How is SaaS Doing Today? For 10% It’s Great

So just what the heck is going on in SaaS today? There really are 3 categories of SaaS companies:

#1 - 10% or so are growing like a weed, often fueled by AI (which also is fueling Cybersecurity).

Databricks, OpenAI, Apollo, Wiz, Clay, GitLab, ServiceNow, Crowdstrike, Drata, Vanta, etc. OneStream (SaaS for CFOs) just IPO’d growing > 30% at $500m in ARR!

#2 - 20% or so are doing well, because they sell to end consumers — outside of tech. The U.S. economy is doing fine overall.

Canva, Monday, Klaviyo, Samsara, Braze, etc.

#3 - 60% of us are selling classic B2B2B products. There, buyers are still looking to cut. Even 3 years into a “downturn”.

Iconic leaders like Salesforce, Zoominfo, RingCentral, Five9, Zoom, Twilio, Asana, etc.

So SaaStr Annual 2024 — the 10th Annual — is coming up fast. Sep 10-12 in the SF Bay Area.  And because it has the highest concentration of SaaS founders and CEO, it also attracts the highest concentration of VCs and tech finance firms of any event.

We’ll have 800+ VCs at 2024 Annual as well as great partners like Silicon Valley Bank and good friends like Lighter Capital there.  We’ll also have our formal “Meet a VC” program where founders can opt-in to meet with VCs.  If you’re a CEO attending, you’ll get an email from us and can apply.

This Week in SaaS is back! Recorded late last night with Harry Stebbings and Jason M. Lemkin.

Harry’s summary here.

Agenda:

1. Wiz: Should they have accepted the $23BN? What went down?

2. Crowdstrike: WTF happens now? Bull and bear case?

3. $1BN in legal tech in a day with Clio and Wiz. Say what?!

Two factors IMHO / experience: (1) recruiting, and (2) the ability to push on.

#1. Being great at Recruiting. Recruiting is incredibly hard.

Most of us eventually sort of give up, and settle on key hires, or just keep doing a specific role ourselves. And there is always a hotter, better funded start-up than yours.

But the best founders just find a way. They are relentless in recruiting. They find a way to attract better and better talent to their brand-less start-up, somehow. That’s the one way you get scale after $1m-$2m in ARR or so. 

The part of the startup journey everyone likes to talk about is how it’s all up and to the right, but that’s not usually the case. Rebecca Lynn, Co-Founder and General Partner at Canvas Ventures, and Jake Heller, CEO and Co-Founder at Casetext, share the top 10 questions every SaaS founder needs to ask their customers to course correct when facing near-death experiences.

Casetext was acquired for $650M in cash, but they, too, faced near-death experiences. Sometimes, you think you have product market fit and try to scale up sales and marketing just to find out you don’t have it. Other times, you might have to let people go.

One truth holds for every founder: understanding the customer. You might think you understand the customer, but you have to put your biases aside because they don’t matter. Starting with a hypothesis is great, but listening to the customer is essential.

Ok here’s the thing: you have 2 flags already (and staying home for the kids isn’t one of them).

Issue #1 isn’t that you stayed home for a bit for your kids (almost everyone wants to be supportive here) or even that you played poker per se. But it’s that you’ve been out of the game for 6+ years in sales and doing something else for work.

Sales is hard, and while every great hiring manager knows you want a diverse team, what I’ve very, very rarely seen work is someone who stepped out of sales for more than a “bit” even … want to get back to the grind. Being a parent and taking time off for that is great. But paying the bills with poker instead of sales … sort of says you don’t want to do sales anymore.

Second, working from home is a thing now for sure but leading with that also says you don’t really want to hustle.

These IMHO are 2 tough strikes against you. It may not be fair or right but it’s just reality.

So — turn it around. Address them, don’t make a huge deal of it. My advice:

• Be clear you want to get back into sales and will work your arse off.  Don’t just act.  Make it crystal clear you are a hustler.   Follow up to each email in minutes.  Not the next day.  Share a bunch of thoughts on what you’d do your first week.  Listen to some webinars.
• Do 10x the diligence on each job you apply to of someone with a more standard trajectory. Spend 20 minutes researching each role and write the best email cover letter ever. You will stand out from 98% of applicants just doing this.
• Ask folks who know you are great for intros and referrals. Every startup CEO will take a meeting that someone that respect says was “one of the best they’ve ever worked with”. Even if it’s been a few years.
• If you aren’t willing to leave home or travel for sales, well that’s part of a lot of sales jobs. Not all but a lot of them. So be thoughtful and seek out companies that by their nature don’t require it at all.

© SaaStr 2024

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