Workshop Wednesday: The New Era of HyperFunctional SaaS
0 likes•230 views
The document discusses the new era of hyperfunctional SaaS, highlighting strong growth in cloud and AI sectors while pointing out challenges faced by certain companies. It emphasizes increased customer expectations for functionality, automation, and product efficiency driven by AI advancements, suggesting a shift away from single-product solutions. The document warns that while expectations have risen, many companies are struggling to keep up, indicating a possible restructuring of the SaaS landscape.
Workshop Wednesday: The New Era of HyperFunctional SaaS
- 1. The Bar Has Gone Up. The New Era of HyperFunctional SaaS. Jason Lemkin Founder & CEO SaaStr
- 2. Sorry -- But There’s No Downturn. It’s A New Normal. Good Times: ● Cloud spend +20% ● Non-Tech Use Cases Strong ○ Toast +29% at $1.5B ARR ○ Monday +34% at $1B ARR ○ Shopify +21% at $8B ARR ○ Klaviyo + 35% at $900m ARR ○ Samsara +36% at $1.26B ARR ● AI Strong ○ Google Cloud +29% at $10B ARR ○ Azure +30% at $81B ARR ○ GitLab +30% at $730m ARR ● Security + Compliance Strong ○ Crowdstrike +34% at $4B ARR ○ Rubrik +35% at $920m ARR ○ OneStream IPO +37% at $500m Challenges: ● Salesforce +9% ● Mongo +13% ● Elastic +18% ● Asana +10% ☀ 🌧
- 3. 2024-2029: The New Era of Hyperfunctional SaaS ● AI Now Table Stakes. ● And Product Has to Much Better For It. ● Radical Efficiency, At Least Post-IPO ● Automation Everywhere ● Multiproduct The New Normal ● Customers Demanding Much More Than a 10x Point Solution
- 4. AI Is a Force of Nature. It’s Also … Table Stakes in SaaS A ton more work, a ton more functionality, in the end probably for the same ACV. Oh and yeah -- all the competition is doing it as well. It’s harder. Cry me a river.
- 5. The Bar To a Truly Great Product Is Way, Way Up Customers expecting: ● to replace 30%-50% of workforce with AI ● all unstructured data to now be instantly structured and searchable ● every product to work in a plain english prompt ● even complex onboarding to be fully automated ● core platforms to do the work of 20 add-ons and point solutions And they are being promised this. Often over-promised, but still. AI has taught everyone this is “easy”. Customers now demanding it.
- 6. Radical Efficiency Is The New Normal This means even more product with fewer resources The New Normal: 20%+ Margins at $1B ARR The New Normal: 700 FTEs at $200m ARR
- 7. Automation Everywhere Workflow + dashboard aren’t enough AI is Automation on Steroids Much of the enterprise (and SMB) AI spend is on automation 3.0 The AI Bubble may pop (AI spending like in SaaS in 2021) -- but customer expectations are forever changed
- 8. MultiProduct is Now the Norm. Gotta Start Much Earlier. So many at $50m, $100m, $200m ARR are now seeing growth slow to < 20%. And net new customers often close 0% Why? They’re still really Single Product Might quietly be Issue #1 across SaaS today
- 9. Death of the Point Solution? Maybe, maybe not. But seems like it. Leading vendors all doing more and more. At a minimum, you have to step it up at least to scale. Customers are expecting HyperFunctionality
- 10. AI = Point Solution Explosion Now 100x more vendors in some spaces than 18 months ago They are promising 10x or better functionality via AI
- 11. Who Will Do The Work? Founders as driven as ever … but what about the rest? Do most of the rest really want to do the work of a startup? A challenge for all of us 4 of 813 raised their hand …
- 13. Q+A