Dear SaaStr: What Are Some of the Biggest Changes for SaaS Founders and Startups in 2024?
A few I’m watching:
#1. The Rise of One-and-Done Fundraising as a Vibe
Founders will get back to only planning to raise one round to truly get to product-market fit for real. More startups benefit as the dilution ends up far less, a la Klaviyo, or The Trade Desk, etc. Yes, both raised more money at the very late stage, but really only needed a round or two to hit scale. A related post here.
#2. Slower Growth in SaaS is Internalized. For Better or Worse.
The tougher times for many in 2022 and 2023 has led many to internalize slower, more efficient growth. Not just more efficient growth, but slower growth too. We’ve entered a new era of Hyper, Hyper-Growth Startups like OpenAI and … Almost Everyone Else settles for Slower Growth. I’m not sure this is a net positive. It’s very hard to build something really big if you aren’t at least growing 40%+ or more when you hit $100m ARR. So before that, you sort of have to be growing faster to go big.
#3. We Give Up on Hiring, Hiring, Hiring — Not Completely, But in Part. The Tiny Team Becomes a Vibe.
With fewer and fewer SaaS folks willing to work as hard as before; the average fully-burdened cost of a SaaS employee at $300k; and later-stage capital much harder to get … everyone just focuses on fewer hires. To some extent, this benefits fractional hires, but only at the margin. Folks align at 50 employees at $10m ARR, 100 at $20m ARR, as the New Normal. Fractional both helps and hurts. Folks that need teams to operate, vs. doing a lot of work themselves, become somewhat obsolete.
And much more here in a recent deep dive I did with Pavillion CEO’s here:
A related post here:
(tiny team image from here)
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Jason Lemkin, Khareem Sudlow
