What’s Happening
A brutally honest sentiment has been ricocheting around founder communities for weeks now: “No one here, including myself, will probably make a living from a SaaS.” The line, posted in an indie hacker forum thread that’s since been reshared thousands of times, crystallized something a lot of bootstrapped builders have been feeling but not saying out loud. The golden era of launching a simple SaaS tool and riding it to $10K MRR may be over — at least for the vast majority of solo founders trying it.
The numbers back this up. According to the MicroConf State of Independent SaaS Report, median monthly revenue for bootstrapped SaaS products has been flat or declining since late 2024, even as the total number of new SaaS launches has surged. AI-generated competitors can now clone your feature set in weeks. App stores and directories are saturated. And customer acquisition costs for small, self-funded products have quietly doubled over the past two years as Google’s search landscape has shifted and paid channels have gotten more expensive.
This isn’t just community venting — it’s a structural shift. TechCrunch reported in September 2025 that SaaS startup failure rates had climbed to their highest level in a decade, with particularly brutal numbers for companies with fewer than three team members and less than $500K in funding. The SaaS playbook that powered the indie hacker boom of 2019–2023 is showing serious cracks.
Why Founders Should Care
Let’s be clear about what’s happening: the problem isn’t that software is a bad business. Software is still the highest-margin business model on the planet. The problem is that the specific formula — solo founder builds a niche SaaS, charges $29/month, grows through SEO and Product Hunt launches — has been competed into the ground. The barriers to building software have dropped to near zero thanks to AI coding tools, but the barriers to selling software have gone up dramatically.
This matters because a huge portion of the startup founder ecosystem — especially the bootstrapped and indie cohort — has been organized around this playbook. Communities like Indie Hackers, MicroConf, and various X/Twitter builder circles have essentially been SaaS incubators. When the dominant model stops working for most participants, it forces a rethink that creates both pain and opportunity.
OpenView Partners’ 2025 SaaS Benchmarks showed that even well-funded SaaS companies are seeing net revenue retention rates decline, with the median dropping from 110% in 2022 to just 102% in 2025. For bootstrapped products without dedicated customer success teams, the churn problem is even worse. When your customers can switch to an AI-native alternative in an afternoon, $29/month subscriptions become very fragile revenue.
The timing signal here is unmistakable: founders who recognize this shift early and adapt their business model — or choose a different one entirely — will have a significant advantage over those who keep grinding on the old playbook.
Who’s Already Moving
Some of the most visible indie founders have already pivoted away from pure SaaS models, and their moves are instructive.
Pieter Levels (@levelsio), perhaps the most famous solo founder on the internet, has been vocal about shifting toward AI-powered products with usage-based and transactional pricing rather than flat monthly subscriptions. His projects like PhotoAI and InteriorAI charge per generation or use credit-based models, sidestepping the churn problem entirely. He reportedly crossed $500K/month in revenue in 2025 — not from traditional SaaS, but from products that look more like AI utilities.
Typefully, the Twitter/X writing tool, has increasingly bundled one-time lifetime deals and agency-style packages alongside its subscription tier. Co-founder Fabrizio Rinaldi has talked openly about how pure MRR growth became harder as the competitive landscape intensified, and how diversifying revenue models helped stabilize the business.
Danny Postma, another well-known indie maker, has largely abandoned the subscription model for his AI products in favor of credit-based and pay-per-use pricing. His Headshot Pro product reportedly generates significant revenue through one-time purchases — customers pay for a batch of AI headshots and leave. No churn. No support tickets about cancellation. Just a clean transaction.
Cal.com, the open-source scheduling tool, has taken a hybrid approach — offering a free self-hosted product while monetizing through enterprise features and a managed cloud product. This infrastructure-layer approach has allowed them to build a large user base without competing purely on SaaS subscription pricing against Calendly and dozens of smaller clones.
