Janis Zech

The SaaS industry is still growing. But much more slowly. Last month I shared an Aleph statistic. Over the last 3 years we have invested in 17 companies. Only 1 out 17 was a classic horizontal SaaS company. SaaS was the single best business model of the last cycle (2008-2021), but the category has since entered a maturity stage (see graph below). This new report from the wonderful software team at Avenir clearly illustrates it. Growth rates for the combined SaaS industry are quickly declining as we are entering the later stages of maturity. In other words, there’s already an established software company in most sectors - and there’s very little room for entirely new software categories. At Aleph we still believe there’s an opportunity to build successful SaaS companies, but new entrants would have to carve out market share in existing industries and displace existing vendors. Vertical software is one area where lesser competition makes it more attractive, but entrepreneurs in crowded horizontal markets would have to work harder than ever before. Another key takeaway from the report - there are only 72 publicly traded companies (with market cap > $5Bn) with a combined market cap of $5.8Tr. However, 56% of this value is attributed to Microsoft alone, followed by a very long tail of lesser performing companies. Moreover, only 2 of the largest 11 companies were funded after the year 2000 (ServiceNow, CrowdStrike). If you are building or investing in SaaS, you should definitely read the full report by Jared Sleeper, Hannah Bao and David Prilutsky (link in the first comment).

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It's ironic that this great piece surfaced in my inbox today by Christoph Janz. https://lnkd.in/dHP6KNQ7 Firstly, he highlights one of the best vertical SAAS companies built right here in Canada - I remember when Alex Norman first highlighted them in our TechTo community. You can build anywhere. Secondly, building in vertical SAAS is more nuanced. You can build revenues YOY but when you're going for structural change in an industry there it's more like figuring out a Rubix cube. Yes, you can release features that drive revenue but they may not contribute to building out a MOAT. Lastly, I fully agree that TAM is often misunderstood. Your product roadmap eventually expands horizontally within that vertical space, and I see this in the product I am building in VARAi.

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What everyone needs to know about First-Touch and Last-Touch attribution models: 👇 👇 👇 In a recent internal experiment at SegmentStream, we set out to compare first-touch and last-touch attribution with several of our major accounts. About 10 years ago, you would see a significant difference between these two attributions. With first-touch, you attribute all the value to the initial discovery of your brand by the client, and with last-touch, the credit goes to the final interaction before a conversion. However, when we compared first-touch to last-touch recently, we barely saw any difference. Nowadays, the customer journey is fragmented across devices, browsers, and cookies, which often expire quickly. Additionally, many users are in private mode or reject cookies altogether. We found that usually, there is only one paid interaction per device, browser, and cookie, resulting in a minimal difference—something between 1 to 2%. This was quite surprising and funny to see. What you need to know about attribution right now is that it’s completely useless if you have a long consideration period. If you have a long consideration period, most probably you invest in mid funnel and upper funnel, so long consideration period means that between seeing your ad for the first time and making a purchase, some significant time should pass, usually more than one session, because if it's even two days, sometimes it's already a long consideration cycle and in many cases, it may already lead to a fragmented customer journey. #segmentstream #attribution #analytics

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Brilliant! VCs in the US vs. VCs in Europe 👏😂 "You know what they put on a term sheet in Germany instead of flexible terms? Term sheets signed by notaries. They drown startups with that". Couldn't have said it better myself. Funny & sad at the same time 🥲 h/t Daniel Olmedo Nieto P.S. for more great stuff, check out 🔔linas.substack.com🔔, it's the only newsletter you need for all things when Finance meets Technology. For founders, builders, and leaders.

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Summary of conversations at conferences about AI in commercial functions: Person a: what are you using AI for in your business? Person b: 🤷‍♂️ we tried to make a super cool predictive model but our data was too dirty. Also our revops team was understaffed. I did ask ChatGPT4 to make me a list of restaurants to visit at this conference. Person c: that’s weird, I asked it to make me a picture this morning Person a: 🙋‍♂️ still wondering….what are you using it for in your business again? I believe that AI will ultimately be really helpful to many different business functions. We’re in the very early innings, though.

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Is the SaaS market on the verge of a rebound? In the past, quarterly earnings from cloud/infrastructure providers have been a good proxy for enterprise buying patterns. Therefore, they are also an indicator for what's going to happen in the overall SaaS market. Amazon's AWS figures are still pending (will be presented today). But both Microsoft and Google have already released their earnings for the cloud business - and they look quite promising: Microsoft Azure: 31% yoy vs. 28% in previous quarter Google Cloud Platform: 28% yoy vs. 26% in previous quarter Especially in the last 12+ months, resource-intensive AI applications are driving up the numbers which leads to a slight distortion. Still, I believe we can be slightly optimistic. Even if we exclude AI services, as Jamin Ball from Altimeter has tried to do in this chart, it looks like we can expect a recovery. What do you think? Just a brief glimmer of hope or a real trend reversal? #saas #startups #growth #microsoft #azure #google #cloud #amazon #aws #earnings

