How the evolution of books, music, and software through through the last few decades have created a culture of SaaS (Software as a Service).
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Amanda: Hey Nathan, how are you?
Nathan: Great. Amanda, how are you?
Amanda: Great. Are you ready to talk about working in SaaS? There are so many ways that we can talk about SaaS. How does this work and how does that work?
Nathan: Yeah, it’s a pretty big area. So where should we start?
Amanda: How would you define it?
Nathan: SaaS is software that you rent rather than buy, right? In the very old days, you would go and buy CD ROMs or DVDs of software, and you would buy your copy of Photoshop or QuickBooks or whatever for the year, and then they would introduce another one the next year, which you wouldn’t have to necessarily upgrade to unless you wanted to go to the store again and get the new version that had new features. SaaS kind of changed that 37 Signals launched Basecamp project management software. That was one of the first major SaaS applications that really took off . Now there’s tons of them, but that. Change the model to say, instead of buying the software for 400 a year, when you choose to, instead, it’ll be 49 a month and you pay every month. If you stop paying, it goes away. As long as you pay your subscription, you get access to it and it’s going to get updated constantly. Some of it I think was pushed because of the change of development style, right? With ROMs and DVDs and physical boxes, you can really only afford to do a new version every year, just through the supply chain of distribution. , but with web software, you can push a new version every hour, right? And there could be a tiny little improvement. And So SaaS, I think it was the natural evolution of that.
Amanda: That just brought me back to my childhood where , yeah, you would get the little CD ROMs and it would be Windows. 98. I hope that was a year that there was one, but you know, you get Windows 98 and that would be , you’d have to download it. And I remember , there were all those issues with licensing and how many times it was downloaded
Nathan: yeah. And there was also a period where they would do that, but it Computers weren’t ubiquitously internet connected, so they would have license keys that were just mysterious numbers, but they didn’t actually go and check against the internet, so then license keys would get shared around. Yes, it was a very weird, weird transition.
Amanda: Now you’re making me want to have this conversation with my mom because she worked in it, her whole career. She was , I was a woman in it in the eighties which is cool. I can’t tell you how many times she’s jerry-rigged systems around the way software used to be implemented. She’s the old school, eighties, nineties, IT workaround sneaky type lady, but I think SaaS it’s just this whole new wave of doing things. And it’s so different from how it used to function before.
Nathan: Yeah. And some people really like it. I think there’s a lot of positives and, and, admittedly negatives of it. Right? People don’t like the idea of a subscription, even if they would have spent that same amount of money. Anyway, people liked buying Photoshop three and then deciding for themselves. Whether they were going to buy Photoshop for, or whether they’re just going to skip a year and wait until Photoshop 5 ends. It was a big investment. would go and buy, and it came with a huge book and , you know, eight CDs and clip art and all this stuff, and it was 700 in the nineties, so a lot of money. , but then you could wait and that’s gone. And so people feel there’s a lot of fatigue around having a million subscriptions and I don’t own any of it. And if I stop paying, it goes away. on the other side, right? . I don’t like having to pay for Spotify every month, but I mean, I spent , you know, 15 US dollars in 1990 on CDs, one CD I would save up. And now for , less than that, way less than that with inflation, you can have every song in the world. Right. And I certainly spent more than 15 a month. Through my, you know, years in high school on music, and this is just a totally different model.
Amanda: Yeah. But with music to that point, you’re not just paying, you’re not just paying for those songs. . You own that CD and there’s a picture of the artist on the cover. And it’s a physical thing that you can hold and load into your CD player. And then you pull out the, you know, the cover leaflet and you can sing along because all the lyrics are printed in there I know they do the lyrics on Spotify now, but I’m , there, it is something.
That is interesting when you think about the way software has changed, almost the groundedness of a product.
Nathan: Yeah, and with music, I think it’s, it’s changed, but what you’re describing is a very physical thing. I have this thing. I have a box up in the corner of my closet that has my 300 CDs that I bought through middle school and high school that I will not let my wife throw away.
I’ve moved it three or four times across the last eight years. I’ve opened it zero times.
Amanda: At first I thought you were going to say you moved to the box, three times to keep hiding it from your wife. And I was , that’s, that’s the funniest thing I’ve ever heard. She keeps trying to throw out your CDs and you keep rehiding the box somewhere else in the home. And then I was , Oh no, you’re moving it from place to place
Nathan: I have no CD player anywhere in my house except an old PlayStation that is unplugged. I could theoretically play it through my TV, which would be super weird and terrible. , even my cars don’t have a CD player.
No computer has a CD player. I can’t actually play this CD.
When it was starting to change, I was , Oh, I’m never getting rid of my CDs. I ripped them all into iTunes. I had every song you would put your CD into iTunes and you could basically throw the CD away, but I would keep it.
I’m , Oh, I’m never getting rid of these. but it doesn’t actually serve a super useful purpose.
