Inc - Is SaaS Back?

So for many although not all, it’s been a bit of a rough ride in SaaS since December 2021. 

The IPO market shut down then, big M&A seems blocked by antitrust, so many unicorns have stumbled, and VCs seemed to have all rotated into AI.

In fact, we asked “Is SaaS Dead” in April 2024, which went a bit viral.

And now … I think this might have been the week that … SaaS Came Back.

First, we had Onstream: the third SaaS IPO since December 2021.

Not only was it a good one, it’s one that’s growing at top, top rates.  OneStream IPO’d at a $500m ARR, growing 30%+, and is worth a very healthy $5 Billion today.  And very little of that revenue is AI-driven.  In fact, OneStream noted its CFO customers are taking AI very slowly in the financials space.

Second, SaaS OG legal leader Clio raised $600m (much of it in secondary) at a $3 Billion valuation — and did it adding fintech to the stack, not just “AI”

Third, Vanta raised $150m at a $2.5 Billion Valuation — Not Just on AI Hype

Fourth, Google Cloud and AWS are both re-accelerating even at their massive scale.  Google Cloud announced it had crossed a $40 Billion run-rate, growing a jaw-dropping 29% — and is profitable.

#1. How much, and when, sales will increase.

This will be tied to sales cycles, to some extent, but also to increasing close rates. A great VPS will increase close rates in her first quarter. So I’d hope by Day 90, she’s closing at a faster rate than Day 0. Even with the same # of leads, same lead velocity.

Now here’s the thing — rarely will a VP of Sales truly get this 100% right before they start. Hopefully, they know a lot about your business at this point, when they are putting together a 30-60-90 day plan.  But some of their ideas here won’t be quite right. More important is that in general they are, and the ideas are good, and you’re aligned here.

#2. Hiring. How, why, whom, and when.

The #1 job of a VPS at your stage (and really, always) is hiring. Getting great reps in to close more, and better, so you can hit the plan. If she doesn’t bring in a group of great reps in the first 90 days, and really, at least 1-2 good reps in the first 30-60 days … she’ll never make it.

Who will they hire? How will they find them? And when? If they can’t do this … then you didn’t hire a real VP of Sales. Hit Undo.

Many of you will come under a lot of pressure these days to pause accounts, to downgrade accounts, and more. Even Marc Benioff, CEO of Salesforce, said they are still seeing intense downgrade pressure today. Even at Salesforce.  And many of you are pushing back when you get these requests, especially where growth has slowed. It’s challenging almost everywhere.  The “app layoffs” in many cases are in their third year.

And when NRR is dropping, and new logo growth is way down … it’s tempting to make it harder to leave.  Almost all of us are seeing more of this these days, in fact.

Should you let folks easily downgrade? Should you let them even pause their account, and pick it up later when their business picks up?

You should.

At we gear up for 2024 SaaStr Annual, Sep 10-12 in SF Bay Area, we wanted to take a look back at some of our top speakers.  Yamini Rangan, CEO of HubSpot, has been a 4x SaaStr speaker across her career, from HubSpot to DropBox and more.

At SaaStr Scale, Yamini Rangan joined us to share the secrets to scaling with SMBs. I thought it was really an A+ discussion.

Honestly, I struggled with this for a while myself the first few acquisitions I witnessed from the sidelines.

• Why do founders (sometimes) own so much?
• Why does an Outside CEO get 6 or 7% or more, just for showing up to work, once the company has already established itself? Is this right? Fair?

But the answer is two-fold:

Founders get a disproportionate amount of money because they created the company, not just the idea — and they bring it to life. The singer-songwriter, the writer-director, the creative and practical geniuses that give birth to something new and successful from nothing — always get a lion’s share. Execution is hard work and challenging. But true creativity, literally willing a successful company into existence from absolutely nothing — that is a rare and unique skill set.

CEOs, even if non-founders, get a disproportionate amount of money because they are responsible for all of it. Someone has to be. Someone has to hire all the executives. Own the number. Be 100% in charge. Be fired when it fails. Be responsible to Wall Street. Make it happen. Make sure everything happens. All of it.

If you’ve never really owned it all, you may not understand. I didn’t.

© SaaStr 2024

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