You say we're in a "downturn"?
It's more like the weather
Raining in some places,
Sunny and bright in many others,
Almost too good to be true in a few https://t.co/AL5H7dA4BG— Jason ✨👾SaaStr.AI Sept 10-12✨ Lemkin (@jasonlk) July 24, 2024
So just what the heck is going on in SaaS today? There really are 3 categories of SaaS companies:
🔝 10% or so are growing like a weed, often fueled by AI (which also is fueling Cybersecurity).
Databricks, OpenAI, Apollo, Wiz, Clay, GitLab, ServiceNow, Crowdstrike, Drata, Vanta, etc. OneStream (SaaS for CFOs) just IPO’d growing > 30% at $500m in ARR!
⬆ 20% or so are doing well, because they sell to end consumers — outside of tech. The U.S. economy is doing fine overall.
Canva, Monday, Klaviyo, Samsara, Braze, etc.
🔀 60% of us are selling classic B2B2B products. There, buyers are still looking to cut. Even 3 years into a “downturn”.
Iconic leaders like Salesforce, Zoominfo, RingCentral, Five9, Zoom, Twilio, Asana, etc.
Salesforce needs 3x pipeline coverage today to hit its number. 24 months ago, it was just 2x.
Salesforce: We Need 50% More Pipeline Than Before To Hit the Plan
I’m oversimplifying to some extent, but not overall. And this is also true at scale-ups and pre-IPO SaaS startups. Maybe 10% are still growing like its 2021. Another 20% or so are growing well enough. And maybe 60%-70% have seen growth slow to 20% a year or less.
Net net there are still plenty of winners and a steady stream of outliers.
But the biggest issue is with 60%-70% of folks in “tech” going into a third year of cuts, seat reductions, and workload reductions — it’s just changed people. If the goal is just to grow 20% this year, or even to not shrink — who is striving to learn? To grow as a professional? To do great things?
Not as many of us as used to. It’s just different. It’s not a downturn everywhere, it’s not a downturn on Nasdaq, it’s not a downturn in the consumer economy per se. But 70% of us in B2B tech aren’t really in growth mode anymore. That’s changed everyone.
The post How is SaaS Doing Today? For 10% It’s Great. For 20% It’s Still Pretty Good. For the Rest? It’s Tough appeared first on SaaStr.
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Jason Lemkin, Khareem Sudlow
