Everyone’s Adding AI -- But It’s Not Accelerating Growth For Most Of Us
And "What it Takes to Get Funded in 2024 with SaaStr CEO and Founder Jason Lemkin"
Everyone’s Adding AI. But That Doesn’t Mean It’s Accelerating Growth.
So AI is a generational change in software. Where it will exactly all go we can’t 100% predict.
But there’s a general sense of the Haves and Have Nots. That the Open AIs, Microsofts and Databricks “get it”, that Nvidia is the fuel, that all the hot start-ups are AI native and still raising at unicorn valuation … and that many SaaS leaders are sort of being left in the dust.
Maybe. One thing just to be aware of is every SaaS and Cloud leader is “AI-ifying” their products:
Zendesk and Intercom all-in on AI, even as 100s of start-ups are building AI chatbots
ServiceNow attributes a huge amount of its growth to AI-driven workflows
Asana is all-in on AI
Salesforce and Marc Benioff are all about being AI-first as well
ZoomInfo has launched a very exciting Sales AI Co-Pilot
We're counting down to SaaStr Annual 24!
Save on tickets before prices go up July 31st
Hey SaaStr Community,
We're getting so close now to SaaStr Annual 2024 — the world's largest community gathering for SaaS and Cloud professionals — from Sept 10-12 in the San Francisco Bay Area.
Head to the SaaStr Annual 2024 site to lock in your rates before the prices increase for last-chance tickets at midnight on July 31st!
You're just a few clicks away from joining more than 13,000 fellow SaaS CEOs, founders, revenue leaders, and investors at the 10th(!) SaaStr Annual 2024. It's three days of experiential learning and connecting with your favorite SaaS companies, like OpenAI, Nvidia, Bill.com, Plaid, Klaviyo, Google Cloud, Oracle, G2 and many others.
So what are you waiting for?
What it Takes to Get Funded in 2024 with SaaStr CEO and Founder Jason Lemkin
What does it take to get funded in 2024?
Jason Lemkin shares the answer during Workshop Wednesday, held every Wednesday at 10 a.m. PST.
Some of this stuff you’ll know, and some of it you won’t. What’s driving VCs today? Let’s find out.
Venture capital is the same as before but different. It’s a weird world where seed valuations are at an all-time high. It’s always been hard to raise venture capital, but if you’re in the group of folks VCs do want to fund, it’s like 2021 in some ways.
You won’t see a new unicorn a day, but insiders are writing their third or fourth check. These unicorns are often different from the 2021 unicorns. We all mocked those 100x revenue deals as the market crashed, especially when the average public company was trading at 5-6x. But those kinds of deals are back and only in the segment of AI.
Why are they being funded? VCs aren’t dummies. They’re bet-makers.
Coatue: We Have a 25 Year IPO Backlog. But Software Will Bounce Back Soon.
So Coatue a leading multi-stage VC firm put up a ton of great data in its East West conference. A few that I thought we were super helpful for SaaS folks:
“At the 8th annual East Meets West (EMW) conference, we gathered technology leaders from around the world for three days of thought-provoking conversations and connection building.
We kicked off the event with our annual “Coatue View on the State of the Markets” to provide an outlook on the macroeconomic landscape that helps guide our view on both the public and private markets. Despite ever-present uncertainty and change, our analysis suggests that public markets remain resilient and that AI continues to present a new vector of opportunity.”
#1. There Are So Many Unicorns, We Have a 25 Year IPO Backlog
Now of course in theory, IPOs could dramatically exceed their historical pace. But assuming that doesn’t happen — and it’s been a very dry 2.5 years for IPOs — it would take 25 years to get through all the unicorns we already have.
When Not to Offer a Free Trial. Answer: When Your App Simply Can’t Pull it Off.
Lots of SaaS companies don’t offer a free trial — intentionally. But more and more are adding them, from Atlassian to New Relic to Monday.com and more.
Slack and Zoom showed us you can be more far freer than average and grow far faster than average. At least some apps can. And HubSpot and Mailchimp added Free later … and accelerated as a result. Some great data from HubSpot here a little ways back.
5 Interesting Learnings from OneStream at $480,000,000 in ARR
So we’ve finally got another SaaS IPO gearing up — OneStream. It’s SaaS for CFOs and financial operations, a large but somewhat under-discussed category. SAP and Oracle are very strong here.
$480,000,000 in ARR
Growing 34% (strong)
98% GRR (!) and 118% NRR
11% Free Cash Flow Margins, 20% the past 2 quarters
Dear SaaStr: What Are The Traits That Define a Great VP?
According to The Standard, Salesforce in many departments will now need to go back to the office 4-5 days a week.
Not flex time, not 2 days a week.
But basically, close to full-time, including many in sales:
According to an internal memo reviewed by The Standard, San Francisco’s largest private employer has made the call to bring the majority of its employees back into the office, reversing a broad shift to remote work during the pandemic.
Select employees in sales, workplace services, data center engineering and onsite support technicians under the chief information officer will be required to come to the office four to five days a week, effective Oct. 1.
The One Thing My Worst Investments Had in Common
The worst investments for me have one common theme:
The founder was a bit of a B.S. artist.
I remember one time a founder told me how Salesforce did a certain process internally. That sounded wrong to me, I was 99% sure. I checked and it turned out it wasn’t remotely accurate. The founder had just made it up.
I still invested. The company initially was a rocketship. It went from $1m to $10m ARR in 6 quarters! It was … Almost a Great Product. An almost, like the Salesforce story.
But it couldn’t deliver what the founders said it could. And churn lurked, and then exploded. The product didn’t really do what the customers expected, either. Not in the end.
Today, it’s barely growing.
Too much “Almost Truth” -> Not Being Enough In The Real World.
A little reality distortion field is probably necessary to build something big. It’s so hard. But too much? It hasn’t worked out for me.
LET'S WATCH
Video of the Week
How to Use AI-Powered Marketing to Get More Leads and Customers with Guillaume Cabane of HyperGrowth Partners (Video + Pod)
As a marketing leader, how do you use today’s AI platforms and tools to become more efficient? Guillaume Cabane, Co-Founder and General Partner at HyperGrowth Partners and ex-head of marketing at Drift. Gorgias and Segment, shares how you can win with AI in outbound, SEO, and paid.
Deep Dive: AI-Powered Marketing to Get More Leads and Customers with HyperGrowth Partners.
LISTEN TO THE LATEST
The Official SaaStr Podcast
New Episodes of the SaaStr Podcast with SaaStr, Box, HyperGrowth, and More!
SaaStr 751: How to Use AI-Powered Marketing to Get More Leads and Customers with Guillaume Cabane of HyperGrowth Partners
SaaStr 750: What it Takes to Get Funded in 2024 with SaaStr CEO and Founder Jason Lemkin
SaaStr 749: The Lost Podcast Aaron Levie, CEO of Box, and Jason Lemkin, CEO of SaaStr, in 2013: "Thinking About $1 Billion in ARR"
Listen on Apple Podcast, Spotify or Google Podcasts