Biggest wealth creation opportunity is SaaS

0:28I don't know what to tell you. TikTok, advisor to Reddit. I built and sold three venture-backed companies. I've been in the arena, as Tramath says. And today I'm going to actually just tell you, here's 30 steps for how you could be thinking about building a software as a service company now.

0:53I'm not going to give you the silver platter. I'm not going to give you the, here's the one idea that you should do so that you can actually build it. But what I am going to do is here's the framework for it all. I'm going to walk you through, in this episode, I'm going to walk you through each of the frameworks and the steps of the frameworks for how you can go and build with AI a software as a service startup. So let's get right into it. The first thing is you're going to want to go ahead and start with a sub-niche inside a big market. You're going to have to find a big market. And a big market could be something like, I mean, we're talking huge here, finance.

1:32So what's a sub-niche? Well, FIRE, Financial Independence Retire Early, which is a movement within the finance movement for Gen Zs, might be the sub-niche in it. So you can use AI, you can use tools like ideabrowser.com to find some of these niches. but you want to go into the sub-niches. Don't make a mistake of trying to build something for a huge market because that's where the venture boys are playing. This is for the people who want to build a cash-flowing startup that maybe they could raise venture later but right now it's about building a cash-flowing startup $100 ,000 a month,$1 million a month type thing.

2:19That's what you're going to want to do first. Second, you're going to want to map this sub-niche's workflow end-to-end. I'll give you an example of just a local roofing company. So the owner's daily workflow end-to-end. And by the way, you can use AI to go and help you figure out these workflows. So step one, check new leads, website form, Google ads, Facebook messages. Step two, respond to homeowner and qualify the job. Step three, schedule a site visit. Step four, drive to the house. Step five, take photos. Step six, estimate materials. Step six, write and send a quote. Follow up, negotiate.

3:00It doesn't matter what the exact steps are, right? The thing here that matters is you have to map the workflow end to end. You can either do this manually, i.e., you're calling up, in this example, you're calling up owners. You're trying to ask them, you know, how do I, you know, what do you do in your day to day basis? Or you might be an owner of a local roofing company or you might work in a local roofing company. So you might be that person yourself. So, you know, the workflow. So in your head, trapped in your head, you have the insights in order to actually go and do it. So and then the third option, obviously, is you can use AI.

3:40You can go to Manus and ask it to figure it out for you. You can go to Claude Code. You can go to, if you're using OpenClaude, you can use ChatGPT. So figure that out. Those are the three ways of doing it. Super important to have a dialed workflow end-to-end. Then you're going to want to identify where money changes hands. because where money changes hands, i.e., you know, in this example, negotiate scope or price, collect deposit, order materials for suppliers, that's where you're going to be able to create some like wedge in software and sort of take a piece of that pie. So that's an important piece here.

4:25You can highlight that. You could be doing this on like a fig jam. You can be doing this on an Excalibur. You can be doing this on pen and paper where you're writing out these workflows, Google Docs, it doesn't matter, but highlighting where money change hands is really important. Step four is spotting repetitive mechanical steps. Why do you want to do that? Well, you want to do that because that's where there's an opportunity to do some sort of, you know, agent or automation. So you're going to want to spot those. And then, you know, again, take note of what that is. So for example, checking new leads, website form, Google ads, Facebook messages, phone calls that might take five minutes uh every day or 10 minutes every day and if you can save people in this owner 10 minutes every day what's that worth to him well if that person is making 250 thousand dollars a year 500 thousand dollars a year a million dollars a year you can literally quantify that and it becomes thousands of dollars and then so if you can say hey i'm going to save you 50 hours of time this year 100 hours of time this year 150 hours of time this year what's that worth it to you and if you're you know chart uh if that person's time is worth four hundred dollars an hour then you can go and just be like well i'm gonna go ahead and save you all that time and you're gonna be able to make more money so that's step four step five is you're gonna quantify the cost of those steps so i kind of just talked a little bit uh about that um quick break to invite you to something now this isn't an ad i just want to invite you to a free event because i think that you're going to get a lot out of it.

