SaaS Business Growth

There is no one-size-fits-all when it comes to GTM. Maja Voje and I studied 12 leading B2B SaaS companies. (including interviews with their teams) Here’s what we learned: 1. PLG is eating the world >80% of the companies in our study employ PLG in some fashion. Even enterprise companies like Snowflake and Salesforce are adding free trials & freemium. It’s the new normal. Why is this working for them? In 2024, the best marketing is often your product. Users rarely want to lock in a $500K+ contract without trying the product first. But you do need to layer on a strong product-led sales motion to make enterprise work. 2. Dominate one at first, then layer on many Every company we studied got one GTM motion massively right. And, in each case, they still use that GTM motion in some form today. But, they layer on other motions over time. The ideal way to layer is symbiotically: • ABM couples nicely with outbound • Inbound supports outbound • Partnerships amplify PLG For instance: Dropbox grew at first massively on referrals. Now, other channels are much more important. 3. ABM and Outbound are pillars of enterprise For 5- and 6-figure deals, it’s difficult to rely on inbound or PLG alone. The buyer is used to a different process. They want to be hand-held. This is where motions like ABM and outbound shine. That’s why you still see the Snowflake’s and Salesforce’s of the world focusing on them. They’re the bread and butter of enterprise. So… bringing it all together, here’s where to start based on your buyer. If you’re selling to consumers or prosumers: • Lean into PLG, community, and partnerships early on • Layer in paid marketing as you find product-market fit and have budget to scale If you're selling to SMBs: • Blend inbound and outbound motions to build awareness and relationships • Paid digital can accelerate pipeline generation as you dial in your ICP If you're selling to enterprises: • Focus on targeted ABM and partner ecosystems • Inbound is great for air cover, but outbound is crucial for landing large accounts If you have a complex or technical product: • Make sure you have developer docs, free tooling, and community support from day one • Don’t underrate channels like partnerships & paid digital; they can still be crucial support And above all: 1. Remember what works at one stage may not work another 2. Remember the law of diminishing returns 3. Be willing to pivot when necessary

Early-stage venture is so weird right now. I've been trying to use data to put some evidence behind the general vibe that seems to dominate early-stage venture backed startups. I'd describe the vibe as "generally gloomy with pockets of rabid enthusiasm". So...weird. The chart below may have something to do with it. We looked at all primary rounds raised in the first half of each year since 2018. This analysis just includes SaaS companies but it applies to many other sectors as well. Black line shows the change in median valuation since H1 2018, orange line shows the change in number of rounds. These two metrics paint completely different pictures of the world. 𝗦𝗮𝗮𝗦 𝗦𝗲𝗲𝗱 𝗦𝘁𝗮𝗴𝗲 • Median valuations in H1 2024 are up 103% since H1 2018. In fact they've never been higher! • Total rounds raised in H1 2024 is down 14% since H1 2018. 𝗦𝗮𝗮𝗦 𝗦𝗲𝗿𝗶𝗲𝘀 𝗔 • Valuations up 111% today compared to H1 2018. • Total rounds down 7%. 𝗦𝗮𝗮𝗦 𝗦𝗲𝗿𝗶𝗲𝘀 𝗕 • Valuations up 136% today compared to H1 2018. 136%! • Total rounds down 3%. So the gloom people feel comes from the round activity. Things are moving slowly, fundraising is taking forever, etc. And the bursts of energy come from the high valuations. These "prices" (if you think of it as a market with VCs on one side and founders on the other) are super high. Now I don't think it's reasonable to assume that total rounds and valuations should always trend upwards together. There just aren't enough VC-investable startups for the line to increase linearly. But this moment does feel out of whack. There is some influence from the AI boom on the high side of these valuations but honestly this analysis applies across industries and technologies. The increase in valuations brought on in the pandemic boom have been far stickier than the lack of funding would suggest. What happens next?...No, I'm genuinely asking. Perhaps these lines have diverged permanently with only a few companies achieving high valuations in our future or maybe valuations will level off and fundraising will slowly climb. Or something else entirely 🤷 If this sort of analysis is your thing, be sure to subscribe to our Data Minute newsletter at the link in the graphic! #cartadata #startups #venturecapital #valuations #founders

