A lot of VC advice is a bit self-serving. Not necessarily wrong, but self-serving. Is raising VC capital at a “too high” valuation a bad thing, as so many VCs say? It’s mixed.

There are risks with a too-high valuation — but also benefits:

A high valuation isn’t necessarily bad. It just has dangers. We’re seeing a ton of that now with unicorns that raised at very high revenue multiples that now are unfundable. But like many things, it’s nuanced.

So for those of us who having been doing SaaS for a long time, downtown Palo Alto often still holds a special place in our hearts.

Downtown SF was the HQ of SaaS at least from 2012-2020. It may be today, as well. I think it is, even if it’s smaller and different.

But when the web finally came back after the “Dot Com” era, it came back in large part in Palo Alto actually at first.

Before that, Google and HP started in downtown Palo Alto, and then outgrew it. Steve Jobs had an office there. And Facebook moved there from Boston to scale, eventually taking over every single office in downtown (and blowing up housing rents). Before Facebook left, downtown Palo Alto was its campus. I personally walked down the street to close our first contract with them. It was a crazy time. Everyone sat on bean bags, Windows was banned, and there was an informal ban on anyone over 30 working there. Crazy times, indeed.

In 2025, we'll host the 11th edition of SaaStr Annual across 3 days, with 13,000 B2B/ SaaS Founders, Executives and Investors, coming together to share their learning in the heart of Silicon Valley. 

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Many of my favorite VPs of Sales are now becoming CEOs. Many. And I am so happy for them. Many SaaStr OG’s have pulled this off, and I’ve watching many from Sterling Snow, CRO at Divvy joining Redo as CEO, to our own Brendon Cassidy, CEO at HiveFive, pull it off.

I have one bit of advice though as you watch them go from CRO to CEO: it’s a much, much, much, much bigger jump from CRO / VPS than you can ever imagine.

And they agree.

It’s now all on the line.

And 95% of you have never actually shipped a production into production. Committed code. Dealt with a SEV-1. Or even know what a truly great CTO looks like.

You can do it. Just realize it’s 10x harder than you imagine. Maybe 100x harder.

Just because you sell it, does not mean you can build it. And leading a great team is not the same as going from 0 to 1.

Earlier in my career, I would have said Yes. Of Course. Fire any sales rep that lies to customers. Especially more than once. Especially in my first start-up, we worked in a heavily regulated, life-or-death industry. There was no room for lies.

But time has gone on, and I’ve worked with many more sales execs. I now see and think most sales execs lie, at least a little bit. At least a bit.

So I don’t think it’s as simple as firing them for it.

I don’t like it. But I’ve come to accept that instead, you have to put gates and process around most sales execs, or most will lie, at least a little, to close the deal.

SaaStr CEO Jason Lemkin joined ZoomInfo’s Season 2 of its ZI Labs Podcast as the opening guest alongside ZoomInfo CEO Henry Schuck.

Along with co-host Ben Salzman, Jason and Henry discuss the transformative power of AI within SaaS and the evolving dynamics that are reshaping the landscape of software as a service.

So RingCental is both an incredibly impressive SaaS and Cloud company — but also a bit of a cautionary tale.

It’s been around for decades but has continued to iterate, expanding into the enterprise, the contact center, and so much more.

Fast forward to today, it’s at:

• $2.43 Billion in ARR
• Growing 9%-10%
• With non-GAAP operating margins of 20.9%

and yet …

• It trades at a $3 Billion maket cap,
• or 1.2x ARR

Now they have $1.5 Billion in debt, so one could argue it’s really 3x net of debt. But I’m not sure that’s the proper way to look at it.

So are we in a “downturn” in SaaS — or not?  It’s confusing. On the one hand, many in SaaS and Cloud are still growing at epic rates:

• Zscaler is growing 30% at $2.5 Billion in ARR
• Samsara is growing 36% at $1.26 Billion in ARR
• Klaviyo is growing 39% at $800m+ ARR
• Monday is growing 34% at $1 Billion in ARR
• Shopify is growing 21% at $8 Billion in ARR
• Crowdstrike is growing 33% at $3.65 Billion in ARR

I asked Andrew Bialacki, CEO of Klaviyo, my opening question at SaaStr Annual: “Are we in a downturn?” He instantly answered: “Not in our space.”

On the other hand, the public markets overall are tough. As you can see here, over the past 3 years Nasdaq overall is up +23.7% … but the BVP Cloud Index is down a stunning -45.5%. Yikes.

So it’s … confusing. And all over the place.

So it was great to see Dialpad announce they’d grown from $200m ARR last year to $300m ARR already this year. That’s more than 50% growth in less than a year at that scale. Wow.

The era of hyper-functional SaaS is here, and it’s reshaping the landscape of SaaS companies.

At a recent SaaStr Workshop Wednesday, held every Wednesday at 10 a.m. PST, SaaStr CEO and Founder Jason Lemkin lays out how SaaS companies are now faced with the challenge of delivering more comprehensive, automated, and efficient solutions than ever before. The bar has gone up, and it’s not just in AI.

Sorry, But There’s No Downturn.  At Least — Not In Spend, and Not Outside of B2B “Tech” Customers.

• SaaStr 766: The Future of AI in SaaS Sales with Henry Schuck, CEO of ZoomInfo and SaaStr CEO Jason Lemkin

• SaaStr 765: The Bar Has Gone Up. The Era of HyperFunctional SaaS is Here with SaaStr CEO and Founder Jason Lemkin

• SaaStr 764: State of the Cloud 2024: The Cloud AI Era with Bessemer Venture Partners, Anthropic, Jasper, Abridge and EvenUp

Listen on Apple Podcast, Spotify or Google Podcasts

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Rarer today,

As true as ever

70% of folks can do it if you micromanage them

20% can do it on their own, if it's the same way as last time

15% can own it

5% can figure out on their own how to actually do it even better

Cherish that 5%

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