6 ms·

I don't remember where I read this, but it stuck with me: A bag of coffee beans from the grocery might cost you 10c a cup. That's a Product. A cup of coffee a

I don't remember where I read this, but it stuck with me: A bag of coffee beans from the grocery might cost you 10c a cup. That's a Product. A cup of coffee at a greasy spoon diner might cost you $1. That's a Service. A latte at a fancy cafe might cost you $4. That's because you are paying for the whole Experience of the fancy cafe. So, what comes after SAS? SAE.

civilian 9y ago
Sorry, coffee snobbery incoming: drip coffee is pretty different from espresso. You're right that there's a "luxury" aspect, but there's also a product difference. Maybe the product difference is only 20% of the cost in total, but it's still there. I don't drink drip coffee anymore, it's gross. :[ Also-- aren't video games already an example of Software as an Experience?
- kazinator 9y ago
  "Espresso" and "drip" aren't types of coffee; they are types of coffee preparation: grind and brew. Drip gets a bad reputation because it's associated with offices, waiting rooms and cheap diners. The espresso method does extract a different profile of substances from the coffee; but it's subjective whether that is better or worse. Espresso made with poor quality coffee (bad roast, crappy beans, roasted too long ago, incorrect grind, etc) is going to be just as gross as diner drip. Another thing to consider is: you can make drip manually, whereby you control the drip rate, total quantity, and water temperature. Not all drip is automatic.
  - civilian 9y ago
    It's only fair that I got nitpicked in my nitpicking. :D The quality of beans is definitely a factor, but the difference in acidity from the different preparations is a big factor for me. Especially since I've developed some gastritis, having a less-acidic caffeine delivery system is important.
    - mmorris 9y ago
      If acidity is a concern, you might want to try cold brew. It's considerably less acidic.
    - deleted 9y ago
      [deleted]
    - Mz 9y ago
      You can mitigate the acidity somewhat by having mocha or adding milk or creamer. Acidity is a big bugaboo for me and I tend to take my coffee as either mocha or with two cream, one sugar.
    - deleted 9y ago
      [deleted]
- run4yourlives2 9y ago
  I do find it hilarious how we always defend our illogical likes whenever they are pointed out directly. There is a very slight product difference in any luxury experience. It adds to the experience after all. However this is meaningless in the overall comparison. You don't drink drip coffee anymore because you love the other experience. It's obviously not "gross" because you were drinking it just fine before you were exposed to espresso. Maybe at some point you'll become disillusioned in being a coffee snob and then go back to drip. It happens. This isn't unique to you or coffee. You could say pretty much exactly the same thing about whatever brands/hobbies I'm into and I'd feel exactly like you do: that my preference was justified by more than pure emotional connection. In reality, our choices as consumers are 90% emotional, which is why advertising works so well after all.
  - icebraining 9y ago
    Nah, drip coffee is gross, and I say this as someone who comes from a country where espresso is the "default" (if you want drip, you'll have to make it yourself, every coffeshop/diner/restaurant sells espresso, and for ~60¢/cup). Sometimes one just doesn't realize how crappy the previous version was until one tries the new one.
    - jl6 9y ago
      Relevant XKCD: https://xkcd.com/915/ https://xkcd.com/915/ Beware over-training your ability to discern differences. Such subtlety might give you an advantage in some fields... or it might remove your ability to enjoy basic food and drink.
    - barrkel 9y ago
      Try a nice Ethiopian blend from a Chemex made by an experienced barista and come back to me. Espresso is as different to filter coffee as icecream is to milk. They're different products, made with different material mix and different processes, different roasts, different grind size, different bean choice. They're two different things. An espresso can't be better than filter coffee any more than an apple can be better than an orange.
- rmason 9y ago
  I watched it happen in the auto industry. You had all these small vendors selling headlights, grills and bumpers. Then someone came along who had bought out some of the little guys and offered the Big 3 a packaged front end of the car. They handled all the engineering post design and had a complete front end of the car that just clipped on. They were non-union and in a rural area where wages were lower. The price was lower than buying everything individually and the Big 3 saved lots of money on their very high labor costs. What's to stop people from doing a roll up, buying a bunch of litle SaaS companies and offering a package that is a complete solution? It would be discounted of course like MS Office back in the day which killed off the category leaders like Lotus 123, dBase and WordPerfect. That is a far more plausible scenario than what this guy proposes.
  - frandroid 9y ago
    ...and eventually Magna assembles entire cars for Mercedes, and tried to launch their own car. Also this, obviously: https://www.forbes.com/sites/stevedenning/2011/11/18/clayton-christensen-how-pursuit-of-profits-kills-innovation-and-the-us-economy/#740c582428eb https://www.forbes.com/sites/stevedenning/2011/11/18/clayton...
    - krakensden 9y ago
      That's the story of Asus too, I think- they started as a supplier to Dell.
      - frandroid 9y ago
        That's what I linked to.
  - mynegation 9y ago
