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Big SaaS is out, niche SaaS is in. (And the numbers prove it.) In Q3 2024, SaaS deal value hit $3.8B, a 130.8% jump from last year. The big shift? Vertical SaaS now attracts 60% of new investments, while horizontal models hold only 40%. Key insights: 1. Insurtech startups in vertical SaaS see median funding rounds of $15M. 2. Traditional SaaS startups average $10M per round. 3. Customer retention in vertical SaaS is 85%, compared to 75% for horizontal models. 4. Specialized markets come with up to 35% higher customer acquisition costs. Critics are concerned about the high acquisition price and that niche markets could limit growth, raising fears of a bubble. But I think otherwise. Vertical SaaS is just the beginning. As product development gets cheaper, we’ll see even more hyper-focused and niche SaaS solutions. And I don’t think it’s a bubble — retention is spectacular, which means these products deliver real value. The real question is whether these companies should be VC-backed. Not all of them. Many niche markets won’t be big enough to generate VC-level returns, but they can still be great cashflow businesses. If retention is high, it’s not a bubble — it’s just a shift in how SaaS works. Did I miss something?

AI startups are just “wrappers” around existing SaaS functionalities. AI startups are reportedly growing at nearly 200% YoY, far outpacing traditional SaaS growth of 50–70%. They’re also attracting 30% more capital than SaaS companies. AI companies chase rapid growth, promising smarter automation, but critics say many are just existing SaaS products with an AI layer. The debate continues on whether AI is overhyped. But think on this… When the internet got good enough for cloud software, SaaS took off. Now, AI is good enough to automate tasks that couldn’t be automated before — and for less than hiring people. That’s why we’re seeing this huge boom. Why do some still miss the point?

As a development partner, we're especially proud to share this news! Congratulations to the entire SmartSuite team, and a special shoutout to Jon Darbyshire, Tara Darbyshire and Peter Novosel. We truly value our years of collaboration. 🚀

AI will disrupt SaaS businesses like the internet and smartphones disrupted media. Earlier, we had big media holdings. TV, radio, newspapers. We consumed news from those sources only. Different sources for different audiences: sports journals, political TV shows, educational channels, etc. Making good content was very expensive and reaching people cost even more. Now we have social media. Phones with 48-megapixel cameras. As a result, millions of micro-influencers. It’s not enough to have a “sports channel” now. No, you have to have a channel focused on one specific team of F1. AI makes development cheaper, lowering the barrier to entry. I predict it won’t be enough to have, for example, a “CRM for agencies.” There will be a CRM for a “10-people Instagram marketing agency from overseas who work with US customers.” A great time for product creators. Rising time for micro and even nano SaaS.

One of the biggest challenges startups face when transitioning from MVP to a market-ready product is poor planning.

Can you build the best B2B SaaS with just any stack? Here's what matters. When developers ask on forums what stack to use for their project, the common advice is, "Go with what you know best." While this is generally true, there are a few important considerations. 1. Some tools are great for the early stages but can become a burden when it’s time to scale. It’s not uncommon for teams to launch an MVP and, after securing investments, discard the first version to rebuild with a more scalable stack that can handle increased load and team growth. This isn’t a failure; it’s part of the process, and it confirms that it’s okay to start with what you know. But as the project grows, you might need to consider migrating. 2 . Not every tool fits every architecture. For example, Strapi can be slow to launch, making it a less-than-ideal choice for serverless environments. Django is better suited for monolithic applications than for microservices. This doesn’t mean Django can’t handle high-load, scalable projects, but it’s important to understand its best use cases and build accordingly. No one can predict exactly where the project will go, so don’t be afraid or embarrassed if you need to pivot along the way. I prefer working with open-source tools that provide transparency into how they work and don’t hide the architecture behind complex abstractions. Sometimes, this means doing more things manually, but the control it gives me is worth it. - Django has an open codebase that I can read and modify. When Django is running in production, I can trace exactly how a request is processed. It doesn’t hide the database or the file system from me; instead, it simplifies working with them. I’ve had numerous moments where, under heavy load, something went wrong, and being able to trace and fix the issue was a huge advantage. - Next.js works well but can be a bit intimidating. It takes my code and does some "magic" with it. While it works well when it works, understanding why something breaks is much harder when it doesn’t behave as expected. - We've done a lot of MVPs with Keystone, but it hides the work with the database from us a bit and strongly imposes its project structure. When the code base grows, it quickly starts to put pressure. - We also work extensively with Node.js. While there isn’t yet a full-stack framework like Django or Rails, it offers many separate tools that allow for the creation of scalable systems. In the end, the right stack is about understanding your project’s long-term needs and selecting tools that can evolve with it. It’s important to stay flexible and ready to adapt as the project progresses.

