[rglover]

Turns out building massive workforces on top of software business that don't require them isn't good business.

The big mistake most companies made is that they applied the old-school "Fortune 500" way of company building to software businesses (i.e., bigger is better). Humorous, because the promise of software was that it reduced the need for that behavior.

The end result is that they've built companies which ironically have great margins (or at least, should), but they burn cash like they're still in their seed round. Even worse, this behavior pushes out most of the early talent which means you need ever-more people to fill in the skill gap created by hiring lower quality talent. This also creates the problem of a once-great product deteriorating into mediocrity over time which also threatens grip on market share.

[_fat_santa]

As a co-founder of a SaaS company, I look at my (much much) larger competitors as a competitive advantage rather than a disadvantage. Most of our competitors in our space have much higher pricing because they have 1000+ person headcounts to maintain. We will certainly make less money than our competitors but the general idea is there is a sweet spot where we can charge less for our service and still walk away rich because there's less things to burn cash on.

[api]

Zero interest rates. You raise big rounds so now you have to spend it. You raised at crazy valuations so now you need massive ARR and have to enshittify and raise prices.

The whole phenomenon of huge SaaS companies with huge prices and huge workforces seems like a zero interest rate phenomenon.

[dilyevsky]

That is definitely the case but also a lot of those saas companies dont even have great margins and were pure zirp. That’s because they also keep building their stack like they’re in seed stage.