Your Competition Isn’t Always Out to Get You

This edition of the SaaStr Daily is sponsored in part by Stripe

So competition is so visceral in most of SaaS, and especially in start-ups, where every lead is often precious. Especially every bigger one.

But one thing I find a lot of start-ups get wrong is how their much bigger competitors think about them.

The other day I was catching up with a founder of a SaaS leader at $2B+ ARR and talked about the space in general, and mentioned an adjacent competitor at $80m ARR, growing quickly. Not a direct competitor, but an adjacent one.

This A+ founder had never heard of the competitor at $80m ARR. I’m sure he would have it was a direct competitor vs. an adjacent one, but it’s in the same overall space.

But the vendor at $80m? They constantly talk about the $2B+ ARR competitor.

Similarly, when I was a VP at Fortune 500 Tech Company, the list of top competitors in many categories was often one that looked much more at today than the future. It makes sense. VPs have to hit the plan for this year, not the one for 5+ years out there. So the competitors we looked at when I was in a Big Tech Co were actually a materially different group than when I was running my own SaaS start-up.

A tiny example is SaaStr itself. When we moved SaaStr Annual post-2020 to September for 3 years (SaaStr Annual 2025 is May 13-15), it ended up conflicting with Dreamforce and we had to move it. The conflict created huge issues for vendors, for venues, and more. A big deal to us. To Salesforce? They sort of knew, but didn’t care. It didn’t matter to them.

Look this isn’t the most profound post in the world, but an important one.

Whatever you think about the competition — just realize they likely see the world differently. Especially if they are either smaller or larger than you are.

We all have different realities.   Especially when it comes to competition.

So we’ve talked a ton on SaaStr over the years on the risks and benefits of hiring your various VPs and C-level execs. We’ve spend the most time on hiring a great first VP of Sales, but all the VPs are super important.

Now that time has gone by though, I’m 100% sure that the worst mis-hire is CTO / VP Engineer. Because it becomes the death of innovation.

I’ve seen this fact pattern or some variant thereof so many times:

• Founder CEO + CTO
• CTO gets start-up to $5m, $10m, $20m but just “can’t scale”
• VP of Engineering or CTO from Big Tech Company hired
• Everyone chooses the Nice Candidate
• The Nice Candidate never codes, never learns the code base, never gets the magic
• The Nice Candidate hires a bunch of engineers under them that aren’t that great

At first, things seem better with Mr. Nice Guy CTO / VP of Engineering.

It's back! Our 2nd SaaStr Digital AI Day.

SaaStr AI Day 2025 on Jan 28. Where SaaS Meets AI.

AI is a force of nature in B2B now. But what’s real in SaaS? And what isn’t? What’s working — and what isn’t … yet? 

Join us LIVE on Tuesday, January 28th 2025 as we bring together the SaaStr community together with the brightest innovators in SaaS and AI.

Hear from the leaders of Google Cloud, Monday, Paragon, Dialpad, Cursor and more. 

At SaaStr Annual’s AI Summit, we gathered an all-star panel of product leaders who have built some of the most widely-used AI features in production today. The speakers included Mario Rodriguez, Chief Product Officer at GitHub at GitHub, Diego Zaks, VP of Design at Ramp, Dane Knecht, SVP of Emerging Technologies at Cloudflare, and Vincent van der Meulen, Design Engineer at Figma, and Dani Grant, CEO at Jam.dev.

Many that are self-serve and SMB-focused can start off without a sales team … for a while.But almost none stay without a sales team …  forever.

• Yes, Atlassian since well past its IPO had almost no “direct” sales team. But it had and has a very large channel that sells its product into the enterprise, and a lot of internal resources that support the channel. Those channel salespeople aren’t employees, so yes, leaning so heavily on the channel is unique. But it’s just third party selling instead of first party.  Jay Simons, ex-President of Atlassian, was very clear on this in our convo just after its IPO.
• Yes, Slack started off with no “outside” sales team. But as it went toward IPO, 50% of its revenue came from bigger, enterprise deal.  And it staffed up a very big sales team.
• Yes, Dropbox started off with no traditional sales team. Then to sell Dropbox Enterprise, it added several. And Box’s revenues are now 99% through the sales team, from 0–1% when it started as a pure freemium product.
• Yes, Canva got to $1B ARR with almost no sales team.  But it scaled one up as part of its Enterprise product and platform.
• Figma, Notion and more added full sales teams … over time.

This edition of the SaaStr Daily is sponsored in part by Stripe

Join the internet economy conference. Stripe Sessions brings together the payments and financial technology community to share ideas that drive progress.

So Carta and Crunchbase are two of our favorite data sources at SaaStr, and Crunchbase’s lateste VC funding report is out.

Two data points jumped out at me:

1. 51% of all U.S. VC funding ($178 Billion total) went to SF Bay Area companies
2. Venture roared back in Q4’24.  Not to ’21 levels, but up +70% over Q4’23.

Now it’s not quite that simple.  Big AI deals in the SF Bay Area and growth rounds were a big part of it. Overall early stage VC wasn’t up much last year — or in Q4. So VC is back, but it’s back for AI (we know this) and fueled by big growth rounds.

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