Amanda: I mean, you never know, records made a comeback. Because it’s mechanical, right? It’s not even being read digitally. Well, how do records work? It’s being read mechanically, right? Because it has a little arm. Okay. But I, I hear you , look, this is. I mean, it’s a little messy looking, but I have all my books and I have been given a Kindle before. I don’t want it. And someone’s , yes, but you could have all of that live in something this big and it wouldn’t get, you know, destroyed when you drop it into the ocean when you’re at the beach. And well, no, that would get destroyed if you dropped it into the ocean, but you know what I mean? You put it in a plastic bag and still use it and read it and whatever.
Nathan: I think people have preferences and people are kind of just stuck in, , they liked something at one point and then, you know, They don’t want to change, right? They like that experience. They want to have it. And I think there’s, there’s also a positives to some of these changes.
Amanda: I was going to ask, it’s the same way that some people have preferences when it comes to books, right? Some people are, “Oh, I have my Kindle. I love my Kindle.” That’s my entire family. I love my books.
Do you want to borrow this paperback? I’ll bring it home. I’ll deliver it to my mom or to one of my sisters. And I’ll see it sitting on their desk. Weeks later and I’m , oh, you didn’t want to read it. And they’re , oh, I just downloaded it on my Kindle. I’m halfway through.
Nathan: I read books in a way I would have never before, I’ll, I’ll download it on Kindle and on audible and they sync between each other so I can in bed, read at night, and then when I’m driving my daughter to school, I can pick up on audible and it knows exactly where I am and then. I can park the car and come inside. And then that night in bed again, I’m at that new point in the book on the Kindle. , so there’s entirely new experiences and I can read through books much faster that way than I ever could have before. with music, I have had this very tortured resistance and. , I still have my CDs in the closet and I just listened to Spotify, but Spotify is really good at helping you discover new music and they have their release radar when things are coming out and they have, you know, your personalized playlists and the algorithm.
Cause it. That has introduced me to music that I didn’t think I was going to listen to. And then the Spotify raft at the end of the year is a whole experience to see your most played songs. And they are all cool things that would have been possible and never would have happened incrementally, right?
There’s no path for going from a CD to any of those things easily. It takes an entirely new kind of paradigm to make that possible. And then all this new stuff happens that you would have never had otherwise.
Amanda: Yeah. I would like to call out that. Now that’s what I call music did attempt to do that to do not just one artist per CD. I do think they deserve some credit for that.
Nathan: Yeah, but it wasn’t personalized. I never liked, now that’s what I call music. , it was, it was the national compilation of, it was not anyone’s favorite CD, I would say.
Amanda: If that was your favorite CD, you are a serial killer, probably.
Nathan: Thing we’re talking about SaaS.
Amanda: Oh, we could go in either direction, in all of these industries, but with SaaS as well, sort of this change to a subscription based model has really democratized.
The space, right? You used to have Microsoft and everyone ran on Microsoft and everyone was buying the Microsoft CDs and they just had the biggest market share and the best distribution. And that’s just what everyone was using. And so whatever Microsoft put out. People were , well, that integrates with my other stuff.
And so I’ll just buy the next thing that they put out, but so what I think is interesting, it’s now there’s this shift and it’s kind of all, it’s come when you think about it, really quickly in the grand scheme of things.
This shift into, you know, being able to use different products, those products, having open APIs and people being able to self integrate things with each other. The internet and just globalization, I’ve got, this is too many thoughts all in one, but it’s, please do something with
Nathan: People have very polarizing thoughts about globalization and also Spotify and artists and The internet is responsible, I think, for the opening and broadening. I don’t know if it’s SaaS specifically. I think one thing that’s definitely happened has been the SaaS model of renting and monthly subscriptions opens a consistent business format where the business can continue to invest. Larger amounts of money. And there’s a predictability in the SaaS revenue on the business side that then they can staff around and they can really build up. It’s less of these spurts of effort, right? Let’s get a whole team together and we’re building Photoshop three, right? And then it’s a big, long project.
And then at the end, it’s , you’re, it’s , you’re making a movie. And at the end of the movie, you’re , it’s filmed, it’s edited, it’s out in theaters and , we’re done. And , we’ll decide if we’re doing a sequel. But all those people are going to go find other work. They’re going to get reallocated to other projects.
And then maybe we’ll do this whole thing again in a year, depending on who’s available. Right. So that’s, that cycle was how software used to work out of necessity, but now you have SaaS, which is . Monthly or annual subscriptions. And so the company knows how much money is coming in every month. They don’t have to wonder whether, you know, Amanda is going to go buy Photoshop for , they know that she probably needs it next month if she had it this month, it’s much more predictable. And so the same team can stay allocated and focused on solving one particular problem for customers and they can just get better and better.
And you don’t have those spurts of energy. And then the drop off is . They know they can’t sell a new version immediately thereafter. , so I think there’s a lot of benefit to the software and gets away from some of the feature bloat that used to get into desktop software, right? , because every year it’s , how are you going to make Microsoft Word more exciting than last year? Well, we got to say we added 16 new features that nobody cares about. Nobody’s asked for, nobody wants, nobody will ever use, but they’re on the checklist.
And so buy the new version for this year.
Amanda: Instead
of just Clippy, you can choose to have the dog or the cat.
Nathan: There you go.
Amanda: Nobody asked for that, I’m pretty sure.