I have a special pleasure to share this podcast episode and proudly mention it’s powered by Gearheart.io. Thank you, Omer Khan, for another great episode!

Here’s to a merry, bright, and prosperous holiday season for all. Cheers! 🎄

At Gearheart.io, our primary role is to act as a technical co-founder for our clients. But there's more to it. Each engagement is led by a dedicated Project Manager/Business Analyst - this isn't just about task management. It's about understanding our client’s business, providing invaluable insights and owning the client's product roadmap. What i think is the most important? The speed and depth of the team onboarding process when we start the engagement. Across 70+ projects, no two have been the same. Yet, our PM/BA team dedicates dozens of hours to market research for each. They dive into competitor analysis. They review customer interviews. They identify pain points. This preparation allows them to offer strategic business guidance. They shine at answering critical questions like: "We need to launch an MVP in 4 weeks — what can we realistically deliver, and what can wait?" "This feature is important, but how can we simplify it?" "Which part of this scope should we prioritize to start generating revenue quickly?" Here's a latest example: We usually recommend starting with an extensive discovery and project planning phase. But sometimes, we need to dive in immediately. In one recent case, we went from the initial discussion to project kick-off in just two weeks. How? By reallocating part of our team from another project. By conducting discovery and preparing a three-month roadmap during the first two weeks. We worked in a truly agile mode, adjusting the sprints as we progressed. Being a great technical partner isn’t just about coding. It’s about understanding the client’s business, knowing their customers, identifying their real needs. I'm proud of our 13+ years of experience and 70+ successfully delivered projects. These have equipped us with refined frameworks and cross-domain expertise. This enables us to quickly immerse ourselves in our clients’ businesses. This allows us to deliver actionable advice that drives value as fast as possible. Have questions? Shoot!

“You’re the first company trying to save my budget.” I’ve heard this phrase three times in the past month from potential customers — and it got me thinking. Why would someone be surprised that we prioritize their budget? Isn’t that what every software development company should do? Well, not exactly. On the surface, it may seem like every software development company offers the same thing: the ability to build whatever you need at varying price points. But after hearing the same feedback three times in a row, I realized that we are different. One of our key differentiators is our entrepreneurial experience. As serial entrepreneurs ourselves, we understand one crucial fact: development is expensive. And not just expensive — it can burn through your budget faster than you expect. That’s why we don’t just push development. Instead, we focus on giving you every opportunity to avoid it, or at least minimize it: • Use no-code platforms. • Sell your idea first, validate your customer base. • Prioritize customer development before diving into software development. We’re not just selling you a service; we’re invested in your success. Whether that means encouraging no-code solutions for your MVP, or finding cost-effective ways to validate your idea, our goal is simple: help you bring your product to market in the fastest, most efficient way possible. I believe the real win is seeing your startup succeed. Whether it’s through tech we’ve built or the support we’ve provided to get you there — that’s what truly matters. Gearheart.io is not just another development company. We care about your success and understand that spending less can sometimes mean achieving more. If you’re looking for a team that will treat your startup like their own, reach out! We’re always here to chat and help you grow smart, not fast.