The Looming Issue with SMB SaaS; Plus Weekly SaaS News and Updates

Hey SaaStr Community,

So in theory, SMB SaaS is better than enterprise, at least 9 times out of 10.

And importantly, there are just so, so many SMBs. 30,000,000+ of them.  Or maybe it’s 15,000,000.  Different counts are out there, but however many it is — it’s a lot.

But beyond all the other Pros and Cons of SMB vs enterprise, there’s one looming issue with SMB SaaS:

Churn.

Endemic churn. The type of churn you almost can’t do anything about.

So when we started SaaStr waaay back in 2012, I never would have thought of profiling Microsoft and its old-fashioned desktop software.  But fast forward to today, and Microsoft truly is a Cloud and SaaS company, with Azure and LinkedIn its fastest growing business units!

Perhaps most importantly. Azure and other cloud services grew a record 40% and the total Microsoft Cloud grew to a $90 Billion run-rate.  This is a great sign for the coming quarters, the rest of the year, and more.  No matter what other signs of stress there are out there.

So we’re in a bit of a weird world and time in venture capital.  The public markets are down 50%+.  The best of the best in SaaS and Cloud, truly the fastest growing and most iconic SaaS companies, from Snowflake to Datadog and more are way, way down.  Even though their growth is way, way up.

This edition of the SaaStr weekly is sponsored in part by Laika

It's almost here.

We're less than 50 days away from Annual 22!

SaaStr Annual 2022 will be a huge celebration that brings together 10,000+ of the best in SaaS, the best speakers, the best mentors, the best CEOs, CROs, CMOs, and more.

Don't miss the #1 place to be this year in SaaS.

Ticket prices go up at midnight tonight. 

First, let’s note that most successful SaaS startups do not have equal founder splits. Less than 15% do.

If a SaaS business hopes to win over the SMB market successfully, it will need a precise GTM approach. At the SaaStr Europa 2022 event, Accel Partner Philippe Botteri interviewed PayFit CEO & Co-Founder Firmin Zocchetto to ask about his GTM strategy. 

As of 2022, Payfit has reached unicorn status –– after raising $289 million in Series E, the company is now valued at $2.1 billion. Currently, PayFit serves over 7,000 customers and shows no signs of slowing down.

So how did PayFit achieve such explosive growth? The answer lies in the GTM strategy and Zocchetto shares seven secrets that helped fuel PayFit’s success. 

This edition of the SaaStr weekly is sponsored in part by WorkOS

• GuideCX is looking for an Enterprise Account Executive to qualify, demo, and close new sales opportunities. Each AE is responsible to manage and build a pipeline with the help of the Lead Engine team. GUIDEcx sells into many industries, with our primary efforts focused on selling to B2B software companies.

• Workato is seeking a Customer Success Manager to work with Chief Product Officers and their teams to roll out integration and automation capabilities to their end customers.

• SaaStr 575: The State of SaaS Marketing in 2022: Mutiny & SaaStr CMO Panel (with Salesforce President & CMO Sarah Franklin, Box CMO Chris Koehler, and Attentive CMO Sara Varni)
• SaaStr 576: 7 Secrets to a Successful SMB Go-To-Market Strategy with PayFit Co-Founder and CEO Firmin Zocchetto and Accel Partner Philippe Botteri
• SaaStr 577: Scaling Faster, An AMA with SaaStr Founder & CEO Jason Lemkin

Listen on Apple Podcast, Google Podcasts or Spotify

The biggest problem with Boom of 2H’20-1Q’22 is it lasted just long enough that folks decided it was the New Normal

That those valuations, round sizes, that hiring pace, that way of scaling was Normal

So going back to Old Normal is proving much harder than it could have been

Yes, you want the team happy

But if the CEO doesn't have a strong sense of urgency,

The team like never does

In a BigCo, a promotion often means less work

In a Startup, usually quite the opposite

If most founders knew that eventually, they’d have to get to $1B in ARR for the math to pencil out

Would they ever raise more than a few million in venture capital at all?

© SaaStr 2022

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