[siliconc0w]

The problem with these SaaS companies is that they all eventually become seduced into whale hunting (big enterprise) and the product ultimately suffers as they are forced to adopt whale pricing and focus on endless enterprise reqs that the whales say they want (and most of the time don't actually use). The product drifts or stagnates for their core use case and then another startup comes along to 'disrupt' the market and they do until the process repeats.

[mdorazio]

Here's their operating margin for the last 4 quarters:

Q1: -49%

Q2: -65%

Q3: -50%

Q4: -38%

So what you want is a business model where the company runs purely on VC money instead of on actual profit. SaaS companies like Gitlab usually can't operate at a profit with only free-tier and cheap-tier users - their overhead is way too high. Those tiers are a gateway drug offered at a loss to get people on board so that eventually the actually-profitable enterprise accounts will stack up enough to make up the loss. It's kind of a standard bait-and-switch pushed by the whole VC model. I'm personally hoping we see less of it now that the money spigot is drying up.

[geophph]

“Here is how platforms die: first, they are good to their users; then they abuse their users to make things better for their business customers; finally, they abuse those business customers to claw back all the value for themselves. Then, they die.”

https://culturalgutter.com/2023/01/25/the-enshitification-of...