Things Are Too Unpredictable to Provide a Forecast; Plus the Top News and Content of the Week

Hey SaaStr Community,

So the markets keep changing at a rapid pace. Just last week at Reinvent (Amazon’s big conference), the booths were packed, the parties were full, and times were good.  

But buyers kept coming back to one theme for 2023 planning:

• Keep
• Expand or
• Cut

This seemed to be the theme of the waning days of 2022. SaaS and IT budgets are still going up in 2023.

But inflation and cost-cutting initiatives are here in force.

So to do more with, not less, but not as much as planned … everything is under new scrutiny. Nice to haves are the first to go, if they can be cut. 

And that seems to be where the #1 largest SaaS vendor is, Salesforce.

For the first time ever, Salesforce said it would not provide financial guidance for next year.

They said … they just didn’t know. 

So Dynatrace is a SaaS security leader that isn’t exactly low profile, but if you aren’t buying security software or in the space, you likely don’t know too much about it. Leaders like Crowdstrike and adjacent players from Datadog to Okta and more are higher profile.

Dynatrace was founded way back in 2005 and has been in the “steady growth” camp, now crossing $1B in ARR and a $10.5 Billion valuation, or 10x+ ARR even in today’s depressed valuations.

Why?  Cash.  Dynatrace combines decent growth, growing a still very impressive 28% at $1B ARR (33% adjusted for current effects), with very profitable growth. 29% of that revenue falls to free-cash flow.

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

So as the years have gone by, we’ve all begun to understand SaaS a lot better.

And what we know now for sure, that we always still knew anyway, is that it both (x) takes 7-10 years to Go Big in SaaS, (y) and it probably takes 12-20 years to build something iconic.

And … asking your family to be 100% on that journey is asking too much.

It’s too much, and too hard, for non-founders to understand.

Holiday Hexie has arrived and we're delivering a few different deals from now til the New Year. 

Keep an eye out for some epic year-end savings and giveaways. 

On today, the 11th Day of December, Holiday Hexie is giving out different deals on SaaStr Annual tickets via the Spin-to-Win game. Spin now to reveal your deal and save big on tickets to SaaStr Annual 2023.

It’s definitely a challenge to keep the sales team in the game once things … slow down a lot.

Because everyone in sales knows.

They know if the competition is getting stronger. If the new VP of Sales isn’t good enough. If the outages are getting worse.

Still, a few thoughts on what to do to get the team through a rough patch.

At SaaStr Scale this week, Yamini Rangan, CEO of HubSpot joined us, and I thought it was really an A+ discussion.

We’ll share another post on the convo with a summary of all the learnings, transcript, the podcast etc. — but I thought I’d share my Top 10 Learnings ahead of that while they are top of mind.

When scaling a SaaS company, striking a balance between hypergrowth and risk is essential.

Brex’s COO, Michael Tannenbaum, and Alloy’s CRO, Laura Spiekerman, share top lessons on how to find the right balance.

As your SaaS company reaches hyper-growth, you’ll need to adapt your risk management strategies to keep up. Risk will most certainly evolve and change over time as the stakes for risk vs reward grow larger.

CommandBar is looking for an Account Executive who is high-energy, and driven to bring CommandBar to more companies and more end users. You’ll help software companies of all shapes and sizes improve their UX with CommandBar.

Tropic is seeking a Senior Account Executive who can help the Tropic team

Develop, manage, and close a consistent sales pipeline of qualified opportunities. As well as earn trust with prospects through honesty and empathy.

• SaaStr 613: How Top CMOs Drive Growth in the Age of the Self-Serve Buyer with Klaviyo SVP of Marketing Kady Srinivasan, Talkdesk CMO Kathie Johnson, SmartBear CMO Cynthia Gumbert and TrustRadius Founder and CEO Vinay Bhagat

• SaaStr 614: CRO Confidential with Gong SVP of Sales Jameson Yung on Creating a Category. Hosted by Founders Fund Partner Sam Blond and SaaStr CEO Jason Lemkin.
  
• SaaStr 615: Where Venture Capital Really is Right Now with Accel, Iconiq Growth, Salesforce Ventures and SaaStr CEO Jason Lemkin at G2 Reach

Listen on Apple Podcast, Google Podcasts or Spotify

My bet for 2023:

1/ Inflation falls fast

2/ Interest rates still going up, but then fall slowly

3/ "Downturn" is real, but normalized by June

4/ Good Times in SaaS by mid-Q3 '23

5/ Invest now

Almost everyone in sales is going to have to work harder next year

Better to embrace it now, if you haven’t already

Not as worried about a lot of SaaS companies making the plan for 2023 anymore since they're all raising prices 15%-20%

The more customers you visit in person,

The more customers you close.

The more revenue you retain.

And the more they buy from you.

As true in 2022 as it ever was.

© SaaStr 2022

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