SaaS companies

“I think SaaS companies, I see them progressing through a bubble I think that companies that are the large companies that get enough funding, they'll continue to need the same amount of software that they need now, and I think that's going to continue to grow, …”

“At the Series A for SaaS companies, I suspect you might see like a 10 or 15% reduction. I mean, I ran this analysis for SAS in early 2016. The average Series A for like a premium SAS company was about ten million dollars. And I suspect that will probably fall …”

“So you see companies that don't get their sales model targeted for scale always drifting up market.”

“If you look at most SaaS companies, and really, I think, most companies that generate revenue, 30 to 40% of their revenue will come from Europe”

“Most early stage SaaS companies under, underprice their offering, and I think it's maybe lack of confidence, or lack of enterprise experience, or understandably so, being timid about a small feature set That you're putting into the market.”

“And in particular today, I think we've got a little bit of a hangover from the funding cycle of 2014, 2015, where there was a huge boom in venture capital funding, and a lot of companies raised money at very high valuations. And, you know, these are ten millio…”

“Companies can reach 10, 20, thirty million of ARR, but if the market depth isn't there, they can really slow down.”

“You tend to start at 40 or 50% gross margin, but then you get to 95, 98%, we're seeing in some companies we work for gross margin, and then you just stay there. As opposed to SaaS companies, we're constantly having to build another feature or deliver a service…”

“So before, 1015 years ago, SaaS companies with a hundred million, you can go public. Now, it's actually more like 200.”

“You're not only acquiring SMBs, but you're trying to be very thoughtful about acquiring digital natives because they will be your future enterprise players”

“If a company can't make its own money, they require outside money. Outside money dries up. Things have to change. I mean, there's gonna have to be late. There already is. It's not like this is news, but layoffs, deep cuts, some austerity measures. You know, th…”

“The price increases that we have seen since, like, let's say, a corn launch to what it charges yearly today and what it will charge in five to 10 years, I think it has a similar trajectory to what we've seen with SaaS companies and their ability to extract val…”

“There's now a Duolingo that's, I would just want to stress this, in this current macro, they have a much higher multiple on their revenue run rate than comparable SaaS companies.”

“For traditional cloud companies, SAS companies at growth. I would say, generally speaking, there's a 15 a X AR ceiling, a pretty universal.”

“In 2019, the average SaaS company that went public absorbed just shy of four hundred million in capital, three hundred ninety million in capital before they went public.”

“88% of SaaS companies that have IPO'd have the founder as CEO at IPO.”

“The great paradox right now is that people who are in subscription pricing generally have been hit harder than those who are not, but they're nevertheless still growing faster.”

“AI, first of all, is going to help All of those 500 companies and still have good tech cultures do a lot better. So it's going to make the existing SaaS companies worth a lot more”

“And this is a, this is again, one of these windows Where 10, 20, 30, 50 companies will get started that, that were like the window in two, in the mid 2000 where like all of today's SaaS companies basically emerged in like a five year period essentially. And we…”

“Unless you're trying to just, like, get acquired, you will be valued at a multiple of your revenue or a multiple of your cash flows that you're generating, and they tend to be an average of, like, you know, what, five to 10 X on the revenue multiple side”

“The quickness of the scale is, is, is unlike, it's like three, four, five years of what SAS company, like your traditional SAS companies were doing. We're seeing in under a year and we have a whole portfolio of companies that are like this.”

“When you reach one billion and you want to grow 30%, you have majority of revenue need to come from existing customers.”

“I'm not seeing the type of just tire kicking that I saw a year ago. I'm not seeing it. I'm not. Maybe other people with broader portfolios will tell you different. That's what worries me. I don't know. We're waiting for P to bail us out. Right. Forget about th…”

“For me, the triple triple double double, I'm totally into it if the CEO is amazing.”

“In other words, do I think the outcomes of these companies can be huge? And arguably even bigger than some of the SaaS companies. Yes. So quote, the upside is there.”

“What I worry is, is just that when there's so much competition, I think everyone's going to be less durable. It's not your ten-year-old SaaS company that is seeing less durability. I think everyone, I think this is new, this less durable revenue”

“I remember looking at churn in SaaS companies, and the number one predictor of retention was the number of integrations.”

“If you've gone on to hospice care, does it really matter how long you stay in hospice? I mean, to the kid, to the employees, it does to the family, but everybody pretty much knows when that SAS company goes into hospice, it ain't coming out.”

“You're going to go out of business and you're not going to fail because your customers are going to renew, but your growth is going to fall so far that you become irrelevant in two years.”

“Because if you don't bring this out, you're going to trade at eight times EBITDA, which at best is two or three times revenues, and it's going to be pretty Frickin unsatisfactory for the people who paid 30 times.”

“The odd thing is this is precisely when you should be hiring young people who are coming in replete with the knowledge and unencumbered by priors. So maybe all those unemployed computer science, but maybe some of them, maybe in some of these SAS comes genuine …”

“What they've done is they've said for three years, I thought it was temporary, and now I recognize it's permanent, and now I'm going to value based on this growth rate, take a hit off you for technical obsolescence and the terminal value, take another hit off …”

“Because if you're not lovable, I think the end is near for a lot of companies that are only purely focused only on just Pure functional ability of the products.”

“But I think even though the SaaS apocalypse is behind us I think for many, there is still a worry, the terminal value is zero. I don't think that fear has gone away. If you're, if you keep decelerating, While budget is accelerating everywhere around you.”

“Yeah, I think they're going to have to, like, every SaaS company that, that is a per seat is having the conversation right now of how do they introduce Some sort of consumption into their pricing model, because there's risk that, you know, companies have less …”

“I think that's kind of a thing now with all SaaS companies, right, where the multipulse went to shit, and I think a lot of it is, is because the market don't know how to calculate the danger for SaaS companies with AI”

“I'd say 90% of companies don't do that as a first step. Before you spend your first cent, have everything set up.”

“And as co-work becomes, you know, more successful and more stable and more broadly used, I would be really concerned about SaaS companies that don't have some kind of system of record or some kind of AI strategy in place to succeed. Because the co-work era, it…”