The SaaS apocalypse is here. That’s not Linkedin hyperbole. This is based on new data from 50+ public SaaS companies. In the last 3 years, they have lost 50% of growth and CAC has grown by 60%. Here’s why the Old Unicorns are dying and what comes next: BACKGROUND The COVID era venture funding created the illusion of endless SaaS expansion. The hangover has now arrived. Thanks to research from Winning by Design and David Spitz on Top 50 public SaaS companies, growth has dropped from 36% (2021) to 16% (2024). In the same time CAC has grown by 60%. I have been warning about this moment for the last 12 months. Now I finally have data to back it... Unfortunately, I'm afraid it's only going to get worse for many vendors. But a few will find ways to rise above this noise.   WHAT SHOULD YOU DO ? If you are a SaaS entrepreneur, here are a few vectors you need to consider : 1. Differentiate or Die There will be 2x more vendors in every category within 18 months. Your product will get drowned in noise unless you know how to capture attention and differentiate. 2. A great product will no longer help you survive There’s going to be a product parity where all products in a category begin to look the same. Real differentiation will come from brand, narrative, thought leadership, GTM innovations and community. 3. Premium vendors need to prepare themselves for change TAM is more or less flat but vendor count is exploding. This means revenue/vendor will shrink and will lead to increased competition. Expect downward pricing pressures and longer sales cycles. Brand premium will have to be re-earned every quarter.  4. GTM teams will become the power centers Product and Engineering are important but in the future, without strong GTM, rising CAC will destroy companies. GTM innovations will be key to survival. 5. Venture returns and Exits will get Weird Winner takes all models are under threat and hence growth at all cost may not make sense for all portcos. We will see a wider gap in venture outcomes - fewer breakthrough successes, many more failures and success will come in the form of creative, weird and opportunistic exits. 6. Time for outcome based pricing is NOW As seat revenues drop and commoditize, there will be a landgrab around outcome based pricing and long term contracts. This is no longer optional but key to long term survival. 7. Endpoint solution will fade away Eventually no buyer or seller will be able to afford high CAC for a tool that does only one thing well. The race will switch to becoming a platform or plugging into one. New vertical stacks and platforms will emerge, spots will be scarce and early adopters will capture an outsized share of the rewards. CONCLUSION The growth engine of last decade is already broken. Rearchitect your GTM for the future or prepare for your business to get harder every quarter.

SaaS Valuations are back to earth. BUT, it’s not over. We’ve just exited the hype-y euphoric easy-money environment. So, it’s not a surprise that valuations have come back down. Almost to general averages across the past 10 years. This is GREAT news for both investors and startups, really. Most SaaS businesses are back to much more reasonable valuations. 📉At the same time, it’s stabilised to a point where it’s near median. Surely valuation drops mean underperformance, right? Not exactly. 📈On average, public SaaS companies still outperform indexes by a decent magnitude. (607% [SaaS] versus ~ 380+% [NASDAQ] and ~200+%[S&P 500) over a decade) I’m hopeful this means a slow, steady recovery in the future ahead. It also implies more conservative investing, And by that virtue, conservative founders. It’s something the ecosystem desperately needs. Investors: → Update your assumptions and benchmark valuations → Be careful, ask questions, and seek signals in the noise → The risks have lowered, take advantage of the time Startups: → Go forth with conviction loosely held; embrace change if warranted → Stop focusing on vanity metrics like valuations. Run sustainably lean and benefit when capital comes back. → Start raising early to give yourself more room Earth 🌍 is just a necessary pit stop. We’ll go back to the Moon 🌕 someday. Be patient and spot the opportunity. What do you think? Source: SaaS Capital Index by SaaS-Capital

