Enshittification and the SaaS Decay Cycle

Jun 22, 2026 | Enshittification

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Enshittification, as Cory Doctorow named it, is the predictable decay sequence that turns every good platform bad. The SaaS tools that agencies and small businesses depend on are running the same sequence, and the people paying monthly fees are absorbing the cost.

What Is Enshittification and Where Did the Term Come From

Doctorow's framework is precise: platforms first serve users to build a base, then abuse users to serve business customers, then abuse business customers to claw back value for shareholders. The sequence is not accidental. It is the rational behavior of a platform that has achieved lock-in.

The SaaS category is not an exception. It is a factory for case studies. Reddit built one of the most valuable communities on the internet on the labor of its moderators and users, then in 2023 restructured its API pricing in ways that made third-party clients economically nonviable, triggering a moderator revolt that it waited out. Mailchimp built the small business email marketing category from scratch, was acquired by Intuit in 2021 for twelve billion dollars, and systematically repriced its tiers in ways that pushed the freelancers and small shops that built its reputation toward competitors. Shopify built a merchant-friendly alternative to the big-box retail model, then evolved its payment processing fees, app ecosystem fees, and plan restructures in ways that made its per-transaction extraction increasingly difficult to avoid.

Different industries. Different feature sets. The same sequence.

What Are the Three Phases Every SaaS Platform Goes Through

  1. Phase one: genuine value. The platform launches with generous pricing, responsive support, and features that genuinely help users. Adoption grows because the product is good and the price is proportional to the value delivered.
  2. Phase two: lock-in accumulation. The platform achieves enough market penetration that switching costs accumulate. Workflows, data, integrations, and customer relationships exist inside the platform's infrastructure. The cost of leaving is no longer just the monthly fee. It is the loss of everything built on their land.
  3. Phase three: extraction. With lock-in established, pricing increases. Features that were included get moved to higher tiers. API access narrows or gets repriced. The product does not improve at the rate prices increase. The gap between cost and value widens each year.

Why Does the Enshittification Sequence Repeat Across Every Platform

The digital agency tools space follows the same arc. The platforms that serve this industry, built on genuine problem-solving and adopted because they work, are not immune to the sequence. The quality of the features is real. The workflow value is genuine. The structural pressure toward extraction exists independently of whether any particular team deserves credit for what they built or blame for what follows.

That separation matters. The enshittification argument is not a product review. It is a structural observation: the ownership and incentive model that produces good products in phase one is the same model that produces extraction in phase three. The product and the extraction are the same story running on different timelines.

Why Does Enshittification Never Self-Correct From Inside

Enshittification does not reverse inside the same ownership and incentive structure. A venture-backed platform optimizing for growth and exit has no mechanism for prioritizing user value once lock-in is achieved. The competitive pressure that might force correction is neutralized by the switching costs the platform built during phase one. The correction does not come from inside the platform. It comes from outside it.

Frequently Asked Questions

What is enshittification in SaaS?

Enshittification is the decay sequence Cory Doctorow identified in which platforms first serve users well enough to build lock-in, then degrade the product to extract maximum value from those locked-in users. In SaaS, the subscription fee stays while the product quality declines.

Why do SaaS platforms keep getting worse over time?

The incentive structure of venture-backed SaaS requires exit through acquisition or IPO, neither of which rewards long-term product quality. Once lock-in is established, degrading the product to extract more revenue is more profitable than maintaining it. the structural argument for why enshittification is the model not a bug.

Are there any SaaS platforms that have avoided enshittification?

Platforms governed by cooperatives or nonprofits, where shareholders cannot demand extraction, have demonstrably longer phase-one periods. Open source tools with no exit incentive do not enshittify because the mechanism that produces enshittification, the need to return investor capital, is absent from their governance structure.

References

Doctorow, Cory. Pluralistic: Tiktok's enshittification. January 2023.

Doctorow, Cory. Pluralistic. pluralistic.net.