    It may happen, but to to answer your question "what to stop...": probably not to "stop", but make it difficult is the fact that lights, grills, and bumpers are much easier to integrate than software products.
AndrewKemendo 9y ago
That's a service provider in that case. You're effectively arguing that outsourcing is the next big thing. Could be a compelling argument to make but I don't agree, if anything I see the opposite happening. Big companies doing everything in house.
- hkmurakami 9y ago
  Given the economics of SaaS where frequently revenues are dominated by the very big accounts, combined with large companies getting even larger, I can definitely see a world where a company with 10,000 sales people on $2k/yr Salesforce licences might roll out an in-house solution. (though even then, I wonder if $20M/yr is a big enough cost driver for such companies to take the leap) At some point it makes economic sense to roll out your own data center. At some point it makes economic sense to design and make your own server and networking equipment. The question would be where that breaking point is for SaaS.
ge96 9y ago
I'd send this to myself
sushid 9y ago
Your SaaE sounds a lot like the "services" that companies like Oracle and IBM offer to older, more established Fortunes 500 companies. If anything, with the growth of self serve products like AWS and the growing popularity of OSS, we're still in the process of moving away from your "experience-based" service to regular SaaS.
nostrademons 9y ago
That's a consumer metaphor. The original article is talking about B2B startups. Consumers and businesses are very different as customers. Every consumer product/service is fundamentally an experience; even the design of Apple's packaging is carefully engineered so that you feel a certain way as you open the box. That's because consumers are buying your product (or sitting through your advertisements, or giving you their personal data) because you gratify some emotional need they have; why else would they use it? Businesses have only two fundamental needs: save money or make money (where time=money, if you can point to a wage rate). Every B2B business model is based around those. Many failed entrepreneurs have looked at the sucky user-experience of most enterprise software, said "I can do better than that", promptly done better than that...and found out that they didn't make any money, because the person doing the purchasing didn't give a damn what the "experience" is like, the whole reason they pay their employees is so that they'll sit through tasks that they hate. If you can't frame your B2B company's value propositions as "This will save $X" or "This will make $X", you won't sell.
- deleted 9y ago
  [deleted]
- deleted 9y ago
  [deleted]
- abraae 9y ago
  That certainly used to be the way. But these days the employees who work in HR, finance, accounts receivable spend their downtime locked into very sophisticated, mobile-friendly apps with user interfaces we could only dream of in past - even while slumped in front of the TV. They know what good software looks like. Yes, sometimes the suits making the decisions will just go from form and mandate SAP. But I can assure you that much of the time, turning up to demo your product will go badly for you if it looks like a drab table-based web site from the 90s. Conversely a single magnificent d3 animation will move you straight to the short list.
- flukus 9y ago
  > If you can't frame your B2B company's value propositions as "This will save $X" or "This will make $X", you won't sell. I've seen multi-million dollar software deals where the "make or break" feature is themeing it to corporate colors. I've also seen some terrible software bought because the sales team takes the manager out to a nice lunch. I don't think I've ever seen software sold on a purely cost/savings basis.
matthjensen 9y ago
I expect many of the experiences will involve community. More and more SaaS products offer Facebook groups, Meetups, Slack channels, conferences, and more for their users. Community is a way for SaaS co's to create network effect, and it may lead to consolidation.
hosh 9y ago
Sounds like AI, and AI skills.
ionwake 9y ago
Prescient
lacampbell 9y ago
> A cup of coffee at a greasy spoon diner might cost you $1. That's a Service. You can order coffee at a cheap restaurant in the US for $1!? You guys seriously don't know how good you have it.
- tonyedgecombe 9y ago
  You can in McDonalds: http://www.fastfoodmenuprices.com/mcdonalds-prices/ http://www.fastfoodmenuprices.com/mcdonalds-prices/
  - lacampbell 9y ago
    http://www.nzherald.co.nz/lifestyle/news/article.cfm?c_id=6&objectid=11465724 http://www.nzherald.co.nz/lifestyle/news/article.cfm?c_id=6&... According to this 2015 article, the cheapest macdonalds coffee here was $2.60 USD. And no, we don't get paid more.
- malodyets 9y ago
  Yes, and it usually comes with free refills.
- deleted 9y ago
  [deleted]
metafunctor 9y ago
I would say Software as Experience is already here, and has been for a long time. SaE is when, instead of buying online with a credit card, you are courted by attractive sales people and consultants, get wined and dined, receive beautiful reports to show your boss, get a nice pen and a bottle of wine perhaps, and participate in workshops facilitated by said attractive consultants. This makes you feel like an important person in charge of an important project.
hasenj 9y ago
"Software as Experience" is a nice way to describe Apple's business model. Hardware spec wise, the price of a Macbook is probably double that of a regular laptop with equivalent specs (CPU, Memory, GPU, Disk, etc). But people buy those Macs for the experience; not just the specs.
- kesselvon 9y ago
  The experience of a MacBook is also that the reliability that it won't crap out on you with weird issues in crucial times.