“The best indie businesses I see in 2025 and 2026 don’t look like traditional SaaS at all. They look like productized services, marketplaces, or transactional tools. The subscription model only works if you have deep retention — and most solo founders simply can’t build that.” — Rob Walling, MicroConf founder
The Startup Opportunity
If the traditional SaaS playbook is weakening, what should founders build instead? The answer isn’t to abandon software — it’s to rethink the business model layer on top of it. Here are the most promising directions:
- Transactional and usage-based products: Instead of charging $29/month for access to a tool, charge $5 per output. AI image generators, document processors, data enrichment tools — anything where the value is tied to a discrete unit of work. This model eliminates churn, aligns price with value, and can actually scale better because customers don’t feel locked into a subscription they might cancel.
- Productized services: Take a service that currently requires a human (bookkeeping, content writing, design QA) and wrap AI automation around it with a human quality layer. Charge per project or per deliverable. This is harder to clone because the service wrapper — the process, the quality guarantee, the customer experience — is the moat, not the software.
- Marketplace and platform models: Instead of building a tool that competes with 47 other tools, build a platform that connects buyers and sellers in a niche. Take a transaction fee. Marketplaces are harder to start but dramatically more defensible than SaaS once they hit liquidity.
- One-time purchase software: There’s a growing backlash against subscription fatigue. Products like Raycast, Sublime Text (historically), and various Mac utilities have proven that customers will pay a premium one-time price for software that doesn’t require ongoing payment. The economics are different — you need a constant stream of new customers — but AI-driven acquisition and product-led growth can make this viable.
- Data and API businesses: If you can assemble, clean, or enrich a dataset that’s valuable to a specific industry, selling access via API or data feed is a much stickier model than a SaaS dashboard. Switching costs are high because customers build your data into their workflows.
The common thread across all these models: they either eliminate the churn problem, create genuine switching costs, or align revenue directly with value delivered. Traditional SaaS does none of these things well for solo founders competing in crowded markets.
Watch Out For
Before you burn your SaaS to the ground and pivot to credits-based AI tools, some honest caveats.
Transactional revenue is lumpy. One of the beautiful things about SaaS is predictable recurring revenue. When you move to per-use or one-time models, your revenue can swing wildly month to month. This makes financial planning harder and can be psychologically brutal. You need a much larger customer acquisition engine to sustain growth because you can’t rely on last month’s customers sticking around automatically.
The “SaaS is dead” narrative is overblown for funded startups. The sentiment driving this conversation comes primarily from solo founders and tiny bootstrapped teams. If you have a team of ten, $2M in funding, and a genuine enterprise product, SaaS is still an excellent model. The problem is specifically about the indie playbook at the low end of the market — $10–$100/month products with no real moat.
AI-native competition applies to every model, not just SaaS. If AI tools make it easy to clone a SaaS product, they also make it easy to clone a transactional AI tool or a productized service. Switching business models doesn’t magically create a moat. You still need genuine differentiation — whether that’s distribution, data, brand, or network effects.
Survivor bias is rampant. When you see Pieter Levels making $500K/month, remember that for every Levels there are thousands of builders launching AI credit-based products that go nowhere. The new models have their own failure modes. Don’t mistake a few success stories for a guaranteed playbook.
SaaS fundamentals still matter. Even if you charge per transaction instead of per month, you still need product-market fit, a clear value proposition, efficient acquisition channels, and good unit economics. Changing the pricing model doesn’t fix a product nobody wants.
The Bottom Line
The viral sentiment that “nobody will make a living from SaaS” is too bleak, but the kernel of truth in it is important: the specific low-end, bootstrapped SaaS playbook that defined indie hacking for five years is no longer a reliable path to sustainable income. The market is too crowded, AI makes cloning too easy, and customer acquisition is too expensive for solo founders to win with a generic $29/month tool.
If you’re a founder reading this over coffee, here’s what to do: audit your business model honestly. If you’re running a SaaS with weak retention, rising churn, and no clear moat, don’t just grind harder on the same strategy. Explore transactional pricing, productized services, or platform models where the value exchange is tighter and the competitive dynamics are different. The opportunity hasn’t disappeared — it’s migrated. The founders who follow it will be the ones still building a year from now. The ones who cling to the old playbook, hoping it’ll come back, probably won’t be.
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