404 Media. 404media.co.

Enshittification in Practice: The Reddit API Crisis

Jun 17, 2026 | Enshittification

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Enshittification in the abstract is easy to dismiss. Enshittification with a documented timeline, a named platform, and a named community that organized against it is harder to argue with. Reddit's 2023 API crisis is the clearest single case study available, documented in real time by Cory Doctorow and covered exhaustively by independent technology journalism.

Who Actually Built Reddit's Value Before the API Crisis

Reddit's value was not produced by Reddit's engineering team. It was produced by the moderators who built and maintained hundreds of thousands of communities, the users who generated the content those communities organized, and the third-party developers who built accessible clients that made Reddit usable on mobile before Reddit's own app was viable. The platform provided the infrastructure. The community created the asset. The value was co-created, with Reddit capturing the monetizable portion and the contributors receiving access to the community they built.

That arrangement is phase one of the enshittification sequence. The platform serves users and contributors genuinely enough to generate the scale that makes phase two profitable. Reddit's community was the product. The users were both producers and consumers of that product. Reddit was the landlord collecting rent on the land they farmed.

What Happened During the Reddit API Repricing in 2023

In April 2023, Reddit announced API pricing changes that would make the data access third-party clients depended on prohibitively expensive. Apollo, one of the most widely used iOS Reddit clients, calculated its costs under the new pricing at approximately twenty million dollars annually, making continued operation economically impossible. The developer documented the calculation publicly. The math was not disputed.

The repricing was framed as a necessary step toward Reddit's planned IPO. The company needed to demonstrate that it controlled its own data and could monetize API access rather than subsidizing third-party clients that competed with its own app. The framing was accurate. This was phase three of the enshittification sequence: claw back value from the business customers, in this case developers, that the platform had cultivated in phase two, in order to improve the financials that would determine the IPO valuation.

The moderators who had maintained Reddit's communities for years organized a blackout. Thousands of subreddits went private or restricted. Reddit waited it out. The communities that did not comply had their moderators replaced by Reddit-appointed ones. The platform had accumulated enough lock-in, in the form of communities that existed nowhere else, content that was not portable, and user habits built around specific subreddits, that it could absorb the moderator revolt without meaningful concession.

Why Could Reddit Absorb the Moderator Revolt Without Conceding

The moderators and users who organized against the API changes faced a switching cost that the platform had deliberately engineered. A Reddit community that had operated for a decade had a decade of posts, comment threads, wiki pages, and community culture that existed only on Reddit's infrastructure. Moving to a decentralized alternative meant starting over: no archive, no established membership, no discovery mechanism, no history.

This is the switching cost architecture Doctorow's enshittification framework describes. The platform did not make the exit cost prohibitive through malice. It made it prohibitive through a decade of absorbing community value into infrastructure it controlled. The community improved the land. The platform owned the land. When the platform decided to raise the rent, the community had no viable alternative to paying it.

What Does the Reddit Timeline Confirm About Enshittification

Mapped against the enshittification framework, Reddit's trajectory follows the sequence exactly: genuine value creation through community building, lock-in accumulation through the irreplaceability of specific communities, pricing extraction through API restructuring, and suppression of resistance through moderator replacement. The sequence is not unique to Reddit. It is the sequence. Reddit is the case where it was documented most clearly and resisted most visibly, which is why it functions as the textbook example.

Every platform that has built a community asset on the labor of its users is running the same sequence on its own timeline. The details differ. The structure is the same.

Frequently Asked Questions

What was the Reddit API crisis of 2023?

Reddit announced API pricing changes in April 2023 that made third-party clients economically unviable. The Apollo app calculated costs of approximately twenty million dollars annually under the new pricing. Moderators organized a blackout across thousands of subreddits. Reddit waited it out and replaced non-compliant moderators.

Why did the Reddit moderator protest fail?

The protest failed because Reddit had accumulated a decade of community lock-in. The communities that organized the blackout existed nowhere else. Their history, culture, and membership were trapped on Reddit's infrastructure. The switching cost was not the inconvenience of a new interface but the loss of irreplaceable community assets. how digital enclosure is designed to make exit exactly this expensive.

How does the Reddit API crisis illustrate platform enshittification?

