At SAAS NORTH, the founders are fighting for relevance, results and a new paradigm in artificial intelligence.
Just hours before he was scheduled to take part in the first vote of confidence in the 2025 budget, Canada's artificial intelligence (AI) minister stood a few blocks from the House of Commons and uttered one of his favorite phrases: “We live in the age of the entrepreneur.”
Evan Solomon, speaking on stage in the closing hours of the tenth annual SAAS NORTH conference, explained that the advent of artificial intelligence has given way to a “Gutenberg moment.”
“SaaS is becoming more competitive as the barrier to building software has fallen.”
Michael Litt
Vidyar
“People don't talk about the printing press, they talk about what happened after: the industries that were born, the technologies that were born,” he said. “It’s never been easier to come up with an idea and make it happen.”
While the phrase “the age of the entrepreneur” may seem like a flourishing proposition, SAAS NORTH attendees were confronted with an implied abundance of statements on stage and in showroom conversations. If anyone with a brain can start a business, then how can yours be special?
Over two days in Canada's capital, founders, investors and technology leaders reflected on how the conference's namesake software-as-a-service (SaaS) industry has changed and how founders can create value in a world once dominated by their business model.
In one of his first appearances on stage, StackAdapt co-founder and CEO Vitaly Pechersky reflected on how important it was to raise funding when his company was taking off in the 2010s. Pechersky's advertising platform reached $500 million in annual revenue. Estimate: $2.5 billion less than $5 million raised. But lacking the foresight in its early days, his team struggled—and failed—to raise seed funding after landing its first client. Pechersky noted that now “the scenarios are changing.”
“I mean, we were trying to raise money because I think we thought that was the scenario,” Pechersky said. “Lots of people 1762890598 We can say that we can achieve intelligent development in a natural way—really starting from zero to one—but many of these distribution systems did not exist at the time.”
RaaS instead of SaaS
SaaS is defined by a subscription pricing model that provides predictable annual revenue known as annual recurring revenue (ARR). However, the emergence of generative AI startup math changed. SaaS calculations now default to calculating monthly revenue and multiplying by 12, or annual revenue. This is what has allowed some companies, like AI app developer Lovable, to seemingly come out of nowhere and boast staggering revenue numbers in less than a year.
In short, the traditional approach to SaaS is dead. Vidyard and Garage Capital co-founder Michael Litt made a statement at SAAS NORTH, taking part in the BetaKit main stage, to spell out the cause of death: customer budgets cannot grow at the same rate as new SaaS businesses are being created.
“SaaS is becoming more competitive because the barrier to building software has fallen,” Litt said, highlighted by a list of SaaS companies so dense that the logos were illegible. “I could probably end the presentation right there; you just can’t compete with so many companies and limited budgets.”
CONNECTED: Lab4 and Xena Intelligence won top prizes in the SAAS NORTH competition
His keynote was titled “The Death of SaaS and the Rise of RaaS.” The succinct title became the cornerstone of the event and was frequently referenced in talks and other on-stage programming throughout the conference.
RaaS, according to Litt, stands for “results as a service,” a new era defined by software that can do work on its own, powered by autonomous, full-featured artificial intelligence, and measured by its results. Litt explained that with so many SaaS licenses available, future customers do not need seats (paying per user of the software). Instead, founders should create products that directly generate profits.
“Extension now requires proof [return on invested capital]; I won’t just buy software from you anymore, I’ll buy results,” Litt said. “It is no longer about administering tools, but about organizing results; Fewer dashboards, more solutions; key indicators, guaranteed results.”
OpenText is one of those companies looking for RaaS. The cloud-based information management platform was a classic example of a SaaS company but made AI its “number one priority.” earlier this year as 1,600 employees were laid off.
In a morning fireside chat with BetaKit editor-in-chief Douglas Soltis, Shannon Bell, OpenText's chief digital officer and chief information officer, reiterated the new focus on results. Bell said that when the initial requests for AI started coming in, they were “mostly requests for technology for technology's sake.”
“Technology is out there and everyone loves cool technology, but it doesn’t have to be a partisan gimmick,” Bell said. “It has to be something that will lead to meaningful business results, so choose your hard problems.”
She explained that OpenText has created a system to measure the expectations and results of using artificial intelligence tools, such as improving conversion rates within the sales team. According to Bell, OpenText has now deployed so many artificial intelligence agents into its company that one of the company's HR managers manages a mix of human and digital agents.
Litt noted the transformative effect of his presentation. “We don't create software, we replace jobs [and] replacing industries,” he said.
“The only reason people look at these [AI] platforms and saying ‘this is the future’ is because people haven’t used their imagination yet.”
Daniel Vigdor, AXL
The market for creative SaaS solutions still exists.
Perhaps replacing SaaS is the wrong approach. Perhaps the founders have another place to play instead. In fact, the head of the venture studio Axl Daniel Vigdor SAAS NORTH says replacement is a dead approach.
“If someone says, 'We'll make it so you can fire a bunch of your people, we'll make your company more efficient,' I think that's a fundamental misunderstanding of the opportunity we have with AI,” Vigdor said.
Wigdor, an entrepreneur and computer science professor at the University of Toronto who has worked for global tech giants Microsoft and Meta, told the breakout room that Canada and its entrepreneurs should look at the application layer rather than try to replace the world as it was with AI.
In a spirit that would later be reflected in Solomon's reference to the printing press, Vigdor argued that platforms do not historically “win.” The opportunity, he says, comes from creating new solutions to problems based on emerging platforms.
“The only reason people look at these [AI] Platforms and saying ‘this is the future’ is because people haven’t used their imagination yet,” Vigdor said. “Use the same techniques that SaaS companies have been using for a long time to build applications for the industries that actually use this technology.”
This way, today's founders can generate immediate profitable results or envision the next big use for the modern printing press. What about continuing the course?
In a Hot Tub Time Machine conversation with The Globe and Mail's Sean Silcoff and eSentire's Eldon Sprickerhoff, founder of Bridgit. Mallory Brody said she would still start a regular SaaS business today.
Brody, whose company provides business intelligence software for the construction industry, explained that while it is “a little more saturated” in other areas, there is still a place for SaaS in “old school” industries such as construction, mining and agriculture.
“I think there are still so many opportunities in these areas for core workflow software that don't exist… The data set doesn't exist and so AI applications can't be leveraged at the moment,” Brody said. “So again, if you're willing to go into these older industries, then I think there are still opportunities.”
With the advent of artificial intelligence, the ground has been pulled from under the feet of the SaaS industry. This year, SAAS NORTH recognized the possibilities and value of the new world. Pechersky said StackAdapt will continue to look for new opportunities wherever they arise.
“You just have to keep experimenting, re-finding product-market fit, finding opportunities, because the market competition is moving very quickly, customer demands are changing,” Pechersky said. “Just because something works, it's not enough to just say, 'Oh, this will work forever.'
All images courtesy of SAAS NORTH.
