Micro SaaS is disrupting Big SaaS, and it's fun to watch
If done right, even SaaS giants like Atlassian, Salesforce, and ServiceNow can be displaced
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As LLM-powered tools and agents spread through society, building software products over a weekend is ever faster, easier, and incredibly satisfying. We're not just saying this as investors riding the AI hype wave—we actively build and experiment with our own micro-apps in-house to supercharge our operations. Just a couple of weekends ago, we created our own 'demo day crawler' to keep us up-to-date on startup demo days worldwide. We also built an X bot trained on venture wisdom, dishing out punchy fundraising strategies for founders. What truly amazes us is how quickly we could build these micro-products, achieving 70% of our intended functionality in just two days. And the best part? We’re not even sophisticated full-stack engineers.
This very workflow we’ve experienced is driving a powerful trend—called micro SaaS—with the potential to disrupt major SaaS companies. It’s a bottom-up shift led by indie hackers or semi-technical individuals who, with easy access to AI tools, can build, iterate, and deploy at an unprecedented speed.
The playbook is simple, and execution is everything. Here it is: identify a high-performing SaaS platform with a large market and pinpoint the core features that customers find indispensable. Then, shift your focus to the bottom- or mid-market segments—essentially SMBs who are budget-conscious and tired of hefty enterprise licenses eating into their bottom line. Choose one must-have feature, iterate with early users, and build an end-to-end workflow around it (AI or agentic workflows are a bonus). Next, undercut the top competition by offering more value for less. Finally, growth-hack your way through X, Reddit, YouTube, Product Hunt, and Google Ads. Boom! You’re on your way to $10K MRR.
There are a myriad of micro SaaS tools out there that are killing it. Here are some examples that you can test out yourself:
Keep in mind, these alternatives aren’t intended to fully replace the platforms they target. Instead, they offer a streamlined subset of the features that big platforms provide—and that’s usually more than enough for the types of customers they’re aiming for, typically smaller businesses with budget constraints. If you’re a large enterprise, you’re probably not going to opt for these lower-priced, more focused solutions anyways, especially if you have teams of heavy users across thousands of employees. At least not yet.
Disrupting Big SaaS
You might be wondering: if these products are cheaper and more limited versions of the dominant SaaS offerings, how are they making an impact on the big SaaS landscape? This is precisely where Clayton Christensen’s 30-year-old framework of disruptive innovation comes into play. Incumbents in any market are often shaken by new players who create more focused, niche products aimed at the market's lower end—segments that incumbents have long overlooked. Given enough time, some founder(s) will inevitably follow this path.
Why Now?
Micro SaaS has been around for a decade, driven by the spread of low-code and no-code tools. However, today’s timing is unique for two key reasons: (1) AI is now widely accessible to developers, allowing commercial products to be launched rapidly, and (2) founders have the chance to build AI-native SaaS products from the ground up.
This second point is especially critical as we consider various ways this could unfold. Andreessen Horowitz envisions three distinct paths for companies building with AI:
AI as an Add-On — think someone building a prompting tool that allows you to generate wireframes on Figma
Add-Ons as a Disruptor — think someone building a cheaper version of Figma after building a prompting tool within the Figma ecosystem and directly competing with the incumbent
Disruptor Creating a New Category — think someone turning Figma from software into autonomous labor, running design projects, managing teams, and outputting content by itself
We firmly believe that achieving #3 is inherently unlikely for incumbents like Figma, Zoom, or Salesforce, as it's difficult for them to successfully reinvent themselves from the ground up. By ‘successfully,’ we mean building with an AI-native philosophy from day one, applying first principles rather than retrofitting an established organization to AI frameworks. This is what Elon did, effectively acting as a wartime CEO—or change consultant, if you will—at Twitter. Therefore, we see a tremendous opportunity for today’s micro SaaS founders to become tomorrow’s big SaaS leaders.
The Macro Picture
Let’s zoom out to a 30,000-foot view, beyond our focus on micro SaaS, and consider how AI might reshape the broader SaaS landscape.
First, we believe that in SaaS, product alone becomes less of a competitive moat in an era when MVPs can be built over a weekend and clones within a month. This shift has three implications: (1) product-led growth will become fiercely competitive, but it also accelerates land grabs for those able to deploy quickly; (2) vertical SaaS platforms that manage the entire workflow for specific industries will outperform horizontal platforms; and (3) while SMBs may opt for more affordable, product-focused solutions, large enterprise clients will continue to prioritize relationships and trust, underscoring the enduring importance of human connection.
Second, we foresee the rise of the 'Fortune 1 Million'—a potential Cambrian explosion of SaaS companies generating $10M ARR or less. With product development becoming increasingly accessible, many companies will experience rapid growth, only to be recycled or acquired within a couple of years. M&A activity at this stage is likely to surge. However, breaking past the $10M ARR threshold will remain a formidable challenge, as large enterprises are likely to continue favoring the established SaaS giants.
Third, SaaS pricing models will undergo a transformation. As software-as-a-service transmutes into service as software, seat-based pricing will likely disappear. Instead, outcome-based pricing will take center stage, whether measured by successful task completion or broader company performance. The specifics are still unfolding, but fundamentally, pricing will be anchored to the cost of running GPUs, and GPUs becoming the laborers.
Considering all of this, we see incredible opportunities for SaaS founders to seize today. Imagine a platform that empowers enterprises to build, customize, and maintain their own internal micro-apps. Or consider what creators—such as influencers with loyal fan bases—could develop and easily distribute to niche segments. And think about legacy industries worldwide, where human labor still dominates and pre-AI software has yet to make inroads.
If you’re building solutions around these trends, we want to talk to you.
Get in touch here: hello@blackbird.associates
Just like Nas would say, SaaS is dead.