The crisis maps precisely onto Doctorow's enshittification sequence: Reddit served users and developers in phase one to build community value, converted that community value into lock-in during phase two, then repriced API access in phase three to extract value from the developers it had previously cultivated. The sequence is textbook.

References

Doctorow, Cory. Pluralistic: The Rot Economy. July 2023.

Doctorow, Cory. Pluralistic. pluralistic.net.

Apollo for Reddit. "Apollo is Closing Down on June 30th." June 2023. apolloapp.io.

404 Media. 404media.co.

Enshittification Is Not a Bug in SaaS. It Is the Model.

Jun 13, 2026 | Enshittification

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Enshittification gets framed as a failure of execution. The wrong leadership made the wrong calls. Investors pushed too hard. A good product got ruined by people who did not understand what made it good. This framing is comfortable because it implies the problem is fixable: install better leaders, find patient capital, hire product managers who actually use the tools they build. None of that is the problem. Enshittification is not a deviation from the SaaS model. It is the SaaS model running correctly.

Cory Doctorow named the pattern in 2023 and described its sequence with enough precision that it should have settled the debate about whether platform decay is structural or incidental. It has not settled the debate, because the people most invested in the model have the most to lose from the structural explanation. But the sequence is not ambiguous: platforms first serve users to build scale, then abuse users to serve business customers, then abuse business customers to claw back value for shareholders and creditors. Each stage follows from the economic logic of the one before it. The decay is the business model reaching maturity.

What Incentive Structure Makes SaaS Decay Inevitable

Venture-backed SaaS has one viable exit: growth to acquisition or IPO at a multiple that returns the fund. Neither of those exits rewards long-term user value. Both reward growth metrics, net revenue retention, and market share. The product decisions that maximize those metrics are not the same decisions that maximize user value. When the two align, the platform appears to be good. When they diverge, the incentive structure wins and the platform decays. The alignment is temporary. The divergence is permanent.

Lock-in is not a side effect of building a useful product. It is an explicit design objective. Every platform decision that makes data harder to export, every proprietary format that replaces an open standard, every workflow that only functions inside the platform's ecosystem is a lock-in investment. The engineering team may not frame it this way. The incentive structure does not require them to. It simply underfunds the features that reduce switching costs and overfunds the features that increase retention metrics and justify the next pricing tier.

Data portability is not a feature the engineering team forgot. It is a switching cost the strategy team intentionally maintains. This distinction matters because it means the solution is not a better engineering team. It means the solution requires a different ownership structure with different incentives, or it requires the user to stop depending on the platform's goodwill to access their own data.

How Predictable Is the Enshittification Timeline for Any Platform

The question for any SaaS platform is not whether enshittification will happen. It is where the platform currently sits in the sequence. A new platform with genuine momentum and a growing user base is in phase one: serving users well enough to generate the lock-in that makes phase two profitable. The product is good because goodness in phase one produces the scale that enables extraction in phase three. The goodness is instrumental. It is not the goal.

A platform with established market share, rising prices, and a product roadmap that consistently prioritizes revenue-generating features over user-requested improvements is in phase two or three. The enshittification is not imminent. It is already running. The businesses still paying monthly fees and building workflows inside that platform are in the extraction phase whether or not they have named it.

The sequence does not reverse without a structural change in ownership or incentives. A new CEO does not reverse it. A public apology about pricing does not reverse it. A product team reshuffle does not reverse it. The incentive structure that produced the decay remains in place. The decay continues at whatever rate the market will absorb.

What Questions Should You Ask Before Adopting Any SaaS Tool

If enshittification is structural rather than incidental, then evaluating tools on current product quality misses the point. The product that is good today is good because it is in phase one of its enshittification arc. The lock-in it is building while it is good is the mechanism that will extract value from you in phase three. Evaluating a tool without accounting for its ownership structure, its funding model, and the switching costs it is accumulating while you use it is evaluating a landlord based on the first month's rent.

The relevant questions are not: does this tool solve my problem well? They are:

  • What does this tool know about my workflows and clients that I cannot export if I cancel?
  • How much of my operation will exist exclusively inside this system in twelve months?
  • What happens to years of accumulated data if the platform raises prices beyond what I will pay?
  • Who currently owns this platform and what exit do they need?

