Hey SaaStr Community,

Don't have Annual #FOMO. We'll be back and even bigger than ever before when we take over 40+ acres of the San Mateo County Events Center on Sept 10-12 2024.

We'll be celebrating 10 years of annual!

Now's your chance to bring your team with you next year and lock-in the early bird rate as tickets are the lowest price they will ever be! 

PS — you can grab your team pack now and assign the tickets closer to the event.

So this is a very specific post, but I’m hoping it helps just a few.

We’ve all gone though so much change since March 2020. 

From lockdown, to shutdowns, to market explosions, to the Bloom of 1,000+ Unicorns, to Market Crash, to a Semi-Downtown, and back to a few IPOs now again in the back half of 2023. 

So, so much change.

As part of that, the very way we build SaaS companies has changed multiple times.  We’ve gone from somewhat efficient through 2018 or so, to less efficient into 2020, to incredibly inefficient in late 2020 and 2021, to layoffs seemingly everywhere in 2022, and now to Efficient Growth. 

It’s so much change. 

To OTEs, to job specs, to how teams are staffed, and more.

And if as part of that, your job stinks, well I get it.  Make a change.  Even now, find a way.

But what I’m also seeing is a big unforced error:  folks unhappy at home … taking it out on work.

TAM (Total Addressable Market) is a tricky concept. 

On the one hand, to build a decacorn or a unicorn, you need to tap into a large market. TAM matters, and if you aren’t playing in a $20B-$50B+ market … it’s hard to get to $1Bin ARR. 

In the end, this is why 70% of leading SaaS companies are really just new entrants in old, large markets.

For example, Okta today is a $30B+ cloud leader.  But it’s much larger in ARR than all its pre-Cloud vendors in its space combined. 

Still, many VCs just didn’t get it at first, as CEO Todd McKinnon noted. Which frustrates him almost to this day.

And VCs need to hunt unicorns and decacorns to survive. More on why that’s true here. So they are looking for large TAMs. 

Very large TAMs.   Often, $100b+ TAMs.

So what do you do to get VCs excited if you see a $100m+ ARR / $1b+ unicorn in a space, but the nominal TAM just isn’t that big today?  A few thoughts, which can be combined.

This edition of the SaaStr Daily is sponsored in part by SAP

Win customers by creating compelling offers with flexible pricing, billing, and bundling options with end-to-end automation.

Founder and CEO of SaaStr Jason Lemkin deep dives into the current state of SaaS and the Cloud. 

Lemkin and David Sacks touched on whether SaaS is making a cautious recovery, and Lemkin shares a slightly different perspective here. 

Solve my problem. Just truly solve my problem.

The beauty to sales in SaaS is as sales professionals, for the most part, you aren’t selling a commodity or a fungible product. You can’t just go down the street, or to another website, to get a better deal on the Ford F-150. Yes, there sometimes is a bit of negotiation on price, but even that is usually within a standard range of discounting.  And yes, there is competition, but even there, the competition isn’t identical.  Every vendor usually is better than another in some way at least.

Sales in SaaS, done well and done right, is about adding true value by solving a customer / prospect’s important problem. Often, a Top 3 Problem.

So how are the top SaaS and Cloud companies doing in 2023?

Bessemer’s latest Cloud 100 answers the question. 

Their top 100 SaaS and Cloud companies — the “Cloud 100” — are almost all at $100m+ ARR, and growing on average 55% year-over-year.

Now that’s still pretty darn impressive at $100m+ ARR.  But in 2022, they were growing 100% annually.

The impacts aren’t even, however.  I know a few in the Cloud 100 whose growth has plummeted to 20% or lower.  And several of the high-fliers are growing faster than ever, over 100%.

Still, averages are good to give us all a sense of overall “macro” impacts in SaaS.  Net net, the leaders’ growth has plummeted by almost half.  Still growing, but relying a lot on upsell and retention.

Here’s to an uptick in 2024!!

Any founder you talk to likely remembers every investor who said no to them.

Those founders hold a special kind of “not hatred,” says Michael Seibel, Managing Director and Group Partner at Y Combinator, but a special kind of something for those investors and a desire to prove them wrong.

If you’re a seed-stage startup, Michael shares the best ways for you to present your company to startup investors.

In this article, we’ll cover the best tactics to catch investor attention and reveal the secret to standing out.

This is the same advice they give YC companies to become much more successful at fundraising when they’re pre-product market fit.

• SaaStr 692: How To Perfectly Pitch Your Seed Stage Startup With Y Combinator's Managing Director Michael Seibel         

• SaaStr 691: The 2024 SaaS Landscape: Why 2024 Could be Pretty Darn Good for SaaS IPOs with SaaStr CEO Jason Lemkin                    

• SaaStr 690: From $5M to $100M: How to Scale a Multi-Product Startup with Lattice CEO Jack Altman           

Listen on Apple Podcast, Google Podcasts or Spotify

The reality is venture is sort of broken post seed right now

Public multiples are too low to support most investing after that.

LPs have pulled back. It won’t last. It’s the way. And AI hysteria masks it

But viewed merely in the present, it’s not quite functioning right now.

Downturns seem long when you're in one

But really, they last just a fraction of the time of upturns

You just have to power through them

Finding a truly epic cofounder

Having a truly insanely great partner

At work or at home

It's pretty rare

Never let 'em go

© SaaStr 2023

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