civilian 9y ago

Sorry, coffee snobbery incoming: drip coffee is pretty different from espresso. You're right that there's a "luxury" aspect, but there's also a product difference. Maybe the product difference is only 20% of the cost in total, but it's still there. I don't drink drip coffee anymore, it's gross. :[ Also-- aren't video games already an example of Software as an Experience?

kazinator 9y ago
"Espresso" and "drip" aren't types of coffee; they are types of coffee preparation: grind and brew. Drip gets a bad reputation because it's associated with offices, waiting rooms and cheap diners. The espresso method does extract a different profile of substances from the coffee; but it's subjective whether that is better or worse. Espresso made with poor quality coffee (bad roast, crappy beans, roasted too long ago, incorrect grind, etc) is going to be just as gross as diner drip. Another thing to consider is: you can make drip manually, whereby you control the drip rate, total quantity, and water temperature. Not all drip is automatic.
- civilian 9y ago
  It's only fair that I got nitpicked in my nitpicking. :D The quality of beans is definitely a factor, but the difference in acidity from the different preparations is a big factor for me. Especially since I've developed some gastritis, having a less-acidic caffeine delivery system is important.
  - mmorris 9y ago
    If acidity is a concern, you might want to try cold brew. It's considerably less acidic.
  - deleted 9y ago
    [deleted]
  - Mz 9y ago
    You can mitigate the acidity somewhat by having mocha or adding milk or creamer. Acidity is a big bugaboo for me and I tend to take my coffee as either mocha or with two cream, one sugar.
  - deleted 9y ago
    [deleted]
run4yourlives2 9y ago
I do find it hilarious how we always defend our illogical likes whenever they are pointed out directly. There is a very slight product difference in any luxury experience. It adds to the experience after all. However this is meaningless in the overall comparison. You don't drink drip coffee anymore because you love the other experience. It's obviously not "gross" because you were drinking it just fine before you were exposed to espresso. Maybe at some point you'll become disillusioned in being a coffee snob and then go back to drip. It happens. This isn't unique to you or coffee. You could say pretty much exactly the same thing about whatever brands/hobbies I'm into and I'd feel exactly like you do: that my preference was justified by more than pure emotional connection. In reality, our choices as consumers are 90% emotional, which is why advertising works so well after all.
- icebraining 9y ago
  Nah, drip coffee is gross, and I say this as someone who comes from a country where espresso is the "default" (if you want drip, you'll have to make it yourself, every coffeshop/diner/restaurant sells espresso, and for ~60¢/cup). Sometimes one just doesn't realize how crappy the previous version was until one tries the new one.
  - jl6 9y ago
    Relevant XKCD: https://xkcd.com/915/ https://xkcd.com/915/ Beware over-training your ability to discern differences. Such subtlety might give you an advantage in some fields... or it might remove your ability to enjoy basic food and drink.
  - barrkel 9y ago
    Try a nice Ethiopian blend from a Chemex made by an experienced barista and come back to me. Espresso is as different to filter coffee as icecream is to milk. They're different products, made with different material mix and different processes, different roasts, different grind size, different bean choice. They're two different things. An espresso can't be better than filter coffee any more than an apple can be better than an orange.
rmason 9y ago
I watched it happen in the auto industry. You had all these small vendors selling headlights, grills and bumpers. Then someone came along who had bought out some of the little guys and offered the Big 3 a packaged front end of the car. They handled all the engineering post design and had a complete front end of the car that just clipped on. They were non-union and in a rural area where wages were lower. The price was lower than buying everything individually and the Big 3 saved lots of money on their very high labor costs. What's to stop people from doing a roll up, buying a bunch of litle SaaS companies and offering a package that is a complete solution? It would be discounted of course like MS Office back in the day which killed off the category leaders like Lotus 123, dBase and WordPerfect. That is a far more plausible scenario than what this guy proposes.
- frandroid 9y ago
  ...and eventually Magna assembles entire cars for Mercedes, and tried to launch their own car. Also this, obviously: https://www.forbes.com/sites/stevedenning/2011/11/18/clayton-christensen-how-pursuit-of-profits-kills-innovation-and-the-us-economy/#740c582428eb https://www.forbes.com/sites/stevedenning/2011/11/18/clayton...
  - krakensden 9y ago
    That's the story of Asus too, I think- they started as a supplier to Dell.
    - frandroid 9y ago
      That's what I linked to.
- mynegation 9y ago
  It may happen, but to to answer your question "what to stop...": probably not to "stop", but make it difficult is the fact that lights, grills, and bumpers are much easier to integrate than software products.