Adobe's forced migration from perpetual licenses to Creative Cloud subscriptions in 2013 is instructive. The features were the same features designers had used for years. The ownership relationship changed: from a one-time license that ran on your machine indefinitely to a subscription that ceased to function if you stopped paying. Adobe built enough lock-in through file format dependency and workflow integration that the migration, despite significant user resistance, succeeded. The product did not improve at the rate of the price increase. The switching cost was high enough that most users paid anyway.

What Ownership Models Produce Software That Does Not Enshittify

The SaaS model cannot produce platforms that do not enshittify because the model's exit requirements are incompatible with sustained user value. This is not a criticism of individual founders or product teams. It is a description of what venture capital requires and what the public markets reward. A founder who wants to build a tool that stays good for a decade and charges a fair price for what it delivers is not building a venture-backed SaaS company. They are building something else: a lifestyle business, a cooperative, a nonprofit, a self-funded product, none of which fit the model and all of which have different incentive structures.

Yanis Varoufakis frames this as the replacement of market capitalism with cloud feudalism: a system where the returns flow not from producing things that compete in markets but from controlling the infrastructure through which all production flows and collecting rent from everyone who depends on it. The enshittification sequence is the mechanism by which a competitive product becomes a feudal infrastructure. Phase one produces the product. Phase two builds the dependency. Phase three extracts the rent. The model is complete.

Platform cooperatives offer one structural alternative: governance structures that distribute ownership among users rather than concentrating it in investors, removing the exit pressure that drives enshittification. Self-hosted software offers another: infrastructure you own cannot extract rent from you regardless of who owns the codebase. Neither alternative is as convenient as a well-funded SaaS product in phase one. That inconvenience is precisely what the SaaS model is selling you in exchange for the lock-in it is building while you enjoy it.

Why Is Enshittification the Correct Frame Not Product Criticism

The correct frame for evaluating any platform is not: how good is this product today? The correct frame is: what is the ownership structure, what does the exit model require, and what will this platform look like when the interests of its investors and the interests of its users fully diverge? That divergence is not a risk. It is a scheduled event. The only variable is timing.

Recognizing enshittification as structural rather than incidental changes what you build, what you adopt, and what you are willing to become dependent on. It does not mean refusing all software. It means being precise about which infrastructure relationships you are willing to let accumulate switching costs and which ones you insist on keeping portable. The distinction between those two categories is the difference between owning your operational stack and farming someone else's platform while it is still in phase one.

The platforms that are good right now will not stay good. The sequence is documented, the incentives are in place, and the timeline is the only unknown. The businesses building irreplaceable workflows inside those platforms today are the extraction targets of phase three. That is not a prediction. It is a description of how the model works.

Frequently Asked Questions

Is enshittification avoidable in venture-backed SaaS?

No. Venture-backed SaaS requires an exit that returns investor capital, either through acquisition or IPO. Neither exit rewards long-term user value. The incentive structure guarantees that product quality will be sacrificed for extraction metrics once lock-in is achieved. The timeline varies. The outcome does not.

How do you evaluate a SaaS tool before it enshittifies?

Evaluate the ownership structure, not the current product quality. Ask: who owns this platform, what exit do they need, and what will they do when user value and investor return diverge? Also ask what data this tool accumulates that you cannot export. what interoperability standards tell you about a tool before you adopt it.

What is the difference between enshittification and bad product management?

Bad product management produces a declining product by accident. Enshittification produces a declining product by structural necessity. The distinction matters because bad product management can be fixed with better leaders. Enshittification cannot be fixed without changing the ownership model and incentive structure that make extraction more profitable than quality.

References

Doctorow, Cory. Pluralistic: Tiktok's enshittification. January 2023.

Doctorow, Cory. Pluralistic. pluralistic.net.

Varoufakis, Yanis. Technofeudalism: What Killed Capitalism. Bodley Head, 2023.

Varoufakis, Yanis. yanisvaroufakis.eu.

Hern, Alex. "Adobe's switch to subscription model for Creative Suite sparks protest." The Guardian. May 2013.