What SaaS thrives during a recession?
Companies do a lot of layoffs during recessions to cut costs. Suddenly, they realize they need to replace the work of the people they laid off. And software is one of the main ways to do that. What SaaS do you think can thrive during a recession?
https://www.indiehackers.com/post/software-thrives-during-recessions-16115ffc72
Hey Jerom,
Its less about the type of SaaS and more about the way that it is marketed.
During a recession most businesses are going to be cutting costs and being extremely picky with who they buy from.
The companies that will succeed are those with the most persuasive message (not necessarily the best product).
Its why focusing on building a product rather than building an effective and persuasive marketing system is a mistake - I literally just posted an article about this today that you might find interesting: https://www.indiehackers.com/post/this-startup-is-going-to-fail-can-you-guess-why-c9358d29b4
Best
Chris
Whilst I agree with the sentiment of your post, the OP isn't talking about marketing, he wants to know about recession-proof categories, and we/you can say something about that I'm sure. Assuming there is at least 1 player in every SaaS category that has built a solid marketing engine that will have the right messaging for the moment (there will be way more than that), what categories do you think are most likely to succeed through a recession? :)
Very true.
Technically any product correctly marketed can thrive in a recession but those with clear and direct link to the most important goals of any business will find it easier to survive and thrive - so any business that helps make money, save money or save time (which is technically the same as saving money).
Obviously my previous example fits right into this - HubSpot is a martech company.
I'd that all businesses claim to help make money, save money, save time, or a combination of the 3 :) But yeah, I wonder if 'timesaving' feels less intrinsically valuable in a recession as people might not necessarily make the association that time=money. Might be much better to lean into money making or saving!
Yes. Having sold all three in various combinations over the last nearly 2 decades I can say that timesaving is definitely the one with the least intrinsic attractiveness as its not directly linked to the primary important factor in business - money. One has to work harder to make the link between the two for potential customers.
@TheBLUNTMethod and @blunicorn, it was great going deep into this. We can conclude that SaaS that makes money or saves money is more resistant to recession than SaaS that saves time.
And would love to hear if you have more to say.
SaaS that saves costs, automates, and streamlines the grow during a recession. Automation, cost optimization and analytics can be beneficial for businesses.
I like this. I'd also look at things that businesses can't afford NOT to do such as payments, marketing and analytics.
AI SaaS. Just replace all those people with robot and save millions per year. A lot of writers have already been replaced with GPT3
I think it just raises the bar. You have to be a better content writer than AI to stay in the job or use AI/AISaaS to your advantage.
AI will replace the jobs and give jobs to those who use AI to advance.
"In times of severe crisis, people do not invest in new software, they only like to maintain what are called 'lights on' applications. In other words, applications without which the organization's day-to-day operations will come to a halt."
-The High Performance Entrepreneur by Subroto Bagchi
Stipe is a Saas that comes to mind. What else are the 'lights on' SaaS?
@aarushi_aw @TheBLUNTMethod @blunicorn @senthilsnap @BitGonzo @indieAbhinav @Nuro
Payroll and accountancy-related software, anything security and compliance related, web hosting...those are the first that come to mind :)
Off the top of my head I would list these as "lights on" applications:
^^agree with both Chris and Sébastien here. Think they've got all of them covered :-)
As big companies "trim down" and "optimize", startups build and grow. Even after the massive amount of layoffs in the last few months, the market is still hot for hiring tech talent! Big tech are all on hiring freezes... but startups are hiring!! And laid off techies are building independently.
If you're looking for tech talent, checkout Githired to connect (or even hire) with developers working on projects similar to yours!! https://bit.ly/githired_devs
Hey Aarushi, nice insight on how startups hire and grow. Just checked out Githired, a very thoughtful product.
:) have you had a chance to try it out? would appreciate any & all feedback. @jeromtom
I think that if instead of selling "tools", we start selling "platforms" then that is a much more resilient business model.
For instance with our A.I video editor Nuro.video we are first building out this crazy amazing A.I. that does all the editing for you. And we're currently selling it as a normal GUI SaaS for SMBs... but I aim to turn that into an API as soon as possible.
Because that enables other developers to build on top of us - when we start providing the API, it now means that any indiehacker or software company can include video features into their app without having to build them.
That opens a new market for them, and enables us to attract exponential levels of usage and be way more resilient.
Sébastien
I think the tools that companies are operationally dependent on will fair pretty well, but if companies are going bust then revenue will reduce regardless. In 2008 I remember eCom and high street stores that focused on discounted and bulk products did well, and I suspect this time around the energy crisis will play a part. Companies that are focusing on home energy automation/management, solar companies, and heat pump companies for sure....those are not pure SaaS, but there are many peripheral SaaS products that support them e.g. I have software that I use to monitor my energy generation from my solar panels.
Great insight into the play of energy crisis in a recession. Tell me more about the software that you use to monitor energy generation from your solar panel.
In my case it's provided through the company that installed the panels, I use this https://www.solaredge.com/nl/mysolaredge It's pretty great to be honest :)
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