AndrewKemendo 9y ago

That's a service provider in that case. You're effectively arguing that outsourcing is the next big thing. Could be a compelling argument to make but I don't agree, if anything I see the opposite happening. Big companies doing everything in house.

hkmurakami 9y ago
Given the economics of SaaS where frequently revenues are dominated by the very big accounts, combined with large companies getting even larger, I can definitely see a world where a company with 10,000 sales people on $2k/yr Salesforce licences might roll out an in-house solution. (though even then, I wonder if $20M/yr is a big enough cost driver for such companies to take the leap) At some point it makes economic sense to roll out your own data center. At some point it makes economic sense to design and make your own server and networking equipment. The question would be where that breaking point is for SaaS.

ge96 9y ago

I'd send this to myself

sushid 9y ago

Your SaaE sounds a lot like the "services" that companies like Oracle and IBM offer to older, more established Fortunes 500 companies. If anything, with the growth of self serve products like AWS and the growing popularity of OSS, we're still in the process of moving away from your "experience-based" service to regular SaaS.

nostrademons 9y ago

That's a consumer metaphor. The original article is talking about B2B startups. Consumers and businesses are very different as customers. Every consumer product/service is fundamentally an experience; even the design of Apple's packaging is carefully engineered so that you feel a certain way as you open the box. That's because consumers are buying your product (or sitting through your advertisements, or giving you their personal data) because you gratify some emotional need they have; why else would they use it? Businesses have only two fundamental needs: save money or make money (where time=money, if you can point to a wage rate). Every B2B business model is based around those. Many failed entrepreneurs have looked at the sucky user-experience of most enterprise software, said "I can do better than that", promptly done better than that...and found out that they didn't make any money, because the person doing the purchasing didn't give a damn what the "experience" is like, the whole reason they pay their employees is so that they'll sit through tasks that they hate. If you can't frame your B2B company's value propositions as "This will save $X" or "This will make $X", you won't sell.

deleted 9y ago
[deleted]
deleted 9y ago
[deleted]
abraae 9y ago
That certainly used to be the way. But these days the employees who work in HR, finance, accounts receivable spend their downtime locked into very sophisticated, mobile-friendly apps with user interfaces we could only dream of in past - even while slumped in front of the TV. They know what good software looks like. Yes, sometimes the suits making the decisions will just go from form and mandate SAP. But I can assure you that much of the time, turning up to demo your product will go badly for you if it looks like a drab table-based web site from the 90s. Conversely a single magnificent d3 animation will move you straight to the short list.
flukus 9y ago
> If you can't frame your B2B company's value propositions as "This will save $X" or "This will make $X", you won't sell. I've seen multi-million dollar software deals where the "make or break" feature is themeing it to corporate colors. I've also seen some terrible software bought because the sales team takes the manager out to a nice lunch. I don't think I've ever seen software sold on a purely cost/savings basis.

matthjensen 9y ago

I expect many of the experiences will involve community. More and more SaaS products offer Facebook groups, Meetups, Slack channels, conferences, and more for their users. Community is a way for SaaS co's to create network effect, and it may lead to consolidation.

hosh 9y ago

Sounds like AI, and AI skills.

ionwake 9y ago

Prescient

lacampbell 9y ago

> A cup of coffee at a greasy spoon diner might cost you $1. That's a Service. You can order coffee at a cheap restaurant in the US for $1!? You guys seriously don't know how good you have it.

tonyedgecombe 9y ago
You can in McDonalds: http://www.fastfoodmenuprices.com/mcdonalds-prices/ http://www.fastfoodmenuprices.com/mcdonalds-prices/
- lacampbell 9y ago
  http://www.nzherald.co.nz/lifestyle/news/article.cfm?c_id=6&objectid=11465724 http://www.nzherald.co.nz/lifestyle/news/article.cfm?c_id=6&... According to this 2015 article, the cheapest macdonalds coffee here was $2.60 USD. And no, we don't get paid more.
malodyets 9y ago
Yes, and it usually comes with free refills.
deleted 9y ago
[deleted]

metafunctor 9y ago

I would say Software as Experience is already here, and has been for a long time. SaE is when, instead of buying online with a credit card, you are courted by attractive sales people and consultants, get wined and dined, receive beautiful reports to show your boss, get a nice pen and a bottle of wine perhaps, and participate in workshops facilitated by said attractive consultants. This makes you feel like an important person in charge of an important project.

hasenj 9y ago

"Software as Experience" is a nice way to describe Apple's business model. Hardware spec wise, the price of a Macbook is probably double that of a regular laptop with equivalent specs (CPU, Memory, GPU, Disk, etc). But people buy those Macs for the experience; not just the specs.

kesselvon 9y ago
The experience of a MacBook is also that the reliability that it won't crap out on you with weird issues in crucial times.