The Bread Paradox: Why Convenience Wins and SaaS Isn't Doomed

The risk for SaaS isn't that customers will build their own but that the barrier to entry for competitors is lower.

The Chorleywood process created mega bakeries that displaced regular bakeries because they changed the economics. AI is doing the same and fundamentally changing the economics of production. What used to take years and huge teams to build can be built by much smaller teams much faster.

SaaS isn't going to sublimate straight into consumer built tools but the boiling point for competition has gotten a lot lower.

Unlike most articles that butcher an analogy so badly that you wish they could have just described the concept plainly, this one uses the analogy really well. It carries it from start to finish without overstretching it.

This line captures the essence of the article and is going to stick with me forever:

> SaaS is the bread, not the bread machine.

And yes, SaaS companies that understand that they sell convenience and accountability will be the ones that survive this AI rush. New ones could emerge too.

I think this is true, but there's also another thing here: The software market is incredibly complex, and much of the "SaaS is dead because I can vibe-code custom software" voices don't understand why certain products are bought.

Let's take project/task management stuff. You can vibe-code a kanban board, task tracker with different statuses, and project folders quite easily.

For my personal use, I can probably build a "better" Jira. I could have an agreeable interface, a data model molded to the types of projects I work on and how I work on them, useful constraints that assuage my weaknesses (e.g. you can't have more than 3 active projects), and a persistent list of things I've shipped to combat imposter syndrome.

That solution would be far too opinionated to scale across even a small team, let alone an enterprise.

Companies buy Jira because it integrates with just about everything, because it's the de-facto standard so you don't need to teach people how to use it, and because you have all the SSO, workflows, approval policies, RBAC, etc. anyone could want.

SaaS vendors don't compete to offer the core features, but the genuinely hard stuff.

This went straight from medieval guilds to the 1920s, but actual bread mass production started in the Victorian era, and people did have a big negative reaction to that. They adulterated bread in ways that poisoned consumers during that period, which was a tad unpopular.

That drove consumers to some curious brands: https://en.wikipedia.org/wiki/Aerated_Bread_Company

I completely agree that people are vastly undervaluing convenience, reliability and SaaS being essentially a great way to make something “someone else’s problem”.

The count argument would be that building with AI will potentially give you infinite customizability, which is especially attractive if you’ve ever hit a brick wall using a line-of-business SaaS product. It works great until you hit that wall.

But again, I think this counter argument oversells the value of customization. Most users-would-be-builders would happily build a monstrosity that doesn’t even serve themselves well, if you let them. Building good workflows (and therefore good SaaS products) is not nearly as easy or straightforward as it seems.

The underlying MBA principle is that companies strongly prefer to focus on their "core competencies." This makes sense because the distraction to a business could be much costlier than the extra money spent in outsourcing non-core functions.

This is basically also why the cloud business was thriving even when on-prem is much cheaper in monetary terms, and why the trend will probably extend to cloud AI providers even when open weight models get better. (As an example, Linux is free, but MSFT makes a ton of money off it by renting out the hardware it runs on.)

That said, there will likely also be a very large volume of internal SaaS-y apps that enterprises will vibe-code simply because nothing on the market meets their needs and/or price point.

Another possibility is enterprises "remixing" existing SaaS apps for custom functionality by adding their own vibecoded layers on top of the SaaS endpoints. Either invoking official APIs where available, or by less official means like using custom browser extensions. Now that could lead to some interesting dynamics...

This is one of the best articles I've seen come across HN lately. You presented a well structured argument, and one I strongly believe in.

I had a conversation with someone the other day, trying to convince them how easy it would be to solve a problem they had by creating a quick program with Claude. They were so computer averse, so used to thinking that coding was some impossible task, that they refused to even try or let me show them.

SaaS isn't dead at all. In fact, I think we may have just entered the golden age