SaaS

Remember when you used to buy software in a box at Best Buy? You'd pay $200 for Microsoft Office, install it from a CD, and that was it. You owned it.

SaaS flipped that model on its head. Instead of paying once, you pay monthly. Instead of installing software on your computer, you use it in your browser. Netflix is SaaS for movies. Spotify is SaaS for music. Google Docs is SaaS for writing. Slack, Zoom, Dropbox, Canva — all SaaS.

Why did this take over? Because for the company, getting $15/month from a million people is way better than selling a $200 box once. It's predictable revenue. And for you, you always get the latest version without buying an upgrade.

If you're thinking about building anything in tech, SaaS is the business model everyone chases. The magic word is "recurring revenue" — money that shows up every month without you having to re-sell anything. Build something people pay for monthly, and you've got yourself a money machine. That's why every tech bro on Twitter talks about "building SaaS."

SaaS is a cloud computing delivery model where software is hosted centrally and licensed on a subscription basis. Key metrics include MRR (Monthly Recurring Revenue), churn rate, LTV (Lifetime Value), and CAC (Customer Acquisition Cost). Multi-tenancy architecture allows a single instance to serve multiple customers. The SaaS model benefits from high gross margins (typically 70-85%) and scalable distribution.