🆕 Building a world-class sales org with Jason M. Lemkin Jason is the founder of SaaStr, the world’s largest community for B2B/SaaS founders, and the mastermind behind two of the world's largest annual B2B tech conferences, SaaStr Annual and Saastr Europa. Prior to founding SaaStr, Jason was CEO and co-founder of EchoSign (sold by Adobe), VP at Adobe, co-founder of NanoGram Devices Corp., and VP of NeoPhotonics. In our conversation, we discuss: 🔸 How long a founder should be doing sales 🔸 Signs it’s time to hire full-time salespeople 🔸 Why you need to hire two salespeople 🔸 How to comp your salespeople 🔸 How to interview salespeople 🔸 When to hire a VP of sales 🔸 How to avoid salespeople flaming out 🔸 How to scale your sales org 🔸 How to improve the relationship between your sales and product teams 🔸 Much more Listen now 👇 YouTube: https://lnkd.in/gJZ-WqyQ Spotify: https://lnkd.in/gjgKCACQ Apple: https://lnkd.in/gXGY3VAn Some key takeaways: 1. Hire your first salesperson when you have closed the first 10 customers and are spending more than 20% of your time on sales. Don’t be swayed solely by impressive resumes or acronyms; instead, seek out those individuals who you would personally buy your product from. 2. Instead of rushing to hire a VP early in the startup phase, wait until you have established a repeatable sales process and witnessed success with initial sales reps hitting quota. Hire a VP of Sales to help you scale from three sales reps to 300 reps. 3. Make sure your VP of Sales actually wants to sell, not just manage. 4. Prioritize the early success of sales reps by allowing them to keep 100% of their initial sales for the first three months. This provides an opportunity to assess their capabilities without immediate financial pressure. 5. If your salespeople are making substantial money, it’s a sign that the company is succeeding and the equity of both the reps and the founders is increasing in value. Therefore, don’t be discouraged if your sales team members are making significant earnings, as it correlates with the overall success and growth of the business. 6. Involve sales in product development to ensure alignment between customer needs and product roadmap. Initiate a weekly meeting between the VP of Sales and the VP of Product to discuss the budget allocation for feature requests and prioritize it. This regular interaction ensures that both teams are aligned on priorities and helps prevent last-minute disruptions.

10 years ago, I joined Freshworks in a customer support role and since then worked and consulted with few SaaS companies across sales, support, marketing and product. Here are 34 short lessons I’ve inferred from my journey (manually typed, no edits, no AI) 1. Good product with bad marketing is better than bad product with good marketing 2. The problem you’re solving and who you’re solving it for is more important than how you’re solving it 3. You will not be successful in your role, any role, if you don’t understand what your product does 4. A combination of the problem you’re sovling and your target audience defines your strategy 5. It is completely okay to build low cost alternatives to existing SaaS products 6. SaaS playbooks are great to read as a blog post, it will fail for you if you don’t contextualize it to you 7. When you build a product, you’re building it for an individual within a team. Understand how businesses work. Understand how that team works within that business. Only then will you understand how to solve the problem for the individual within that team. 8. Unless you’re solving your own problem, you are not your user. Be humble enough to know that and talk to them. 9. The underlying reason for churn always points to the product not adding enough value. Fix that before UX changes to the cancellation flow. 10. Decisions like product-led vs sales-led, usage based vs per seat pricing or free trial vs free plan can only be made in the context of the problem you’re solving and target audience 11. Positive feedback is not. A meeting is not validation. Verbal committments aren’t validation. Money hitting the bank is validation. 12. Your biggest strength is your understanding of the problem space and your audience, not your product. Detach yourself from the product, attach yourself to the problem. 13. Some decisions cannot be made within a conference room. Accept that, settle for the closest option and ship. 14. Customers always have ‘helpful’ inputs into how you should solve a problem. Remember, their expertise is only in the problem. YOU should be the solution expert. 15. In sales & marketing, being wrong is cheap. In product & dev, being wrong is costly. 16. Where you build your ‘personal brand’ (for social selling) depends on your audience. No point in having a viral LinkedIn post if your audeince don’t hang out there 17. Product strategy depends on the problem and target audience. Marketing strategy depends on the problem and target audience. Pricing depends on the problem and the target audience. Everything depends on the problem and the target audience. 18. Don’t discount having your user persona as a friend, advisor, mentor or a team mate. Have a mix of few folks so you’re not biased by one person. 19. (building in India) Valley strategies, especially on culture and team, may not work here. Even if you’re building for a global audience, undestand the nuance in building from India (contd in comments)

