Feb 2, 2024 · 28m · saastr
2025 State of SaaS: Trends and Predictions with SaaStr CEO and Founder, Jason Lemkin
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this keynote presentation, SaaStr founder Jason Lemkin breaks down the structural transformation of the post-2024 SaaS industry, urging founders to reset organizational expectations, abandon artificial retention-driven growth, and build disciplined, lean companies focused on genuine new customer acquisition.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Jason holds 99.4% of the talking time here. How this is scored →
Jason as informed peer 7.8 Guest teaching 0.0 Guest disagreement 0.1 Jason pushing back 0.1
speaking balance: gold is Jason, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 18:28 Audience callout on Slack vs. Yammer
An audience member playfully interjects a comment during Jason's discussion on painkiller versus vitamin SaaS products.
Hardest push from Jason ▶ 18:30 Jason clarifying the vitamin vs painkiller distinctionJason pushes past audience callouts to clarify why even 'vitamin' products grew to massive scale during previous SaaS market cycles.
Biggest teaching moment ▶ 18:07 Audience finishing the phrase 'Pain killing'An audience member supplies the phrase 'Pain killing' when Jason pauses to recall the exact industry terminology.
Jason holds their own ▶ 3:15 Jason breaking down the 700-employee / $200M ARR efficiency mathJason authoritatively demonstrates SaaS efficiency economics by breaking down the revenue-per-employee ratios across his portfolio companies and public comps.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Jason as informed peer | Guest teaching | Guest disagreement | Jason pushing back | Why |
|---|---|---|---|---|---|---|
| The 2020 to 2024 SaaS Rollercoaster and Industry Reset | 7 | 0 | 0 | 0 | Jason delivers an opening keynote detailing the whiplash of the SaaS cycle from 2020 through 2024. The audience member only provides a brief introductory greeting with no pushback or debate. | |
| Defining Real SaaS Efficiency and Headcount Math | 8 | 0 | 0 | 0 | Jason shares precise math from his own portfolio investments and public SaaS benchmarks, demonstrating how headcount must scale relative to ARR (approaching $300k revenue per employee). | |
| Addressing Burnout and the Lost Generation of Talent | 8 | 0 | 0 | 0 | Jason draws on data from interviewing over 50 VPs of sales and 40 CS leaders to diagnose a 'lost generation' of burned-out executives unwilling to perform frontline work. | |
| Decacorn Market Distortions and Sales Compensation Challenges | 8 | 0 | 0 | 0 | Jason cites Eileen Lee's data on unicorns and Gartner's $1T cloud spend forecast to illustrate how decacorns like OpenAI distort compensation benchmarks and expectations for standard startups. | |
| AI Support Automation and Death of the Generalist | 7 | 0 | 0 | 0 | Jason discusses the push toward automating 50% of support interactions with AI and explains why the generalist role in CS is rapidly disappearing as CS becomes weaponized for expansion. | |
| Navigating an Uneven Downturn and Macro Cloud Expansion | 8 | 0 | 1 | 1 | Jason references public market data from Jamin Ball and Gartner to show that the downturn is unevenly distributed across SaaS. The audience member briefly chimes in with call-and-response answers. | |
| Confronting Product-Market Fit Loss and Rebuilding Competitiveness | 8 | 0 | 0 | 0 | Jason gives candid strategic guidance to founders on recognizing when a product has fallen out of product-market fit, using Fastly's NRR dynamics and portfolio examples as case studies. | |
| Multiple Compression, Marketing Inefficiency, and Avoiding NRR Zombie Mode | 8 | 0 | 0 | 0 | Jason analyzes multiple compression at 6x ARR and Benchmarks data showing that sales and marketing efficiency worsened despite layoffs, warning founders against becoming 'NRR zombies'. |
Statements from this episode (19)
Lemkin: 2021 saw the creation of roughly 600 unicorns
“2021 comes in and somehow we have 600 unicorns.”