6:00I wanted to take one hour of time where we just talk about building businesses in the age AI. People say SaaS is dying. I actually believe the quite opposite. I think that SaaS is just evolving. I think right now is an incredible time to be building software startups that help you craft your dream life. And for all those reasons, I said, let's just book one hour of time. It's going to be 11 a.m. March 12th. That's a Thursday where we can go and lock in and just talk about building businesses in the AJI. I'll include a link in the description in the show notes to join. And I can't wait to see you there.

6:37Step six is create scroll stopping content around that workflow. You're going to not just want to create a product, my friends. No, no, no, no, no. You're going to want to create media. You're going to go on ahead and, you know, create an Instagram, create a TikTok, create an X, pick one channel that you're going to focus on and build an audience around that. It's easier said than done. Create scroll stopping content. I know what you're thinking. Easy for you to say or that sounds easy, but it really isn't. And you're right. But the truth is you can use AI to go and research, ask it in this niche, how are people going viral?

7:25You can even ask a Manus, a Claude Code, a ChatGPT, just like content ideas. What are some content ideas that would go viral in this niche? And ask it to create a calendar for you. So you can use it as an AI CMO. and the best thing you can do is, in my opinion, use something like Manus or use something like Cloud Code and create some automations around making a repetitive task around getting content ideas, giving script ideas and creating content. You can use AI to create some of that content. I'm starting to see AI videos that are actually like, you can barely tell that they're AI videos. You can use AI videos.

8:24You can either do it yourself, you can record it yourself. You can do faceless content. But the point here is, and you can also use something like an open claw that actually just does this all repetitive for you. Clawed co-work. I could do a whole episode on this number six. People let me know if that's interesting. But the point here is that you're going to use some AI automation to come up with ideas for you, research for you, scripts for you, ideas, and you're going to push it to the limit. You're not just going to be like, give me content ideas. No, you're going to push it to the limit and ask it to give you non-obvious ideas, consistently providing a context, and then doing scheduled tasks so you're getting this on a daily basis.

9:08You're going to want to study step seven. Study posts that get saves, replies, DMs. Sounds obvious, but a lot of people don't do it. I recently have been posting on Instagram over the last six, seven, eight months. And I look at, I can pull it up here. I look at, pull it up here, like the insights, view insights. And I could see right here, in my latest video. It's got 2 ,700 likes, 5 ,000 bookmarks. And I could just see basically how it compares to other videos. And you develop this intuition around your content. You develop your intuition and content. And by the way, why do we care about content?

9:59We care about content because, yes, you're going to build an audience and then hopefully you can sell this tool that you're building. We don't want to forget we're building a SaaS tool. But the other piece of it is when you create content, that could be used as ads. So you're going to want to double down on organic angles that convert, but you're also going to want to run step nine, paid ads on the proven organic winners. because once you've shown that you can prove organically that you're getting some traction, there's a good chance that those organic pieces of content will be able to work as standalone ads with some good ROI.

10:45Now, I'm not saying every single organic piece of content that goes viral. When I say viral, I mean viral within your niche. So that could even be 60 likes, 80 likes, 120 likes. Depends how big your niche is or small your niche is. Point here is that there's a good chance that if it works on organic, it will work on paid. And that's going to be huge for you. Mistake a lot of people make. Step 10, capture emails from day one. Your email list is your, it's like your foundation. You know, when sales are down, you can just go and email that list and be like, you know, we're doing a discount or we're doing an event or, you know, because you can't rely on social either ads or even your organic that it's going to work, right?

11:40So having that list of people who are interested in your brand, in what you're doing is going to be key. Step 11, manually perform the workflow. So now that we've mapped out this workflow, you're going to want to manually do it. Now, why do you want to manually do it? Manually is going to help you basically learn about how to actually perform this piece of work. So when I say manually, what I mean is a lot of these future of SaaS businesses are actually going to start off as service businesses with human beings at the core of it. It's actually going to start as being you, the person to actually go and fulfill the task.

