SaaS isn't dead. It just moved down a level.

There is a popular consensus right now that AI killed SaaS. The argument goes that if anyone can prompt an application into existence in an afternoon, nobody will pay for software subscriptions anymore.

I think that gets the economics backwards.

What is dying is bloated, one-size-fits-all SaaS. For the last fifteen years, building software was so expensive that every software company had to chase massive horizontal markets to pay back its engineering payroll. A product that started as a simple tool for ten-person shops inevitably grew fifty menus, complex permission tiers, and an enterprise sales team pushing annual contracts.

Small business owners got trapped by the old corporate line: nobody ever got fired for buying Salesforce. They sat through endless sales demos with reps who didn’t understand their business, signed up for expensive per-seat subscriptions, and ended up using ten percent of the platform while keeping their real work in spreadsheets.

Meanwhile, the “just vibe-code your own app” crowd misses something equally obvious: a small business owner running an accounting firm or a contracting company does not want to maintain a database, debug Stripe webhooks, or worry about multi-tenant security at 11pm on a Tuesday. They want software that works.

So SaaS didn’t die. It moved down a level.

When one experienced developer paired with AI can build and maintain what used to take a fifteen-person engineering team, two things become viable that never made financial sense before:

1. Hyper-niche software. You don’t need ten thousand customers to justify building a product anymore. My wife runs a CPA firm. Every practice management suite on the market was getting in her way during tax season, so she walked me through the exact pain points and I built CPA Relay to her specs. A small, focused product built around how one trade actually works beats a generic platform every time.
2. Customizable software as a service. Because modifying and extending a clean codebase is now so fast, the boundary between “off-the-shelf product” and “custom software” is disappearing. Instead of forcing a business to bend its operations around a rigid SaaS tool, you can take a solid base product and tailor it directly to how that specific company runs—for a fraction of what agencies used to charge for a discovery phase.

Small businesses don’t need another bloated platform with a chatbot bolted onto the corner. They need smaller, sharper software that fits the way they actually work.