Glad to see them on HN, but a bit disappointed in the response. They article is mostly correct in it’s lampooning.
Even if you disagree with points or find it ironic that they offer a subscription (btw equating producing a publication with SaaS is quite erroneous) — I think its useful to take this as a datapoint on how people outside tech see tech. That matters.
People think that building a software program is like building a house. And, I grant, in some ways it is. But in the end, the customer is not paying for anything tangible. He's paying for words and ideas.
No new words or ideas show up next month on your software, so why should I keep paying you? I know you’ll say maintenance and updates, but from the user’s perspective there is quite the difference.
X-user kepano (who is a/the creator of Obsidian) has some nice insights on this _file over app_ philosophy.
No. He is the current CEO, an excellent communicator and definitely the right person for the job, but he wasn't there in the beginning and nothing meaningfully changed about Obsidian's philosophy since for it to be attributed solely to him.
I don't disagree with him on anything in particular, it just feels bad to see the two equated. Original devs wanted to spend their time on actually making the thing, so they hired a CEO. They even picked from the community, kepano was the developer of the most popular Obsidian theme well before he got hired, but he is absolutely not the creator of Obsidian. When he joined, Obsidian already existed.
He's also not the only community hire either, there's at least one or two more people that started as plugin developers before they got hired.
It becomes a bit more complicated if the data has to be in a specified shape and can only partially be authored by any individual due to authorization requirements. Having a single source of truth on a server is quite a bit easier to reason about and design in this case.
I don't know where Obsidian stands on this, but I assume that if it has collaborative features or complex data constraints it has to do some quite sophisticated stuff to make it work reliably.
It has neither of these things - it is aimed at individual (non-collaborative) use, and is intentionally very open and structureless. It is uniquely positioned to succeed with their chosen business model.
You also have to pay for commercial usage. And may choose to pay for early access to updates.
It's still miles ahead of other offerings when it comes to having the data be "open", but I found this limitation frustrating.
Gross profit is a misleading statistic in the software industry, where almost all of the effort comes from building the thing.
> Some SaaS companies achieve gross profit margins of 75 to 90 percent, rivaling Windows in its monopolistic heyday. Even the reigning credit-card duopoly of Visa and Mastercard wield a mere 51 percent net margin.
I don't see how anyone can say the above statement or comparison isn't a bit misleading, as the Gross Margin of Visa and Mastercard will be closer to 100% than to 50%.
In reality it's unsurprising that software looks really profitable when you remove all the costs of developing the software.
Exercise: compare net profit of Visa/Master card to net profit of those "highly profitable" saas marvels.
Exercise two: compare gross profits of them.
Result: whole paragraph turns not being true while not aligned with the article opinion and showing actually opposite :-D
p.s. I do agree with the overall article :)
The margin in the former case is much lower since people need to perpetually invest time to create good content. Which is the whole point of this article - this isn't correct for the latter.
they are domestic terrorists if you ask me... because for the majority of people effected by them, its terrorifying. the way they operate is not in our countries/market best interest, but only the interests of a top few, who frankly include real global terrorists as members of the fund. The US should start to investigate PE, PE is crushing the economy under its own weight of consolidation and it hurts every day people.
Now that small business owners are watching/listening constantly to small business gurus and hustle gurus, those businesses are screwing customers in ways I didnt see 20 years ago.
I keep in contact with many small business owners in construction and repair, and almost everyone now thinks that its better to get less work and just charge more. Sure they could pour 3 driveways a week and make $2k profit per driveway, but honestly they prefer to do and make $6k profit on 1 driveway a week and call it a day. I see this constantly in small low employee count construction companies.
I don’t see what MBAs have to do with that, it’s a tale as old as time: given the choice to have the same pay and more leisure time, most people will take more leisure time. The exceptions are probably mostly people doing intellectual labor, not physical labor like pouring driveways.
If like many I see, they may also spend the spare time creating TikTok and Instagram videos how $12k is the absolute minimum a drive should cost
There must be sufficient amount of wealthy people needing jobs done who won't question quotes that the rest of us are just screwed and have to resort to DIY
Its PE, nothing else to say and its Thoma Bravo most of all.