12:26And I know that might not be sexy. And I know that people look at that and be like, well, that's not what I signed up for. I signed up to create this software business that is going to work 24-7, is going to have high enterprise value, that allowed me to quit my job, is going to hopefully sell for a lot of money one day. Well, yes, that could be one reason why you want to do this. But the point here is that you need to really, really be dialed around how to actually perform the outcome. So maybe you've done this in a past life. For example, in the owner of the roofing company, maybe you were that owner in the past, so you know how to do it.

13:14But you're going to want to manually perform it probably from the start. You're going to want to step 12, document every step precisely. And step 13, you're going to want to separate judgment from mechanical tasks. This is a really important step. AI is incredible, incredible at mechanical tasks. And in judgment, sometimes it's good and sometimes it's bad. So you're going to want to start with mechanical tasks, which leads me to step 14, which is you're going to want to turn your mechanical tasks into agent workflows. That's the opportunity here. If you can create those agent workflows, automate a lot of that stuff, that's where a lot of the value is going to be.

13:54Step 15, you're going to want to design agents to complete the full tasks. Step 16, connect agents to real tools. So this is using things like MCP. But the idea here is your agents are going to need skills and tools to actually go and perform these tasks. So that's why you might need to have it hook up to email, have it hook up to Slack, have it hook up to CRM, have it hook up to Stripe. You can obviously imagine in the example I gave with the roofing company where you'd have things like email integration like over here, Facebook integration, Stripe, etc. It's going to need access to that. In the beginning, you're going to do this manually, but eventually the agents will have access to these tools.

14:47Step 17, add orchestration, retries, and verifications. I actually saw a really good tweet by my good friend, Scott Belsky, on orchestration. Let me see if I can pull it up. First of all, Scott, legend, used to run product at Adobe, one of the best seed investors I know. invested in some of the biggest consumer companies that you probably use. And he says, The orchestration layer is the new interface layer. As we spend our day coordinating agent workflows in a model-agnostic fashion, local and cloud, and validating outputs, human-in-the-loop, and resolving issues, the ultimate layer to own is where coordination takes place.

15:37so I think he's absolutely right I see some replies here we've entered the conductors era so a lot of talk right now on this orchestration layer orchestrating agents and that's kind of what you're going to be doing when you're building your new software you're going to be orchestrating the agents, the outcomes and the resolutions are the end goal. And I think this is just a new paradigm, a new way of thinking around building software. And here's another good reply. If coordination becomes the choke point, whoever owns that layer owns the flow. So I cannot agree more. I think this is where it's going.

16:25So yeah, going back to here, step 17, you're going to want to add that orchestration retries and verifications layer. Step 18, you're going to want to store user preferences. So as people are using the product, that's going to be a little bit of your moat. The user preferences, how they're using it, and then the memory, long-term memory, into your agent SaaS is going to be an important piece as well. You're going to want to, step 19, launch narrow with high-touch onboarding. So it's very tempting to do onboarding, like a sign-up flow and stuff like that that's very short, sweet. But you want to really get to know the customers, get as much data as possible.

17:13Obviously you're not going to be able to ask them a thousand questions. So you have to basically figure out what is the right amount of asking in terms of onboarding to make the experience good, but also to create a moat for you. Because what I don't want you to do is create something that has basically a very, like you're not getting the right data into the product or you're expecting it later. And that also doesn't make the experience good for the customer, could be better. And or competitors come and just knock you out of your stocks. By the way, while we're building the product, Just so we're on the same page, we're creating content like what we talked about before.

18:02We're putting up one piece of content minimum every single day. We're trying ads on the ones that work. And we're trying to really understand and build that foundation of a media company at the core of this. Step 20, publish measurable proof. So going back to, remember we talked about how you're saving time for the owner of the business? Well, what is that in terms of revenue hours saved? Step 21 is move pricing for per seat to per task. And this is one of the reasons why a lot of SaaS companies in the public markets are down 30%, 40%, 50 % from all-time highs. They're scared that not only are people going to be able to vibe code or use AI to create competitors to whatever product it is, Salesforce, whatever.

