Just hours before he was due to participate in the first confidence vote of the 2025 budget, Canada’s artificial intelligence (AI) minister was a few blocks away from the House of Commons rattling off one of his favourite lines: “We are in the age of the entrepreneur.”
Evan Solomon, on stage in the closing hours of the tenth-annual SAAS NORTH conference, elaborated that the advent of AI has made way for a “Gutenberg moment.”
Michael Litt,
“SaaS has become increasingly competitive as the barrier to building software has dropped.”
Vidyard
“It wasn’t the printing press that people talk about, it’s what happened after: the industries that started, the technology that started,” he said. “It has never been easier to have an idea and to execute that idea.”
While “the age of the entrepreneur” might sound like a prosperous proposition, SAAS NORTH attendees grappled with the implied abundance of the statement on stage and in showroom conversations. If anybody with a brain can make a business, how can yours be special?
Throughout the two days in Canada’s capital, founders, investors, and tech 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 the first on-stage conversations of the conference, StackAdapt co-founder and CEO Vitaly Pecherskiy reflected on the perceived importance of raising funding when his company was up-and-coming in the 2010s. Pecherskiy’s adtech platform has achieved $500 million in annual revenue and a $2.5 billion valuation on less than $5 million raised. But, without the benefit of foresight in its early days, his team was trying—and failing—to raise seed funding after securing its first customer. Pecherskiy noted that, now, “the playbooks are changing.”
“I mean, we were trying to raise money because I think we thought that that’s the playbook,” Pecherskiy said. “A lot of people [now] say we can get to reasonable traction, organically—truly bootstrap from zero to one—but at that time, a lot of these distribution systems didn’t exist.”
RaaS over SaaS
SaaS is defined by a subscription pricing model that provides predictable annual income, known as annual recurring revenue (ARR). However, the advent of generative AI has changed startup math. Now, the default SaaS calculation has shifted to tallying monthly revenue and multiplying by 12, or annualized revenue. It’s what has allowed some companies, like AI-powered app builder Lovable, to seemingly come out of nowhere and boast eye-popping revenue figures within less than a year.
In short, the conventional approach to SaaS is dead. Vidyard and Garage Capital co-founder Michael Litt made the pronouncement at SAAS NORTH, taking to the BetaKit Keynote Stage to deliver its cause of death: customers’ budgets can’t grow at the same rate that new SaaS businesses are created.
“SaaS has become increasingly competitive as the barrier to building software has dropped,” Litt said, backlit by a list of SaaS companies so dense the logos were illegible. “I could probably end the presentation right here; you just cannot compete with that many companies and a finite budget.”
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His keynote presentation was titled “The Death of SaaS and the Rise of RaaS.” The pithy title became a touchstone of the event, often referenced in conversations and other stage programming throughout the conference.
RaaS, according to Litt, stands for “results as a service,” a new era defined by software that can do the work itself through autonomized, full-stack AI, and is measured against its outcomes. With so many SaaS licenses floating around, Litt explained, future customers don’t want seats (paying per software user). Instead, founders should create products that directly benefit the bottom line.
“Renewals now demand proof of [return on invested capital]; I’m not just going to buy software from you anymore, I’m going to buy results,” Litt said. “It’s no longer about administering tools, it’s about orchestrating outcomes; less dashboards, more decisions; key metrics, guaranteed outcomes.”
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 it laid off 1,600 employees.
In an early morning fireside chat with BetaKit editor-in-chief Douglas Soltys, Shannon Bell, OpenText’s chief digital officer and chief information officer, confirmed the new focus on outcomes. Bell said that when the initial requests for AI started coming in, it was “very much requests for technology for technology sake.”
“The technology is there, and everyone loves cool technology, but it doesn’t need to be a party trick,” Bell said. “It needs to be something that’s driving a meaningful business outcome, so pick your challenging problems.”
She explained that OpenText created a framework to measure the expectations and outcomes of applying AI tools, such as improved conversion rates in a sales team. OpenText has now adopted so many AI agents into its company that one of the company’s HR operations managers is managing a combination of human and digital agents, Bell said.
Litt noted the transformative effect in his presentation. “We’re not building software, we’re replacing jobs [and] replacing industries,” he said.
“The only reason people are looking at these [AI] platforms and saying ‘that’s the future’ is because people have not yet applied their imagination.”
Daniel Wigdor, AXL
Market still exists for imaginative SaaS solutions
Maybe replacing SaaS isn’t the right approach. Maybe, instead, there’s another place for founders to play. In fact, Axl venture studio head Daniel Wigdor argued at SAAS NORTH that replacing is the “brain dead” approach.
“If someone is saying ‘we’re gonna make it so you can fire a bunch of your people, we’re gonna make it so that we can make your company more efficient,’ I think that is a fundamental misunderstanding of the opportunity that we have with AI,” Wigdor said.
Wigdor, an entrepreneur and computer science professor at the University of Toronto who has worked at global tech giants like Microsoft and Meta, told attendees in a breakout room session that Canada and its entrepreneurs should be looking at the application layer instead of trying to replace the world as it was with AI.
In a sentiment that would later be echoed by Solomon’s allusion to the printing press, Wigdor contended that platforms don’t historically “win.” To him, the opportunity comes from building new solutions to problems on top of nascent platforms.
“The only reason people are looking at these [AI] platforms and saying ‘that’s the future’ is because people have not yet applied their imagination,” Wigdor said. “Use the same techniques SaaS companies have used for a long time of creating applications for industries that actually leverage the technology.”
So contemporary founders can create instant, bottom-line results, or search their imaginations for the next big application of today’s printing press. What about staying the course?
In a “Hot Tub Time Machine” conversation with The Globe and Mail’s Sean Silcoff and eSentire’s Eldon Sprickerhoff, Bridgit founder Mallorie Brodie said she would still start a conventional SaaS business today.
Brodie, whose company provides business intelligence software for the construction industry, explained that, while it’s “a little more saturated” in other spaces, there is still a place for SaaS in “older school” industries like construction, mining, and agriculture.
“I think there’s still so much opportunity in those spaces for basic workflow software that doesn’t exist…The data set doesn’t exist, and so the AI applications can’t really be put to work at this point,” Brodie said. “So again, if you’re willing to go into those older industries, then I think there is still opportunity.”
The ground gave out beneath the feet of the SaaS industry with the emergence of AI. This year’s SAAS NORTH reckoned with where the opportunities and value in the new world are. Pecherskiy said StackAdapt will continue to chase down new opportunities wherever they come.
“You should just continue experimenting, re-find product-market fit, find opportunities, because the market competition is moving so fast, demands from customers are changing,” Pecherskiy said. “Just because something is working, it’s not enough to just say, ‘Oh, it’s going to continue working forever.’”
All images courtesy SAAS NORTH.