SaaS exists because managing software is hard. The easiest way to get money from a company is to make problems go away. SaaS means your data is stored remotely (you don't have to worry about maintaining your own servers, Databases, synchronization, liability goes to the SaaS company), updates come when they come (your internal support couldn't help, it's someone else's problem anyway), the spread sheets they are replacing were hated anyway and caused constant problems.
How are you managing VPN access to file servers? How about backups/versioning? Any searching? Access control that can be easily managed by end users? Data governance, RBAC, compliance audits? BYOD/mobile device access?
In the large enterprise where I work, I've often argued against building our own in-house XYZ with the position "do we want to be in the business of building and maintaining XYZ or do we want to focus on our core business?"
In some cases it definitely makes sense to build something yourself, but in plenty of cases, paying an external company a recurring fee (that is probably less than the ongoing capital you'd spend doing it yourself) is absolutely the right business decision.
Plus, I've rarely seen one-off non-core internal "products" at a company actually be better than the product that a specialized company can offer.
User experience matters, the tools and software your employees use should be held to the same quality bar as what you offer your customers.
And let me tell you, internally built software rarely comes close to that bar.
The people who will be the ones using the software the most would oppose the decision if they were involved, but they weren't. They begin using the software, and it becomes clear that there are numerous problems - either bugs or, more common and insidious, incompatibility and inflexibility. But now there are high-status people in the org that have reputation staked on the success of the adoption, so they continue to shove a square peg (or just a bunch of shit) through a round hole. The software becomes embedded in the org's operations, and the costs to disentangle it become high. This is how software that does not improve things can be "successful".
I have seen this happen over and over. It is of course the fault of the org for allowing this to happen.
Ah, there’s the capitalist’s circular religious belief, if it’s profitable it must be good, and it’s good because it’s profitable.
Except some of the best things in life are not profitable, and some of the most profitable models are not good (such as Facebook/Google’s privacy invasions and the ad-driven model).
To think that subscribers pay money because they see a “reasonable value exchange” is to be completely blind to the incentives behind many big ticket software purchases. Managers pick IBM/Microsoft/Slack just so they can’t get fired for failed boondoggles or because they don’t care about anything except maintaining the status quo. Startups choose certain SaaS tools because they’re part of the same VC-funded slosh-it-around party. There’s just so many millions to be made by selling to fly-by-night startups or clueless bureaucratic enterprises or government that you don’t actually need to be innovative or useful to “make it” in todays tech world. You just need to know how to play the game. There are exceptions and true innovators of course, like OpenAI or Apple or AirBnB but those are rare.
It misses the key point of the economics of subscriptions: a single up front fee is a disincentive to the constant maintenance that delivers the single biggest piece of value to the customer, that being the continued existence of the software. Instead it creates an incentive to add lines to the marketing BS on this year’s release and prioritises new customers over existing.
A subscription fee required to avoid that the application you are using will be disabled remotely seems unacceptable.
The latter certainly does not create any incentive for the software vendor to improve the quality of their product and to fix its bugs.
On the contrary, the latter business model provides a stream of revenue for no work, so the vendor is encouraged to stop any maintenance work for their product, much more than when the customer makes a one-time payment. This has been amply demonstrated by the behavior of Adobe, Broadcom and the like.
Then anyone on Excel 2013 couldn't use any new features because they weren't backwards-compatible 10 years to some public sector organizations that refused to update.
Office 365 is so much better, I can actually send someone a file that uses LAMBDAs or uses PowerQuery and expect them to be able to open it.
- Does reading The Baffler trap you in its ecosystem? If you cancel The Baffler do you lose functionality?
- If The Baffler closes up shop because it was bought by a larger newsletter does it brick any of your devices?
- I turned uBlock off for this page (it was blocking 6 things) and there are no ads. Can you say the same thing for Netflix or fricking Windows?
- Does The Baffler take what you give it and resell it because its 5,000 word privacy policy which you didn't read but had to agree to says it can?
- Will The Baffler's third rate security practices release your identity and those of your customers to private auctions on the dark web?
This is how the article supports itself. Looks like it's about $5 per article.
Still though it's interesting how you put it. In a period where everybody expects web content for free, we're paying literally trillions to subscribe to software products. As somebody who works for a content organization I'm now asking myself what aspects of the SaSS model can we take up to get people to pay our writers and editors to continue producing local news? I guess we just need to figure out what content people are keeping in spreadsheets.