Lemkin: SaaS companies forced unearned price increases on customers in 2023
“Everyone raised prices, even though they didn't often, usually they didn't earn it. They jammed price increases down customers throats.”
Lemkin: $200M ARR SaaS startups converge at 700 headcount and breakeven
“Turns out in 20, 24, they're all, these three and a half companies, 200, they're all exactly the same. They're all breakeven, and they'll have 700 employees. Break even and set all of them.”
Lemkin: Average Public SaaS Company Generates Over $300k Per Employee
“If you look at the average public SaaS company, they're the most efficient they've ever been in the history of SaaS. The average public SaaS company is now above 303 100,000 per employee.”
Lemkin: Brex Laid Off 20% at $250M–$300M in Revenue
“And that's why even great companies like Brex just announced they had to lay off 20% at 253 hundred million in revenue.”
Lemkin: 40 of 50 VP Sales Candidates Refused Direct Selling
“I interviewed over 50 VPs of sales last year, both corporal companies and myself. 40 of them were not willing to do sales themselves anymore. Only 10 of them were willing.”
Lemkin: Majority of CS Candidates Refuse to Talk to Customers
“I interviewed almost 40 CS people last year. The majority of them are not willing to talk to customers anymore.”
Lemkin: No Enterprise Customer Needs Another SaaS Product
“No one on planet Earth needs another SaaS product. They don't. Every company out there, all the Fortune 500 and Global 2000, they seem to work just fine. With whatever CRM, or marketing automation, or ABM, or whatever tool, they work just fine. They don't need…”
Lemkin: OpenAI conducts annual tender offers paying engineers millions
“OpenAI for engineers does tender offers every year, where you make millions of dollars a year from working in Open.”
Lemkin: Decacorns will bifurcate SaaS and distort hiring expectations
“Now we're going to live in this bifurcated world where there's going to be whispers of folks working at Decacorns, and Decacorns, there'll be more snowflakes, and there'll be more ideas, and it's going to put a lot of pressure on the rest of us, because people…”
Lemkin: SaaS companies aim to automate at least 50% of customer interactions
“The real number everyone's trying to get to in the industry, and you can see it on things like the homepage of Intercom, is folks are trying to automate at least half of customer interactions. That's the goal across, if you talk to folks that are in support or…”
Lemkin: Integrating CS into sales weaponized teams and damaged customer relationships
“Now that CS became part of sales, CS became weaponized. CS became weaponized. CS's goal was to get blood out of the base last year. And it destroyed the relationship.”
Lemkin: The era of SaaS customer success generalists is likely over
“I just don't think that there's any great generalist role. There's no great role for, hey, I'm a generalist. I'm going to go into CS or support and just make customers happy. I'm worried this is gone. I'm worried the era of this generalist making customers hap…”
Lemkin: ZoomInfo's annual growth collapsed from 59% to 9% in one year
“ZoomInfo, ZoomInfo went from 59% growth last year to nine percent in one year.”
Lemkin: Many founders will quit in 2024 after losing product-market fit
“And I know it's tough, and a lot of founders are going to quit this year. A lot of founders are going to quit this year, not because they're out of money, but because they fell out of product market fit, right?”
Lemkin: A startup with $8M cash is selling for pennies
“I had a company that I invested in, eight million in the bank, Couple million in revenue. Almost no burden. They're selling their company for pennies on the dollar.”
Lemkin: SaaS companies must rebuild themselves every five years
“Like, even in the good times, you have, you fall, you're constantly slowly falling out of product market fit, even in good times. And you have to rebuild yourself every five years in good times.”
Lemkin: Invested heavily in public software stocks, believes they are 20-30% undervalued
“In fact, I put quite a bit of money for the first time ever into public stocks because I believe it. I believe they are undervalued by 20 to 30%.”
Lemkin: Public SaaS profitability gains came from leaning on customer base, not sales efficiency
“Every single public company is radically more efficient than 18 months ago. They all were unprofitable, and now they're profitable, just cash flow positive, or positive operating margins. But we didn't get better at sales and marketing. We just leaned on our b…”