The State of Play in SaaS: 15% revenue growth is the bar to clear One of my favorite sources of data this year has been Clouded Judgment, published by Jamin Ball Partner at Altimeter Capital. It's no secret that post-COVID valuations of SaaS in 2023 had come down to 3-4x revenue multiples due to a decline in growth numbers. This caused a lot of SaaS companies seeking acquisitions to delay their plans. This has stabilized however. The synposis is this: * Top: If you're growing faster than 25%, you are worth 11x+ revenue (data seems sparse to me). * Middle: If you're growing 15-25%, you are worth 10x revenue. * Bottom: If you're growing below 15%, you are worth 4x revenue. The data calls out a few things: * Very few companies growing faster than 25%, which bears out my own experience. When churn is up, the headwinds are greater. * The spread between the middle and the bottom is the entire story. The difference between the middle and bottom growers is DOUBLE your valuation. If you are looking for an exit, or to raise money this is a critical difference. For me that number is 20%. Mainstream Series A-C SaaS companies should calibrate their growth goals at 20%. It is simple math as to why due to the huge valuation difference in being above 15% growth. For many, in their mid-market and Enterprise segments, net revenue retention rates are north of 90%. However SMB is flagging and retention is the issue. If your NRR is below 80%, it is difficult to grow, period. There are only a few solves for this. First - evaluate if your pricing has gotten ahead of the market. If you are in the Shopify ecosystem and have raised prices 2-3 times more than Shopify itself has raised its pricing, than my feeling is you are in trouble. Shopify is a value ecosystem, especially in the lower (historically strong for Shopify) segments. So pricing increases will exacerbate the challenge. Second, consider your innovation. Many companies have forgotten their historical customers in favor of more lucrative up-market customers. This is logical, however it's also a big mistake. Every category has more competition and your customers have options. Many are voting with their feet.

As the world follows every whisper & rumor from AI, what has happened to public SaaS? The answer is not much! All the fun is in the private markets. Multiples haven’t moved outside of a narrow band since the post-Covid crash in 2022. Even here, AI is the story, with AI SaaS companies seeing different valuation correlates : revenue growth. Meanwhile, non-AI SaaS companies are valued more broadly with efficiency metrics included. The scarcity of hyper-growth companies in 2025 tells its own story. Public SaaS companies have matured. The median company in our dataset grows at 13.7% annually, with a median multiple of 5.5x. Most companies cluster near the median, with a few outliers driving exceptional growth rates. The distribution shows a steep drop-off from the top performers & a cluster of shrinking businesses. The private market contains tens of unicorns with growth rates multiple times higher in both AI & classic SaaS. At some point soon, the largest AI companies’ capital requirements will push them to IPO. At that point, the data will look very different!

✨ Channel Sales in SaaS:: Scaling Beyond Direct Sales For SaaS companies, scaling beyond direct sales is a challenge. Hiring more sales reps isn't always the answer—building a strong channel sales strategy can unlock sustainable growth. But here’s the truth: most channel partnerships fail because they’re treated like a shortcut to revenue. Successful channel sales require: ✅ The Right Partners – Not just anyone who can sell, but those who align with your ICP (Ideal Customer Profile) and add real value. ✅ Enablement, Not Just Onboarding – Training, playbooks, and ongoing support ensure partners aren’t just resellers but true extensions of your team. ✅ Incentives That Work – Competitive commissions matter, but so does ease of doing business. The best programs minimize friction and maximize motivation. ✅ A Win-Win Relationship – If your partners don’t see long-term value, they’ll move on. Mutual trust and shared goals make partnerships last. Channel sales isn’t just an alternative to direct sales—it’s a force multiplier. The best SaaS companies scale by building ecosystems, not just sales teams. What’s your take? Have you seen channel sales succeed (or fail) in SaaS? Let’s discuss!

A client just closed a $2.4M deal from LinkedIn content. How they did it? They trusted us to focus on the right metrics. Quality of engagement >> Quantity of engagement. – Tech CEO: 3 enterprise deals worth $2.4M – B2B SaaS CRO: 18 qualified SQLs in pipeline – Consumer brand founder: First inbound deal in 1 hour When you post great quality stuff over & over aimed at your audience - the right people take notice. Because behind the metrics, we heard: The VP at a $3B company who said "I've been following your content for months – when can we talk?" The Fortune 500 exec who reached out because "your posts are the only ones I actually read." After 2000+ posts ghostwritten and 4 years building on LinkedIn, the 2 things that matter most: 1. Doing the right activities enough times - posting, connecting etc. 2. Quality of your ideas and insights. The creators winning on LinkedIn aren't the ones with the most likes. They're the ones whose content creates conversations that matter – with the right people, at the right level, about the right problems. Because when a CEO needs to make a 7-figure decision, they don't check your engagement rate. They check if you understand their world. What metrics are you really chasing?