Hey SaaStr Community,

Is the employer-employee social contract in tech...

now broken?

The social contract between employer and employee in startups and scaleups seems to be in an evolving and weird state.

For most of my early career, folks rarely left if they were well paid, got promoted, had a good boss, and had a good job. Actually, only 2 folks ever left the Adobe Sign / EchoSign team we wanted to keep … in the first 5.5 years!

But tech was tiny back then, options were fewer, and IPOs even acquisitions were rare.

Things got bigger, and tech drew in a more mainstream crowd, and it needed to in order to scale.

Not just the romantics and the pirates.

Now 2023 has changed everything again.

When a new head of marketing joins a start-up and the first thing they want to do is “refresh the marketing site”, I always quietly groan a bit. 

Look, a marketing site is important.  But don’t leads matter more? 

Shouldn’t improving the funnel be job #1 first?  Shouldn’t updating lead scoring, and lead routing, and so many other things come before a big “refresh the marketing site” project?  How about jumping in and helping the sales team as Job #1?

Well.  Yes, of course leads come first.  But these marketers aren’t wrong.

Because the good VPs of Marketing know something:  Your marketing site should be even better than your product. 

And when it is — you’ll move more leads down the funnel. 

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So one of my favorite categories to track and analyze in SaaS is project management.  Why?  Diversity of vendors and customers.

There are so many leaders that have IPO’d (Asana, Monday, Atlassian, Smartsheet, etc) and so many that will (Notion, Clickup, Airtable, etc.).

And so many different strategies, from more enterprise to more SMB, from more tech focused (Asana) to less tech focused (Monday). 

You can just learn so much.

Asana is one of the leaders now, and they’ve cruised past $600m in ARR, growing a very healthy 34% — which will push them to one billion+ in ARR soon enough! 

Impressive, although as an overall barometer for tech and tech spending, it’s important to note that while growth is still very strong, it’s down substantially from a stunning 70% at $400m in ARR. 

Things are great at Asana, but still harder than it was at the peak of 2021 craziness as for most of us.  In 2021, everyone was just buying everything.

So this survey and data won’t surprise very many, but I wanted to do it anyway to get the latest data back from the SaaStr community.

The learning: your SDRs average tenure is about 14 months, and perhaps most importantly, 52% of you don’t see your SDRs last even 12 months.

This shouldn’t be much of a surprise.

SDR is an entry level role in most sales orgs, and many SDRs want to be promoted within 12-16 months, often even faster, or look to move on to where they can get an AE role.

Perhaps the biggest reminder is to make sure you have a clear progression path and rules for your SDRs, and make sure by month 6 they have a good sense of how they are tracking to an AE promotion, if that’s what they want. 

Or they’ll … move on.

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So the funding platforms, law firms and data sources that track venture all use slightly different data sets, and come to slightly different conclusions.  But they all align on one thing: venture investments post-seed stage are way down.

How down?

The latest CB Insights data I thought summarized it the most elegantly:

Deals were down to a 5+ year low, not just lower than the go-go days of late 2020 to late 2021, but down from every single quarter in 2019 and 2018, too.  Deal making is even further down that I thought.

Dollars invested were also down to a 5+ year low.  This is a bit less surprising, with public markets down 50%+, dollars almost have to be down at least that much or more. Still, it’s a big, big drop.

So Amazon came out with its latest annual shareholder letter and it was even more cautious on AWS growth than I was expected.

AWS said they weren’t going to push folks to sign punitive contracts, or block downgrades, etc.  That if customers want to manage their spend more careful, they they should.

Net net?

AWS projected for now only $85 Billion in sales in 2023 … which sounds like a lot, but it’s only 6% over 2022’s $80 Billion in AWS sales. 

Lower than I predicted.

Wall Street is still projecting more, and saying Amazon is being too conservative, and predicting 16% growth.

But it’s still way way down. 

Growing, yes. 

But a lot of macro headwinds here.

Not all startups follow the same trajectory for getting off the ground. Some stumble into the world of entrepreneurship like DoNotPay founder Joshua Browder did.

As a self-proclaimed accidental entrepreneur, Browder shares a few unconventional ways to scale your company.

The DoNotPay journey started six years ago and has led to many unconventional lessons that go against the popular wisdom of starting, scaling, and distributing a product. 

Captive Talent is looking for a VP of Sales for their enterprise team as they continue to scale their US Enterprise segment. In this position you’ll play a critical role driving the GTM strategy to scale revenue and team.

Subskribe is seeking a Senior Account Executive who will drive revenue growth for the company, as well as work closely with company leaders to refine every aspect of bookings growth and account development.

• SaaStr 651: Top Mistakes Founders Make with Series A with Black Mangroves, Square Peg, Vertex, and GGV
• SaaStr 650: The Impact of Generative AI on Software With Theory Ventures Founder & General Partner Tomasz Tunguz

• SaaStr 649: Being a Rebel and Building a Movement: Non-Traditional Approaches to Scale with DoNotPay CEO Joshua Browder

Listen on Apple Podcast, Google Podcasts or Spotify

I see a lot of founders fundraising in 2023 getting advice from founders that mainly raised in 2021:

- Be brash, even arrogant

- Run “a quick process”, with firm deadlines

- Be aggressive on valuation

- Tell everyone round is “moving quickly”

Just tone it down a bit for ‘23

When your CTO wants it as badly as you do

That's when true magic happens

We’re getting to the point in the cycle where almost every

2023 renewal from an existing vendor is a threat

Got another today

Told us we needed to renew for 2 years, upgrade to an enterprise edition, and use a second product we’ve never used and can’t even use

It’s gotta stop

In 2023, you can be a pretty darn good SaaS company ...

And still be 100% unfundable by VCs

In fact, maybe assume that's the case until you learn otherwise

© SaaStr 2023

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