So not everyone is seeing tougher times these days.  SaaS outside of classic “B2B’ is often holding up well.  Klaviyo, Toast, etc. just had very strong quarters.  More B2B2C there.  And AI is obviously on fire, pulling up AWS, Google Cloud, Azure, etc.  Security remains on fire overall as well.

But classic B2B SaaS is definitely in many cases seeing tougher times. Not just for now, but going into a third year of tougher times.  Is 2024 any easier?

The other day HubSpot, despite growing 23% at a $2.5 Billion in ARR, said No. Things aren’t getting any easier.  Things in “classic B2B” haven’t bounced back to easier yet.  ZoomInfo, another pure play in B2B on the data side, isn’t seeing any bounce back yet, either.

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We look back on the go-go days of the second half of 2020 and 2021 like it was a time of fools and silliness. Of 1,000 unicorns we didn’t need, of products that in end no one quite really had to have.

Fair enough.

But if you’re trying to figure out what’s really going on in 2024, let’s take a calm look back at how the top leaders were growing even just in 2022, when the markets were crashing but growth was still epic.

So with public SaaS companies continuing to grow, but revenue multiples often at relative lows, it can make sense in some cases to “go private”, invest in more growth for a few years, and try to IPO again down the road.  Qualtrics did it, nCino just did it, and the latest is Squarespace. They are going private at an almost $7 Billion valuation.

Now that may sound like a lot, and it is a lot, but less so a multiple of revenue and ARR. Squarespace is at ~$1.1B in ARR, growing almost 20% with strong margins — and even with a 30% premium to take it public, it’s still been acquired for about 6x ARR.

Squarespace hasn’t done everything right, but it’s a pretty darn good one. One I’d hoped would be worth more than 6x ARR.

The simplest forcing function to help your first VP of Sales and Marketing work well together is for you all to agree on what the #1 core metric in the funnel is.

And then what the core goals are there for each month and quarter of the year.

Is it X leads per month?

Is it a certain number of MQLs? Or is it SQLs? Or is it SQOs by number?

Or is it Y $$ of opportunities?

Or is it simply Z $$$ of closed/won business?

I.e., pick >one< phase/stage of the funnel as Priority #1 for the Demand Gen+ Team Goals. (This of course is in addition to your MRR growth goal).

And have your VPS, VPM, and CEO agree on that stage as your core marketing KPI. And then your VPM will know exactly what she or he is accountable for delivering to sales. And report against each month and quarter.

I had to brute force it, at least the second time at EchoSign / Adobe Sign.

When we launched we had a small but decent number of sign-ups, and once we had a paid product in a few months, a small number of reasonably happy paying customers. Not many. But at least a few that were happy. Enough to say “push on”. But it wasn’t enough.

We only got to about $200k in ARR by the end of the first year, and were running low on cash.

We had something for sure — but not enough, and not growing fast enough, for true product-market fit.

In the end, we had to go more enterprise, and have a richer product, and develop more critical integrations (Salesforce, etc.) to find true product-market fit for real, which in the end took probably 18 months from Day 1. At that time, there wasn’t a big enough market for the simple, horizontal product we launched with.

But we didn’t know. We weren’t in agreement if going up-market was a good one. We weren’t in agreement on how aggressively to push our API, or our freemium vector, or different expressions of our product. We weren’t in agreement on our target verticals and markets.

In the end, we tried everything.

A lot of you reading SaaStr are probably more B2B SaaS oriented and may not be paying attention to the consumer market, but it’s already massive and is continuing to grow quickly.

In this week’s Workshop Wednesday, RevenueCat CEO Jacob Eiting and Growth Advocate David Barnard share their annual State of Subscription Apps report with us.

• SaaStr 739: The Three SaaS Metrics That Matter in 2024 and Will IPOs Be Back? with SaaStr Founder and CEO Jason Lemkin

• SaaStr 738: How Shopify Implements AI Across Sales and Product with Mike Tamir, Head of AI at Shopify

• SaaStr 737: How to Build Go-to-Market Efficiency in SMB Sales with Owner.com CRO Kyle Norton

Listen on Apple Podcast, Spotify or Google Podcasts

Roughly, very roughly:

95%-98% of the VCs you see on Twitter are doing worse

than it appears from a returns perspective

2%-3% or so are doing profoundly better. like nutso returns

How do founders that have never done it before scale to

$10m, $100m, $1B in ARR?

They hire people better than them

This is the mistake most Stretch VPs make.

They don’t hire folks better & later more experienced than

them as their managers

And they hit a wall at the next stage

Yes, you want the team happy

But if the CEO doesn't have a strong sense of urgency,

The team like never does

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