Why Some VC Investments Work Out, and Some Don’t; Plus Weekly SaaS News and Updates

Hey SaaStr Community,

So, as an investor, I was fortunate to have a strong start.  My first investments ended up performing quite well.

But as time goes by, you see the patterns. What works, and what doesn’t.  And why.  And as more time goes by, they haven’t all worked out.

So a few things that didn’t work out, for me, at least.

So we looked at Atlassian on the 5 Interesting Learning series pretty recently, but given all the tumult in the markets, we thought it was a great one to take a look at again as it’s now crossed $3 Billion in ARR.

Because despite the naysayers, the doom-and-gloomers, and more … many of the best in SaaS are growing as faster or faster than ever.

Atlassian is one of them.  It’s now growing 36% at $3 Billion in ARR, just about the same as the past few quarters.  And importantly — Atlassian sees and is currently forecasting no slowdown.

So in the Boom Times of later 2020 and 2021, almost every VC pushed SaaS companies to at least become a little bit of a fintech.  Why?  It seemed such an easy way to bolt on more revenue to an underlying SaaS platform.  And indeed, sometimes it can be.  Shopify now gets 2x the revenue from payments and merchant services than it does from SaaS subscriptions.

But here’s the thing:  it’s often not a free lunch.  You pay in the gross margins.

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

We're just a month away from the biggest SaaS-only event of the year:

SaaStr Annual 2022 on Sept 13-15th in the San Francisco Bay Area will be a massive, 3-day event with 10,000 Founders, CEOs, Revenue Leaders and Investors. 

Come to Annual to meet-up in-person, learn and have a good time:

• So much content. You cannot attend all the sessions - we've got 8 stages of content and 268 live(!) speakers. You're gonna need some backup to get it all. 
• Inspiration. Get yourself fired up and ready to crush Q4 and beyond
• Networking. They'll be 10,000 attendees
• Visit investors and customers.  Before or after, but honestly most of them will be at the event, no Uber required!
• Epic evening events. Just you, us, and your new SaaS BFFs. New connections every day with evening events and nightly Happy Hours, including the Big Party with DJ Duke Dumont.

And take $300 off the ticket price before prices go up on 8/17! 

If it “failed” after < 12 months or so, even 24 months, it doesn’t matter too much. No one will care either way. And there’s no need to explain yourself, apologize, or feel like a failure. No need.  Just tell folks you gave it your best and it didn’t work out.

Dust yourself off, and decide if you want to do another one.

How do you create a product that becomes essential to your customers’ lives? In this session, Brex CEO & Co-Founder Henrique Dubugras and Mutiny CEO & Co-Founder Jaleh Rezaei reveal the secrets to building a successful SaaS business based on a product that customers need and love.

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

• Storyblok is looking for a Director of Sales - Americas to oversee business development and sales activities into existing and new markets and help the team in forecasting and negotiating complex deals. 

• SecureVision is seeking a Frequence - Content Marketing Manager to be responsible for creating, editing and curating relevant and thought-provoking content that adds value to our target audiences, while further solidifying Frequence’s brand and reputation as the leader in adtech workflow software.

• SaaStr 579: Why Event Marketing Matters Even More Than Before & The Future Of Events with SaaStr CEO Jason Lemkin
• SaaStr 580: Finding Opportunities in Every Challenge: From Humble Beginnings to 30 Million Users with Miro Founder and CEO Andrey Khusid, and ICONIQ Growth General Partner Matthew Jacobson
• SaaStr 581: The Latest in VC Funding + Scaling SaaS: An AMA with SaaStr Founder & CEO Jason Lemkin

Listen on Apple Podcast, Google Podcasts or Spotify

A lot of "layoffs" in SaaS being done to clean up 2021 mishires

The businesses in many cases are fine

This is the week the "downturn" ended

Atlassian, Monday, Confluent, ZoomInfo, blow out the quarter, no slowdown

PE scooping up everything can again (Avalara, Ping Identity, etc)

Inflation, mortgages trending back down

It's not the crazy times of 2021

But "downturn" is over

After we sold EchoSign to Adobe, the next year was really tough

Yes we bought a bigger house, a new car, etc.

But I felt like I no longer had any relevance, any place in the world

An existential challenge for founders

Over-generalizing, but in a start-up:

First 10 employees looking to do it their way

First 51-100 employees looking to be part of something great

100-500 just don't want to work at a Big Company

501+ want to work at a more nimble Big Company. they just don't know it.

© SaaStr 2022

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