The Elephant in the Room: B2B SaaS
For the past couple of months, I've had the pleasure of connecting with so many people in the venture and startup space. Despite talk of the "bubble," I think this is an exciting and innovative space that revitalizes the energy in tech. Instead of the hottest thing being quirky perks, we're now paying attention to the hundreds of startups crafted every day.
For those who know me personally, I am a vocal opposer of the wave of B2B SaaS Agentic AI bullshit startups that seem to pop up in every corner. Do we need thousands of ChatGPT wrappers that fundamentally do the same thing? Absolutely not. It's a waste of capital, and honestly, many of these startups are just short-term wave-riders, whether VCs and Founders realize it or not. Overnight, my $1,000 AWS credit project is suddenly valued at millions for using an API call.
However, as much as I oppose B2B SaaS with a burning passion, I firmly believe it is a necessary evil.
Realistically, the companies that will be the next Google or Meta are likely to be deep-tech startups. Deep tech "moonshots" are what can forever change our course in science and human advancement—something a ChatGPT wrapper will probably not be able to do. But as much as I support deep tech, it's incredibly hard to succeed in. A significant amount of capital is required for R&D, and the risk is exponentially higher. A wrong experiment can set back years of work; a bug in B2B SaaS might take the business offline for 5 hours.
Because the stakes are so high, investors are wary. A common sentiment is that veteran founders have a much higher chance of launching a successful startup than first-time founders. That makes complete sense. Your first startup blowing up is painful, but it's an important learning experience. You take away so much—how to split equity, what makes a "great" co-founder—and these experiences set you up for your next venture.
What better way to test the waters and prove yourself than with a low-stakes B2B SaaS?
I'm not saying B2B SaaS is trivial, but in the grand scheme of things, it is low-stakes compared to deep tech. It doesn't need that much capital to succeed. A hefty check is nice, but a small one is still enough to fund months of GPT credits, which certainly isn't the same for deep tech. This makes B2B SaaS an enticing way to branch into startups and build the foundations for a deep tech company.
As a founder, you work out management kinks in a relatively controlled environment. It's also a quick way to forge bonds with investors. VCs thrive on FOMO. A B2B SaaS from a new founder is enticing—what if they invested early in the next Mark Zuckerberg? But if it fails, it was just a few mistakes. Surely the next venture will be better.
And that is your perfect opportunity to start the deep tech startup of your dreams.
Now, am I, Tim, saying that startups are easy to create? Absolutely not. I have immense respect for founders and hope to join them on this hellish journey of sharing my ideas with the world. I have a couple of ideas for deep tech startups, and ultimately, I want to start them once I feel grounded.
However, before I do that, it might be wise for me to read up on RAG and use Cursor to draft a ChatGPT wrapper in a day.
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real.