I Killed My Own SaaS

The Failed Demo

I was demoing SimpleDirect to a potential customer last month.

Showing him the AI features. The chat. The document generation. The "smart" this, the "automated" that. Mid-demo energy, feeling pretty good about it.

Halfway through, he stops me.

"Wait - can't I just do this in ChatGPT?"

I sat there trying to come up with a reason he couldn't.

I couldn't.

Everything I was showing him - he could do for $20 a month. Or free.

I was charging $97.

My pitch died in my throat.

What I Was Actually Selling

Here's what I'd been building for years: a SaaS. SimpleDirect. Pricing tiers. $47, $97 - the whole playbook. The playbook I spent six years of my life learning.

We had AI-powered dashboards. Document generators. Financial tools. "Enterprise" features.

And then I actually looked at what we were building.

Our "AI features"? API calls. OpenAI. Anthropic. We'd take a prompt, send it to Claude, get a response back, and charge people $97 a month for the privilege.

The API call cost us about 3 cents.

We were going to charge $97.

That's a 2000% markup.

And it's not even our technology. Same Claude. Same GPT. Same models anyone can access for $20 a month.

The Cope

I had all the cope ready.

"But we have integrations."

Zapier exists. Any dev can wire that up in an afternoon.

"But we have analytics."

SQL queries on data we were storing anyway.

"But we have workflows."

LangGraph. CrewAI. All free. All open source.

Every "feature" I thought was our moat was table stakes. I wasn't building IP. I was building configuration. And charging people $97 a month because they didn't know they could configure it themselves.

My entire business model was arbitraging their ignorance.

The Conversation

I had a conversation with a friend a few weeks later. He's running a startup. Paying Intercom about $40K a year for AI support.

I asked him: "Why don't you just build your own support bot?"

He said: "We're not a tech company. We don't have engineers for that."

He's a SaaS company. He has engineers. They're just building his product instead of replacing his $40K Intercom bill.

That excuse - "we can't"—it was true in 2020.

Now it's just not looking.

A junior dev with Cursor can ship a production support bot in a weekend. I've seen it. I've done it.

The Math

Here's the math that broke my brain:

Intercom charges 99 cents per AI resolution. Plus seat fees. $29 to $139 per month. Mid-size company? $50K a year. Easy.

The actual API cost for that AI? About 2 cents per conversation.

99 cents vs 2 cents.

Same models. Same Claude. Same GPT.

You're paying them to make an API call you could make yourself. The markup is 4,900%

The Graveyard

Grammarly was worth $13 billion. The AI grammar checker. 40 million users. $700 million in revenue.

This year, they acquired Coda. Then Superhuman.

Then they changed their name.

The company is now called Superhuman.

A $13 billion company looked at their core product—grammar checking, AI writing assistance - and decided they needed to run away from their own name.

Jasper raised $1.5 billion. Revenue collapsed when people realized ChatGPT does the same thing for $20.

Builder.ai raised $445 million. Bankrupt. Turns out their "AI" was humans in offshore call centers.

Humane raised $241 million. Fire-sold.

Tome had 20 million users. Dead.

All in the last 12 months.

What Survives

Not all SaaS dies.

The ones that survive? They're not selling software. They're selling liability.

Payroll - Rippling, Gusto. One mistake means lawsuits. Regulatory hell. Angry employees not getting paid.

Compliance - Vanta, Drata. Same thing. Nobody trusts a weekend project with their SOC 2.

Banking - Stripe, Plaid. Legal nightmare if you get it wrong.

The moat isn't code. The moat is blame. You're paying for someone else to be responsible when it goes wrong.

But support software? CRM? Sales automation? Marketing tools? Project management?

If failure just means bad text output, it's dead.

The only question is how long the customers take to notice.

The Kill

So I killed it.

SimpleDirect as SaaS. The pricing tiers. The subscriber goals. The whole thing.

I took the tools we built - Changelog, the AI chat, the stuff that was actually useful - and I made them free.

Not freemium. Free.

Not because I'm generous. Because I saw where this is going.

Charging people for an API wrapper in 2025 isn't a business. It's a toll booth on a road that's about to get demolished.

Still Processing

I still think about that demo.

The guy asking "can't I just do this in ChatGPT?"

The silence while I tried to find an answer.

That's the whole industry in one moment.

The vendor's moat is you not knowing what you could do yourself. That's the entire business model.

I was the vendor.

Still processing that.

If you want to see what I'm building instead—the guidance model, why I'm taking equity in operators instead of charging SaaS fees—that's what this whole Founder Reality thing is about. But that's a different post.