HubSpot and Shopify Are Both Going More Enterprise

So two of the great leaders in SMB SaaS, Shopify for e-commerce, and HubSpot for sales, marketing and more, are going more upmarket:

• HubSpot 100+ seat deals are up 55%
• Shopify now gets 31% of its revenue from “Plus” or its bigger brands and more enterprise product

And yet … they are also both going more SMB as well!

• HubSpot’s ACV has actually come down a tiny bit to $11,225 as its also pushes its new entry-level and single-seat products
• Shopify’s smaller merchants have grown so quickly, that its enterprise revenue has only gained 1% of the overall pie.  31% now for the bigger customers (plus), vs. 30% a year ago.

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 I think 99% of successful VCs, especially “traditional”, experience Silicon Valley-type VCs have now seen you want to back the founder-CEO forever if you can. 

You sometimes get a short-term boost from a Professional CEO, especially as they often are very good at recruiting, a skill it takes many first time founders a while to truly learn and embrace. But ..it’s often all they do plus “strategy”.  Outside CEOs often never truly understand the product.  Never.  And so ultimately, you fall behind as the market changes.

If a founder CEO is toxic, or spends all the money, etc. that’s different. But I don’t know any VCs that don’t want to back a founder CEO if there’s any growth there and the founder remains all-in.

Personally, if the CEO doesn’t want to go the distance, I’m out.

And as you can see here, almost 90% of SaaS companies that do IPO … IPO with a founder-CEO.

Should you sell your startup if you get a good M&A offer?

For years, while I pretended to be neutral on this question, I’d still quietly root for founders not to sell if growth was strong:

• Why sell at $10m growing 100%, if in 12 months, you’ll be worth twice as much?
• Why sell at $20m growing 80%, if in 5-6 years, you could be a unicorn?
• It compounds in SaaS.  100%+ NRR is your ally in going long.

To some extent, I still believe this, but now I’ve seen more and more that sometimes that second good offer never comes.

That sometimes, founders get too tired to push on to the next level. That sometimes, as good as you are, the competition ends up moving even faster.

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So we’ve covered HubSpot a lot on 5 Interesting Learnings, but there’s a good reason — it’s the SaaS leader the most like most of us. Most of us use HubSpot. Most of us are building products in some category HubSpot plays in, from sales to marketing to support to CMS. So it’s a very … tangible leader for us.

And as HubSpot has now passed $2.5 Billion ARR, it’s still seeing some headwinds and challenges. But it’s also … still a machine.

It’s still growing a super-impressive 21% at $2.5B+ ARR.

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