Nathan: Marketing software will always be a tricky area, but with SaaS, it can be much more straightforward on the business side. You can really invest in things that are going to make the customers. experience better because instead of trying to kind of trick them into buying the new version, all you have to do is continue to make the product good and better enough for them to keep, right?
You just have to decide, am I going to pay next month for this thing? Did I get enough value out of it? Has it made my life better enough this month to do that?
Amanda: Is there ever a point where a product is just good enough, no changes needed, or do you think that’s an impossible point to reach?
Nathan: No, there is, there is a definite point where you reach it is good enough. Yeah, Microsoft Word might’ve been there after a couple of versions, that pressure to keep shipping a new version really contributed to the feature bloat. You might have that a little bit in SaaS as well.
And that’s where the subscription fatigue really. It’s frustrating for customers. It’s a product that can be pretty close to done. It can do the job that somebody needs done quite well. But there’s a lot of ways to improve software. You could improve software by just making it faster. , teams can spend a lot more time on the onboarding and just making sure setting up and getting started and becoming successful, , is. is easier. You know, there’s an integration with others to import things or to export things. There’s always a way that you can improve the software, if you are not noticeably improving the product for the people that are using it, you’re probably not going to be able to increase prices consistently.
Amanda: How are you assessing the value for the SaaS that you subscribe to?
Nathan: yeah, I mean, what, what are, what’s my alternative, I pay for an uptime monitor to make sure our websites are online and what’s my alternative? I frantically check every minute of the day to see if my website is online and when I’m standing in line for places and before I go to bed at night, the first thing when I wake up is my website online.
Of course, that’s crazy. And. Would take a lot of time and still wouldn’t be as good as a tool that checks every five minutes. And I pay, I don’t know, 10 a month for 20 websites that it checks or something. I mean, there’s no calculus to do because it’s so cheap. Compared to the alternative, me doing it manually.
So much better, I don’t evaluate that every month about whether I’m going to continue. As long as it continues to work, that’s what that product that hasn’t gotten a whole lot better, you know, since I signed up a few years ago. But it also doesn’t bother me. Cause it’s. Just something that is running and doing its job all the time.
I don’t have to think about, that’s good enough some products at that point where they’re just good enough, they’re great. They do their job reliably a hundred percent of the time. They don’t frustrate you. They don’t get in your way and you never have to think about them. And that’s. Just fine. And people will pay for that every month.
Amanda: I want to go back to a thought I had before because. You’re very people focused, you care a lot about your team and a lot of your team are developers and, you know, they’re building SaaS.
And you, you had mentioned earlier about how the way that SaaS operates, there’s all of these constant continual improvements that you can make to the product, which To your point has positives and negatives, positives being people are kind of in the work and they’re not taking long extended breaks I don’t want to equate it to reality TV, but it’s just , you’re just constantly filming and putting out episodes, right. They’re coming, you know, it’s just constant improvement. So from a people perspective, have you found the amount of work or the stress of work shifting at all as we’ve transitioned into SaaS, how is that different for engineers and developers?
Nathan: In my agency days before I was doing SAS and software products, it was great because I got to learn a lot of new technology stacks and I would, You know, try a bunch of different things and I would build something up and I would educate the client and we would, you know, build a system, but a lot of times, you know, they might run out of budget or the political winds would change within the business.
Right. And then in some way or another, the project would end. Or we achieved the original goal, but they wouldn’t approve the follow on work the project would end and then start over from scratch again and start over from scratch again. And , I ended up building a lot of similar systems and things that I was proud of and that did very well, , you know, in their objectives and would run at scale, but I didn’t get to work on the same thing for, Very long, very often.
A lot of them were three months projects, six months projects, maybe a client that we worked on with for a few years off and on. , but with, with a movie, with any kind of live event or something, right? There’s a crunch, there’s a push and it’s at a certain point, there’s 24 hours left and it’s just, it’s going to be what it’s going to be. We gotta get this out the door. , that pressure can force a lot of creativity and great things still come out, but. At a certain point, you start taking shortcuts cause you’re out of time, out of budget, there’s a lot of value and energy and excitement around building something really grand and large over time. So I think it’s a much more consistent and manageable pace, more a marathon than a sprint. some of the products we’ve been working on now, one’s about to turn 10 years old. You know, you get to work on the same thing and. You can really improve and craft the quality into the details that you never would be able to otherwise, if it was a one time effort, right?
It goes through waves, right? Think it’s much more energizing to work on something and see how far it’s come so by working on a big product, you get to work on all sorts of things about product and design and how is this going to be such a good product that someone who has never talked to us before can just click, sign up, put their credit card in and figure it out without any hand holding.
That’s a tremendous challenge. And then as the product grows and then all of a sudden we have, Thousands of people using it for very complex scenarios, the scalability challenges of the servers. And , how do we make this thing still perform quickly? That’s a whole new set of challenges. So for developers, I think it’s, I’ve had a much better experience working on products than I did in client services.
Amanda: Yeah, that all makes sense. I didn’t know any of that. I knowing stuff and now I know more stuff
Nathan: Eventually figured out that you just. just asking questions and hearing the answer.