19:03But it's also the per seat model is sort of losing its allure and people just want per tasks and AI age. Do this thing for me, complete this workflow. And this workflow to me is worth$200 every time you do it. And that's where it's going. And you, as the person building this future of SaaS, you will be able to compete better against the existing products in your space for two reasons. Well, for a few reasons. One is, we've gone more sub-niche, right? So you can compete against the big venture-backed people because you're a bit more bespoke. you are building media at the core of what you're doing.

19:57So you have this unfair advantage around not only an audience, but you're building email newsletter and you're also doubling down on paid ads. So you're able to basically do better ads than a lot of the competition. And then you're using AI and agents to actually fulfill the work. then that's better than having humans.

20:30Of course AI hallucinates, right? But if you do it right and you do it in a small way and you don't overload with contacts and you're doing checks and stuff like that, you will be able to get incredible results. So I think because of that, and also it's going to cost less, Your cost structure is obviously less. You don't need to raise millions of dollars if you don't want to. You don't need huge teams of people. You'll be able to be more cost effective and you'll be able to move from a per seat basis to a per task. You don't need to start by per task if you don't want to. You can actually start by per seat if it's easier or whatever.

21:16But my point here is eventually you're going to want to make your way to a per task basis. And that's going to shift you, step 22, to outcome pricing. That is the goal here. Step 23, as your value compounds, as you go and add more workflows, as you go and do a better job of adding workflows, as you build your brand so you have more trust, you can increase pricing as that value compounds. Once you've finished this workflow, say you've actually gone and just, you've done it. You've built this really good AI agent software that goes and does this better than anyone and it works and you feel like you probably can't get more LTV out of it given the product offering.

22:07That's when you can go and explore basically increasing into different adjacent workflows, adding different adjacent workflows. People here also can think about, do I want to buy another company? Do I want to build it myself? A lot of time here, you might not want to buy something. You might just be like, AI is so easy to create the product now. You might just want to build the product yourself. But this is going to lead you to step 25, orchestrate multiple agents across the lifecycle. Step 26, build switching costs through data and memory. We talked a little bit about that before, but you're going to always want to layer on more data, more memory.

22:49Now you have multiple agents across the lifecycle. You're probably in a few different workflows. Step 27, turn those power users into public case studies. By this time, you probably have these power users, hopefully some that are well-known in the sub-niche. Turn those into public case studies. When I say that, don't just create articles, tweets, that sort of thing. I'm talking about full-on send a camera crew or go yourself and film these people and showcase that and then put paid spend around that as well. Step 28, hire operators from inside the niche. At this point, you're probably making money, profit.

23:31Go and reinvest that in hiring operators. Step 29, reinvest profits into distribution and product depth. you're now probably in an adjacent workflow. But you can also just go deeper and then also start spending a lot more money on content, a lot more money on paid ads. But when you get to step 30, the goal here is you become the default execution layer for that sub-niche. I don't know how this doesn't fire you up. If you've made it to the end of this, I hope are seeing this and being like, yes, SaaS is being disrupted right now. People say SaaS is dead. I don't know if SaaS is dead. It's not dead, it's evolving.

24:26And this is what it's evolving towards. I've handed you the playbook and the framework on a silver platter. I cannot wait to see what you build. I am totally rooting for you. I'm so excited for what you do with this, what you end up building, and how it ends up creating impact in whatever niche you create, in whatever communities you pick, and in your own family and personal lives. My name is Greg Eisenberg. This is the Startup Ideas Podcast. If you enjoy this, give it a like, comment, and I'll keep doing this, do more. I have so much fun just sharing as much sauce as possible. And I thank you for being here with me, for spending your time with me.

25:13And I won't let you down. I will just continue firing sauce into your ears if you're listening on Spotify and Apple and into your corneas, your irises, your eyes, if you're on YouTube. This has been awesome. Future of Sass. That's this episode of the pod.