Why software as a service (SaaS) matters to a first-time founder
Choosing a SaaS model commits you to running the product continuously: hosting, security, support and updates never stop, and customers can leave at any renewal. In return you get recurring revenue that builds as customers stay, which is why investors value it highly. Knowing that trade-off early shapes your pricing, your hiring and how much effort goes into keeping customers rather than only winning them.
Examples of software as a service (SaaS)
A freelancer logs in each month. You ship a fix when something breaks, and the fee renews until they cancel. If you switch the service off, they lose the tool. That is SaaS. A spreadsheet you sell once, which they keep forever, is not.
Common misunderstanding
People call any software business SaaS, including a paid download or a site built once for a client. SaaS means the provider hosts, operates, and updates the shared service. The defining feature is the delivery model, not one particular pricing model.
When to use it
Use the word when you are deciding how to charge, how often you have to ship, and what a cancellation does to your cash. If you still do the work by hand, you have a service. It might become SaaS later.