Inc - There Probably Is No Downturn in SaaS

So the past 24 months have been such an odd time in SaaS and Cloud.

Some parts of it are on fire, fueled by unprecedented AI spend. Other parts, more connected to the end-consumer economy, are seeing strong growth, from Shopify to Toast to Canva. And the parts that sell “classic” B2B2B into tech are often struggling the most. Many have seen NRR plunge well below 100%, net new customer count slow to close to zero, and growth fall to the teens or lower. It’s brutal.

A lot of folks in the latter category are waiting for a “downturn” to be over.  And maybe it will be.

But here’s the thing, at a macro level, there is no big downturn.

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So I know we’ve just finished the 2024 SaaStr Annual, but we’ve learned a lot from it, even in Year 10.

One is that some of the very, very best stuff to sponsor goes fast and often is N=1 in terms of availability.  And 2025 Annual is earlier this year — it’s May 13-15 instead of the September for 2021-2024.

So it will be here SOON!!

Yes, to some extent — once a category is well established and there is a subset of functionality that is commoditized. But it’s not a marketing strategy.  It’s more a tactic to win deals vs. an establish. brand, once you have the prospect in your funnel.

Pricing “cheap” won’t get prospects to come find you, not usually.

But it can reduce friction in the sales process. And reducing friction is key to scaling in the early days … and maybe even later.

Brands matter. They matter in B2B and SaaS as much or even more than anywhere. You’re buying a solution to run your livelihood on. What you need is what works, what you can trust. Not what’s $0.60 a month cheaper.

But … then a time comes when a category is very well established, so well established that a subset of the functionality becomes a bit like water. An element of it does become a quasi-commodity.

Now, buyers that look at multiple vendors … a subset will chose the lowest-cost solution that meets their minimum spec. Period.

And, on a related note, as the winners in a category get really big … they tend to go upmarket. And raise pricing further. This creates a constant stream of Room at The Bottom.

Onestream is the latest SaaS IPO. Bootstrapped to $100m ARR. The CEO has never posted on LinkedIn. Not once.

And he’s a 2x successful founder. Selling to CFOs and finance.

On the other hand, if I were selling sales and marketing tools, I’d be all over social media, especially LinkedIn.

If you aren’t sure — then yes.

Transparent pricing has many advantages:

• It makes the sales process simpler. It allows prospects and leads to do more discovery work on their own. And it places your app in pricing context with other apps.
• It makes the sales process faster.  They already know what it costs, and if it fits their budget.
• It simplifies qualification — at least some of it. Do pricing right, and a number of customers who aren’t a great fit qualify themselves out.

But … transparent pricing almost always leaves money on the table, especially in bigger deals. And in the enterprise, sometimes it can even confuse things if a simple pricing table doesn’t really encompass a rich solution. Vendors that sell all seven and eight figures deals like Veeva and Palantir don’t have pricing pages. 

Trevor Lee, founder CEO at Myko, put together his list of his favorite SaaStr podcasts of the year, and they really are some of the best ones.  I’m all in on these Top 5.  Listen / watch them to really learn.

If you want to catch up, these are 5 great ones:#1. 9 Easy Sales Concepts People Get Wrong with Sam Blond

A classic.  You’re probably making these mistakes. Or your sales team is.

How do you build a customer-first strategy and structure for your business? Donald Hasson, CPO at Dashlane, shares insights on how to think about solving really hard problems for customers and how to optimize for the best results for your business.

© SaaStr 2024

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