The reality is for most startups, budget comes from disruption.
Specifically, stealing it from an older incumbent.
That’s not easy, and it requires a very specific playbook.
This got inverted in 2020-2021. There was such a rush to deploy software, and budgets grew so quickly … you didn’t have to disrupt anymore. You just had to seemingly add productivity, fuel sales, etc.
Now, we’re back to a world where 90% of us have to earn that budget, not just from an ROI calculator — but from stealing it.
Stealing it from another vendor. Right now, AI is stealing it from other apps. Apps aren’t being renewed to free up budget for AI projects.
But more common is just stealing it from a big incumbent. HubSpot stole $700,000,000+ of CRM revenue from Salesforce. Salesforce stole from Seibel. Etc. etc.
That budget to steal is always there. There’s $250+ Billion spent on SaaS apps a year.
Gartner: SaaS Spend is Actually Accelerating, Will Hit ~$300 Billion in 2025
Most apps though work just fine. And even if they don’t, it’s a huge bar to rip-and-replace. Especially in the enterprise. The soft costs are often far higher than the direct costs. So it’s a high bar.
That’s how it should be. Startups are supposed to be truly disruptive. For real.
If growth has slowed for you, maybe ask a simple question: what big budget item, what big budget vendor, are we truly disrupting? If you’re not sure — maybe that’s why growth has slowed.
Because again, that budget is always there.
Dear SaaStr: Do VCs Prefer Startups With No Competition, Or Those Disrupting Competitive Spaces?
(image from here)
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Jason Lemkin, Khareem Sudlow
