Mar 18, 2020 · 59m · saastr
Webinar: What It Was Like in '08-'09. And We Can Learn for '20.
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
SaaStr founder Jason Lemkin and Gainsight CEO Nick Mehta examine the impact of economic downturns on SaaS businesses, drawing operational lessons from the 2008–2009 financial crisis. They outline actionable strategies for multi-scenario forecasting, reallocating sales capacity to customer retention, and maintaining transparent, empathetic team leadership.
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 52.3% of the talking time here. How this is scored →
Jason as informed peer 6.1 Guest teaching 3.4 Guest disagreement 0.3 Jason pushing back 0.5
speaking balance: gold is Jason, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 6:25 Challenging denial around business slowdowns
Nick pushes back against optimistic executives claiming immunity to the downturn, asserting that anyone expecting under a 20% to 50% hit is simply not accounting for upstream exposure.
Hardest push from Jason ▶ 18:59 Pushing back on rushed financial reforecastingJason pushes back against immediate over-reaction in forecasts, arguing that leaders need two additional weeks of hard operational data before locking in long-term models.
Biggest teaching moment ▶ 28:03 Product telemetry revealing widespread SaaS adoption surgeNick educates the audience and host on empirical telemetry from Gainsight PX, proving that software usage grew across hundreds of SaaS apps immediately following remote-work shifts.
Jason holds their own ▶ 49:50 Firsthand 2008 financial collapse case studyJason demonstrates deep historical expertise by sharing data from EchoSign alongside his personal experience managing cash during the 2008 banking collapse.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Jason as informed peer | Guest teaching | Guest disagreement | Jason pushing back | Why |
|---|---|---|---|---|---|---|
| Assessing Market Slowdowns and Second-Order Economic Effects | 5 | 4 | 1 | 1 | Jason opens the discussion with preliminary Twitter survey data regarding deal slowdowns. Nick elaborates on the second-order ripple effects that travel from frontline service industries into downstream tech providers. | |
| Re-Forecasting 2020 and Adjusting Sales Expectations | 5 | 4 | 0 | 1 | Nick explains the disparity between new logo acquisition freezes and existing account maintenance using an analogy about car purchases versus car washes. Jason validates this perspective and highlights the strategic value of conducting discovery sessions during purchasing lulls. | |
| Flexing Resources and Repurposing Sales for Customer Retention | 6 | 3 | 0 | 0 | Jason suggests redeploying excess sales reps into customer retention roles, which Nick expands upon with specific renewal SPIF compensation structures. Both founders compare operational adaptations, including moving to wartime footing and setting up daily team connection calls. | |
| Venture Capital Sentiment and Realities of Fundraising | 7 | 2 | 1 | 1 | Jason provides an analysis of venture capital behavior, forecasting a 50% reduction in funded companies as partner meetings focus heavily on portfolio triage. Nick agrees and contrasts top-tier funds that double down during downturns against smaller funds facing LP pressure. | |
| SaaS Adoption Surges and the Digital Transformation Catalyst | 6 | 5 | 0 | 0 | Nick shares platform telemetry from Gainsight PX demonstrating a 50% surge in user engagement across SaaS applications during the shift to remote work. Jason connects this usage increase to logo retention and recommends offering complimentary services to drive long-term adoption. | |
| Enterprise vs. SMB Dynamics and Vertical Disparities | 7 | 3 | 0 | 1 | Nick and Jason contrast enterprise contract resilience against volatile SMB cancellation cycles. Jason introduces the thesis that sales cycle duration correlates directly with the lag time in customer churn. | |
| Lessons from 2008–2009: Inbound Leads and Recurring Revenue Floors | 8 | 2 | 0 | 0 | Jason walks through historical EchoSign charts from 2008-2009 demonstrating sustained lead volumes and upgrades despite a broader economic collapse, alongside a 12% revenue growth floor in public SaaS. He also recounts his experience receiving a 90-minute deadline to withdraw funds from Citibank during the financial crisis. | |
| Five Positive Leadership Principles for SaaS Founders | 5 | 4 | 0 | 0 | Nick shares his five core positive leadership principles for SaaS executives navigating economic disruption, emphasizing gratitude, intense execution, and maintaining team morale. Jason touches on executive transparency regarding runway and financial modeling before concluding. |
Statements from this episode (12)
Mehta: Every business will face a 20% to 90% new sales slowdown
“I think the bottom line of all of this is everyone's going to be affected, particularly in new sales, and we'll talk about retention as well, but your question here is about deals. I think every business is going to be affected, and whether that's a 20% slowdo…”
Mehta: In a downturn, assume peer executives are cutting budgets simultaneously
“As one principle I was going to share is I think one thing that's reasonable for you to think about as a CEO, founder, executive is whatever you're doing, everyone else is doing or more. So if you have your spreadsheet open of your budget and you're like, what…”
Lemkin: 80% of surveyed SaaS companies have started re-forecasting for 2020
“20% haven't changed which may be appropriate, right? If you sell into certain industries, maybe today is not the right time to totally be forecast. And 80% have begun some level of re-forecasting.”
Mehta: Gainsight Q1 forecast stayed steady due to lag effect
“Our forecast for our Q one, which ends in April looks quite similar to where we were a few weeks ago. But I think that's a bit of a lag effect, right?”
Mehta: SaaS sales forecasts will suffer far worse than retention
“So I believe that your retention forecast will be hit, because some of your customers will go out of business, and some will hit budget troubles, but your sales forecast will probably hit significantly more than retention.”
Mehta: Use renewal SPIFs rather than overhaul core sales comp plans
“A SPF is kind of an incentive on top of the core plan to help people kind of redirect their activities. And so there's an opportunity to have a SPF around renewals particularly for your focused accounts, like maybe pick a list of the 20 renewals that you could…”
Lemkin: Founders should model a 50% drop in VC deals and funding
“I think for founders and other folks that are on this, I would model today, 50% decline in the number of companies that get funded and 50% decline in the dollars that go out there.”
Lemkin: Do not confuse easy VC Zoom discovery calls with closable deals
“I'm personally not that interested in discovery, but folks that want to learn a lot, they'll take Zooms and meetings they might not always have time for, and that does not mean that that that deal has a high chance of closing. So there's almost strain, can be …”
Lemkin: A 50% SaaS usage spike strongly predicts logo retention
“I strongly suspect that if you're seeing 50% increase in your customer's monthly act, daily, hourly users, if you have this, you may not be able to tomorrow get a whole bunch more seats, right? Not only because you may not be, you have utility pricing, but als…”
Lemkin: SaaS sales cycles and churn rates are highly correlated
“Sales cycles and churn rates are highly correlated.”