SaaS (Software as a Service)

What is SaaS?

Software as a Service (SaaS) is a model where software is delivered over the internet on a subscription basis. Instead of buying and installing software, users pay monthly or annually for access. For the creator, this means predictable recurring revenue.

How Does a SaaS Business Work?

1. Build the Product: Create software that solves a specific problem
2. Host It: Deploy on cloud infrastructure (Vercel, AWS, etc.)
3. Acquire Users: Drive traffic through content, SEO, and marketing
4. Convert to Paid: Offer free trials or freemium tiers
5. Retain and Expand: Keep users happy and upsell premium features

SaaS Metrics That Matter

Metric	What It Measures	Healthy Range
MRR	Monthly Recurring Revenue	Growing month-over-month
Churn	Users who cancel	Below 5%/month
LTV	Lifetime Value of a customer	3x+ acquisition cost
CAC	Cost to Acquire a Customer	Lower than LTV/3

Building SaaS with Claude Code

Claude Code has made solo SaaS development viable. A single founder can build, launch, and scale a SaaS product that would have required a team of 5-10 developers. The combination of AI-generated code, automated testing, and one-click deployment makes it possible to go from idea to revenue in weeks.

Key Takeaway: SaaS is the most powerful passive income model because of recurring revenue — and Claude Code makes it accessible to solo founders.