as consumers. When you try to do that, you will get an army of users who want to not pay but who do want support. They think they want no-support but they don't, and they will retroactively rebrand their reasons to be more than money.

That isn't bitterness or anything (I've always dealt with B2B software) but it's the reality of the thing as I can see.

[donmcronald]

I deal with a lot of small businesses and to me it feels like that entire sector of the industry is being abandoned. Most small businesses owners are practical and will pay for things when they need them, but they're fairly price sensitive and they expect good value for their money.

Take MS365 as an example. Most small businesses I deal with would be way better off with Exchange than with their current shared hosting email providers, but the value just isn't there for a lot of them. Microsoft thinks they're selling all this awesome stuff like Exchange, OneDrive, Teams, etc. in an ultra valuable bundle, but all small businesses see is Exchange plus a bunch of other bloat they're never going to use but are forced to pay for. They just want Exchange.

Plus, at least for the ones I've dealt with, the partner exclusively interacts with the customer, so bad support gets labelled as having a bad partner, not as Microsoft being bad. That also means Microsoft isn't incurring any cost to be the first point of contact either. In fact, the only time I've ever dealt with MS support for something Exchange related, they sucked. I ended up solving my own problem and closing the support issue by telling them what was wrong. Reputationally, we're the one that recommends it, we're the first point of contact for support, and we're the ones that take the reputation hit if something isn't working. At least that's my experience.

I see lots of small businesses that have 50 mailboxes for $60 / year at a shared hosting provider. That's $.10 per month per user. Guess how they react when you tell them moving to MS365 will be $5 per month per user? Now I'm not saying MS365 isn't worth more, but it's a HARD sell to tell a small business they should pay 50x for something that's currently working fine as far as they're concerned. Then you add in things like backup solutions changing per user per month and all of a sudden you're telling a small business they should pay 75x for the same feature matrix their shared hosting provider is selling them. They don't care about all the stupid value adds. In fact that stuff is negative value because it's unneeded complexity which results in frustration and increased support costs.

[ab_testing]

I think you answered your question right there. Microsoft does not want the business of a company where 50 mailboxes cost $60 for the whole year. They are happy to leave that market to other lower cost providers

[donmcronald]

It wouldn’t have to be that cheap though. If they sold Exchange only plans for $1-2 / user / month I could probably convince 10x the users it’s worth it. And they never deal with the customers.

It’s MUCH easier to sell someone another product at that point too. That’s literally the strategy (cross selling) Ballmer used to increase sales so much that he ended up owning part of MS.

[kanwisher]

even google charges $6+ a month for email. If they can't pay that tiny bit of money maybe they don't need a full featured product and its not a good market segment

[alisonkisk]

Meanwhile MS and Google have thousands of satisfied customers with millions of users paying the $10/mo/user.

[ta988]

Google is making money with users' emails contents and ads displayed in their interface, so that's not like they are doing that for free. In the case of airtable, I'm not sure non paying users are bringing them anything that can be monetized (I may just not be aware of vicious monetization ways though)

[cmeacham98]

Sell me a no or very limited support plan then (or charge extra for the support when it's needed). At least personally, if your docs are halfway decent and I don't run into any major bugs I will almost never make a support request.

[jwitchel]

That's not quite right. It's not the support. It's the churn metrics. A guy who uses your system episodically can give the appearance of a high churn rate. This is very bad and if you're raising money can imply that your system isn't sticky which lowers your valuations. If you're in the fundraising game that's actually worse than a few extra dollars of revenue.

[social_quotient]

Goodhart's law - When a measure becomes a target, it ceases to be a good measure.

[ta988]

We need another law here... When everybody maintains bad measures despite knowing they don't work. Impact factors in science are another example of that. You can say it is broken and proove it, your jury for grants or positions will still ask you to put the numbers next to your papers, and if you don't they'll do it themselves...

[Aeolun]

The problem is getting those 5000/month accounts if nobody wants to use your product before they get there.

[Swizec]

You’d be surprised. Those users come from sales more than self serve. Very different business model.

[alisonkisk]

Who is going to buy your high touch sales offer if they see no one uses your product?

Is this a thing where all the YC companies buy each other's stuff to prop up the revenue numbers until IPO?

[Swizec]

Have you tried buying from salesforce? Very high touch, very expensive, very unfit for small businesses, hugely successful and widely used.

Different audiences, different approaches.

Many successful businesses are such that none of us have ever heard of, but are making millions, sometimes billions. We haven’t heard of them because we’re not the target market and talking to us is a waste of resources.