Why I prefer small Saas vendors

14 Sep 2023 - Frans Vanhaelewijck

Small versus large saas vendors

There’s often a belief that bigger companies offer better and more reliable products. But is that really true? In this blog post, we will explore why small companies and even solo entrepreneurs often deliver more and better value than the big established vendors.

Contact a company not only to get support

One obvious advantage is that you can expect more personalized support, quick feature updates, and often, a product that is more in sync with your needs. Smaller companies typically welcome feature requests, especially if you take the time to justify why a particular feature might benefit the product. Of course, it remains at the discretion of the product owner to include this feature or not, but I have seen my suggestions end up in a product more than once.

Talk to the Decision Maker

The great thing is that you can get into contact with (one of) the owner(s), and it’s great to know that you are communicating with one of the decision makers.

I remember one particular request where I hadn’t really thought through how a particular request I had could work. At first sight, it seemed like a valuable idea, but the product owner got back to me. He agreed that it would be a great addition to the product, but he challenged me to draw up the GUI on how to set that in the app. In the end, I had to agree that it would make the product hopelessly complex.

Is it really more risky?

Some may argue that opting for smaller providers is risky. But think of all the products Google once had and now abandoned:

  1. Google Reader: Launched in 2005, this RSS reader was popular but was shut down in 2013 due to declining usage.

  2. Google Plus: Aimed to be a competitor to Facebook, Google Plus was launched in 2011 but failed to gain traction. It was shut down for consumers in 2019.

  3. Google Wave: Launched in 2009 as a collaborative real-time editor, it was discontinued in 2012.

  4. Google Glass: Initially launched with much fanfare in 2013, the consumer version failed to take off and was discontinued, although an enterprise version still exists.

  5. Picasa: Acquired by Google in 2004, this photo-sharing service was discontinued in 2016 in favor of Google Photos.

  6. Orkut: One of Google’s early social media efforts, launched in 2004 and discontinued in 2014.

The wikipedia page on abandoned Google products lists 61! products.

The reasons for these discontinuations vary but generally include lack of user adoption, shifting company focus, or the features being integrated into other existing Google products.

The Venture Capital poison

I’ve written before about the effect of taking VC money on companies. I argue strongly against going down that road as an entrepreneur. But what is the effect on you as the customer when your beloved SaaS vendor sends an email with the good news that they now have millions in the bank?

I’ve started to consider those emails as ‘bad news’.

Initially, all goes well. Product releases accelerate. Documentation improves. Support reacts faster. It’s clear that more people are being hired, and more work is getting done. This work was already overdue because, when cash was in short supply, difficult choices had to be made.

Now, remember that a VC is investing money in a company with the sole objective of getting a 10x or 20x return on their investment a few years later. Because no one, and certainly not VCs, can predict the future, they need to repeat this game with dozens of startups. One or two of those will become the hit they were hoping for and will make up for the losses in the other 90% of cases.

Then, all sorts of things start to go wrong: bad product choices, a focus on customer acquisition instead of investing in current customers, rising prices, and excessive hiring.

Here are some notable examples:

  1. Jumio: An identity verification SaaS that raised $35.4 million, declared bankruptcy in 2016 due to financial irregularities. However, it did manage to restructure and is operational today.

  2. Zirtual: A virtual assistant service that raised around $5.5 million and abruptly shut down in 2015.

  3. LivingSocial: While not a traditional SaaS company, this online marketplace raised about $928 million in funding and was considered a significant player in the “daily deals” space. It had to undergo massive layoffs and eventually sold to Groupon for a small fraction of its valuation.

My personal list of smaller software companies

Here are some products that I use regularly and find extremely useful:

  1. Workflowy: An organizational tool that allows you to create nested lists, making it easier to manage tasks, notes, and more.

  2. ButtonDown.mail: A simple and robust newsletter platform aimed at making it easy to send out emails without the bloat of larger platforms.

  3. MailPace: An email client designed to streamline your email management process, focused on speed and ease of use.

  4. Kagi: A high-quality, 100% privacy-respecting search engine with results augmented by non-commercial indexes and personalized searches.

  5. Plausible.io: A privacy-focused web analytics tool that doesn’t use cookies, providing essential metrics without compromising user data.

  6. Rsync.net: Offsite backup based on the ZFS file system.

Let me know in case you have examples of your own that fit (or don’t fit) in this list.

Conclusion:

Going for a smaller provider doesn’t necessarily mean taking on more risk. Even giants like Google have discontinued many beloved products, leaving users in the dark. Smaller companies are more likely to value each customer, offering a level of dedication that can be reassuring. If you’re looking for software solutions that offer quality and reliability, don’t hesitate to check out smaller companies. I’ve shared a few of my favorites above. They may not have the big-name recognition, but what they lack in size, they more than make up for in value and customer focus.

Certainly here, big isn’t always better,



frans@vanhaelewijck.com