3 Reasons 2024 Has To Be Better Than 2023

So a question I get a lot from folks is “How Will 2024 Be?” — mostly from folks who had a tougher 2023.

Now let’s be clear. 2023 wasn’t hard for everyone:

• First, it was mainly hard for folks that sold into “tech”, broadly speaking:  Monday sells mainly outside of tech — it crushed 2023.  Asana and Atlassian, competitors who sell more to tech?  A much tougher year.  ZoomInfo saw it’s non-tech customers grow 20%, but overall growth slowed to 9%.  That means tech customers shrunk their spend.
• Second, the top public SaaS companies had a great year in their stock prices, even in growth slowed.  Shopify was up 128%!  HubSpot was up 104%!  The average public SaaS company saw it’s stock price up 40%.
• Third, AI exploded.  OpenAI apparently got to $1.4 Billion in ARR — most of that in just 1 year (!)

Is it the end of an era for customer success in SaaS? 

We just wrote up how some of the biggest changes of SaaS are now coming, specifically in Customer Success and Sales. Back in 2015, when didn’t have the data or NRR or GRR of 115 public SaaS companies. The number one insight back then was to put a person on it.

Now, in 2024, we’re in the age of efficiencies, and we’re rethinking whether we should put more people on it or tolerate more churn and issues because we want to be cash flow positive. SaaStr CEO Jason Lemkin also wrote how Customer Success has now morphed into part of the sales team and that the 2024 trends in CS include everyone wanting to eliminate humans from support to replace that headcount with AI and bots.

The world has changed. We still want to drive retention and growth and make money. Yet, we don’t know what the new world is, but it won’t be the same. 

So to go a bit further in on this topic, we thought we’d also bring in SaaStr Fan Fave and expert on Customer Success, Gainsight CEO Nick Mehta, together with Jason to share their predictions for the future of customer success in 2024. Let’s dive in. 

So somehow, “Product Led Growth” became a seemingly magic savior for many struggling SaaS companies. Or at least, they hoped so.  A magic cure for sales costs that are just too high.  What if we just add a Free edition?

Sometimes it does work. I mean, Canva’s metrics for example are just awesome. $500k in revenue per employee at $2 Billion in ARR, and profitable.  Now that’s a solid PLG motion.

But just as often, if you were any good at “PLG” — you’d already be doing PLG. Still, if you go all-in, truly 100%, add a free edition and a true hands-off free trial if you can. It will make your product better and easier to use, if nothing else. If it doesn’t magically change the trajectory of your startup.

But with everyone discussing PLG, there just isn’t enough discussion in B2B of Product-Led Retention. In fact, I can’t think of a single board meeting where I’ve even seen a slide on it.

So what were the best attended and most upvoted SaaStr Workshop Wednesdays?  The ones you actually just have to catch up?

The 2023 list below!  And sign up for FREE Workshop Wednesdays here.

SaaStr is the largest community of SaaS executives, founders, and entrepreneurs in the world and we bring them together each year at our flagship event—SaaStr Annual.

If you want leads, you want brand exposure, and/or you want to connect with your customers -- the SaaStr Annual is the #1 non-vendor event in the world.  Period. 

And importantly, we understand how much work "doing a show" is. We have designed the event so you will not just be exhibiting at the #1 event in the industry, but just as importantly, will have constant traffic. 

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Yes. It’s much more common today than in the past, if not quite as common as 2021 

Right now in fact, I have two portfolio companies doing Series B and C rounds where there is “secondary” for the earliest investors.  Where the pre-seed investors can sell into the higher priced, later stage round.

Today, most Series A-B-C-D firms want to buy every share they can in any round they lead — and not split the round. Funds are larger, and they are also often investing a tiny bit later than they used to, and with commensurately larger checks.

In most of the investments I’ve done, if the round is oversubscribed, the new later stage investors try to buy out any earlier investors that are non-institutional and willing to sell.

In fact, if the round is hot enough, it can be hard to get enough of them to sell.  By contrast, if the round isn’t super hot, there just won’t be enough demand.

The bottom line is any round these days that is bigger than say $20m or so, someone is probably going to want to buy out the earlier pre-seed investors if they can and the price and terms work out. Because whomever that investor is, most likely they want to deploy 20% or more capital than they can otherwise deploy into the round.  And most likely someone else will want to get into the round that can’t.

Now this math really only works at later stage rounds.  Few investors that invested at say a $6m seed round want to sell in a $20m Series A.  But a $200m valuation Series B?  Then it starts to get more attractive.

“Doubling Down” is a new series where we hear from top B2B SaaS investors on their most recent activities and takes on the current market. We had a great one last week with Erica Brescia, Managing Director at Redpoint Ventures. Check that out here.

This week we’re focusing on Mark Roberge, Co-Founder and Managing Director at Stage 2 Capital!

It’s pretty common that a co-founder doesn’t work out, unfortunately.  I’ve been a part of all versions of this. I’ve had a great co-founder that went the distance with me.  I’ve had one that quit less than a year into the journey.  And I’ve been part of a senior team (not a co-founder, but part of a team) where I was the top performer by far, but wasn’t a fit for them in the end.  I’ve also observed this as an investor many times.

We agonize over this, and debate it, but in the end, the answer is simple:

Treat them the way you’d like to be treated.

It’s over. If you truly have to fire (vs. demote in some fashion) your co-founder, the relationship is broken. If not forever, at least probably for quite some time.

So first, my advice is first, slow it down. Are you sure there isn’t a role she can succeed in? If so, try one last time. And get some outside help to work you through this discussion.  The majority of co-founder departures … IMHO at least … are a bummer.  It would be better if someone super talented, that truly knows how everyone works, stayed in some role.  Even if it has to be a different role.  At least try.

But if there’s no chance it can work, be nice about it. Be direct. Be grateful. Just imagine if the shoe was on the other foot.

A bitter, angry ex-founder can drag at least a small cloud over the company for months and even years. Lawsuits, drama, whispers, bad Glassdoors, and more. A co-founder exit done wrong is often just the start of a dragged-out process.

Try to make it as quick but also gentle and appreciative as possible. Probably, they helped you get where you are today. Even if the help tapered off, and wasn’t as much as you’d hoped, or needed.

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