If you read<\/span> enough startup coverage, you\u2019ve noticed that no matter the part of the economy that an upstart tech company is attacking, there\u2019s a pretty darn good chance that it is doing so through software. Software that the startup hosts and charges a recurring fee for customers to access or lever. Software as a service, in other words, or SaaS.<\/p>\n

The reasons for this are manifold, but important to grok. First, software empowers. Workers can do more and more quickly with software than they could with pre-digital tools. Second, software is nearly impossibly flexible. It can fit everywhere all at once, solving myriad issues and improving output more generally wherever it lands. And third, software tends to have very attractive economics. This is doubly true for SaaS companies, which not only feature software-styled gross margins, but have recurring revenue to boot.<\/p>\n

That makes SaaS startups valuable in the abstract, as their core output \u2014 recurring revenue \u2014 is very valuable. Naturally, then, investors that want the most bang for their buck, and founders that want to dent the world with as much gusto as possible, tend to gravitate towards funding and building SaaS startups.<\/p>\n