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💡 The Power of Customer-Led Growth in Vertical SaaS In the world of vertical SaaS, we at Frontier Growth believe there’s more than one path to scaling effectively. While product-led and sales-led growth are often spotlighted, customer-led growth can be a game-changer. But how do you create a flywheel of customer advocacy & referrals? For our portfolio company Jane App, an all-in-one practice management software solution for allied health and wellness clinics, the answer lies in their mission of "Helping the Helpers" and their corresponding customer-centric GTM philosophy: Be Found 👀, Be Chosen ✅, Be Loved 🌟. 👀 Be Found: Jane delights its customers with a modern and beautifully designed platform, exceptional service, and a steady stream of new features that meet evolving customer needs. By fostering a loyal community eager to share their experiences, Jane ensures its story resonates with its target practitioner audience, optimizing Message Market Fit 🔍 and driving broad awareness of its platform. ✅ Be Chosen: By offering intuitive design, tailored features, and fair pricing, Jane excels at delivering Pricing Market Fit ⚖️. This clarity ensures that Jane’s value proposition aligns with its customers’ needs and budgets, making it the clear choice for health and wellness clinics. 🌟 Be Loved: By continuously innovating and prioritizing customer success, Jane excels at consistently delivering strong Product Market Fit 🎯 for its customers. Through ensuring its product consistently exceeds customer expectations, Jane inspires customers to advocate on its behalf, creating a virtuous cycle of growth through a robust customer referral loop. By optimizing for Message Market Fit 🔍, Pricing Market Fit ⚖️, and Product Market Fit 🎯, Jane excels at facilitating Customer-Led Growth and sets a powerful example of what’s possible with respect to vertical SaaS growth strategies. At Frontier Growth, we’re proud to partner with VSaaS companies like Jane that successfully grow by putting their customers first. To learn more about Jane: https://jane.app For more on Frontier Growth - Growth Equity Partner for Vertical SaaS: https://frontiergrowth.com #VerticalSaaS #VSaaS #CustomerLedGrowth #JaneApp #PracticeManagement #AlliedHealth #FrontierGrowth

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Product-led growth (PLG) in SaaS sounds simple, but it’s much harder than it looks to succeed and grow faster with the product doing most of the GTM work. Product-led growth is not new in software, but PLG is new. There have always been business apps that created viral spreading with freemium products or free trials. But PLG is now the well-documented try-before-you-buy approach in which the product itself drives awareness, engagement, and conversion in a deliberate and strategic way. Classic PLG winners include Slack, Dropbox, Zoom, Canva, Github, and Calendly. These are typically simpler software that provides users with value quickly. It’s the opposite of sales-led growth when salespeople drag you through a demo before you get to play with the product. Wes Bush is CEO of ProductLed, a coaching and education company that has helped almost 500 serious SaaS founders to succeed with product-led growth strategies and tactics such as freemium products and free trials. Wes has written two successful books, including "Product-Led Growth" and "The Product-Led Playbook," which describe key concepts, frameworks, approaches, and useful examples for SaaS founders. Wes shared the most common pitfalls and misperceptions that prevent PLG success this week on the Practical Founders Podcast. He also puts his finger on the real goal of PLG for the user: "The PLG model you choose doesn't matter. Not a bit. Freemium, free trial, credit card up front, whatever. You can make any of those work. That's not the question. What matters in PLG is the actual outcome that we hope somebody will get from our product-led experience. "Does your free motion actually have a transformation in it where they can feel they will grow bigger, save time, and do cool stuff? Because if you don't have that, it's literally just, 'Hey, look around, see for yourself, see what you can do in this product.' That's not real value. "There has to be tangible value for the user before they ever consider buying. What is your PLG outcome that creates that transformation for the user? “That's what customers want when they buy software now--Show me value first before I think about buying from you." PLG is working for more and more SaaS companies every year, but it isn't for every software company. In this expert episode, Wes shares his expertise for SaaS founders on these important topics: - Defining product-led growth - Transitioning from sales-led to product-led - Common mistakes in product-led growth - Identifying challenges and solutions for user experience - Pricing strategies in product-led growth - The future of product-led growth in SaaS Check out this informative interview with Wes Bush of ProductLed on the Practical Founders Podcast at https://lnkd.in/gxKfYCHa. #practicalfounders

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The GTM Podcast is now a top 1% podcast out of 3,363,892 podcasts globally. Here are the top 10 episodes (by # of downloads): 1. The Pioneer of Account Based Sales Development with Lars Nilsson, former SVP of Global SD at Snowflake 2. Resilience is Your Willpower with Anna Baird, former CRO of Outreach 3. How Stripe Supercharged their SMB Team with Meka Asonye, Partner at First Round Capital 4. Weekly Active Users up by 33% by Making the Hard Decisions Faster with Melanie Fellay 🐙, CEO of Spekit 5. The Real/Raw Version of Selling a Start-Up with Eli Rubel, CEO of Matter Made/NoBoringDesign 6. Contagious B2B Messaging Mastery with Dave Gerhardt, CEO of Exitfive 7. 261% More Likely to Trust a Company when their Founders are Posting on Linkedin with Samantha McKenna, CEO/Founder of #samsales 8. Consultative Selling and The Positive Snowball Effect of Building Strong Relationships with Zach Lawryk, Head of Solution Engineering at OpenAI 9. Klaviyo's Blueprint for Sales Success for $25M-$450M+ Growth with Sean Marshall, former SVP of Global Sales at Klaviyo. 10. The Revenue Viking Shares his Competitive Edge & Winning Culture Tactics with Mark Cranney, CRO at LVT A huge thank-you to all of our guests and listeners. And if you haven't check out the pod, the above episodes are a great place to start. We'll continue to share real stories from real operators who are still in the trenches making things happen. Here's to the next million downloads...just getting started. 🎙

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10 Lessons in building a $150m ARR SaaS business within 8 years Whilst also investing in over 200 SaaS Companies The Go to Market Handbook for B2B SaaS Leaders 🎯 I had the chance to be Interviewed by Rubén Domínguez Ibar with my Co-Author Richard Blundell about our straight-to-the-point WorkBook for SaaS Leaders. Stoked to be in my favourite Newsletter The VC Corner 💙 The Go-to-Market Handbook for B2B SaaS Leaders pulls from our decades of experience founding, scaling & investing in companies. I invest in a new company every week, in fact 2 this week 😉 A few things Founders & CEOs are making a killing on from the Book: • 𝗨𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱 𝘁𝗵𝗲 𝗰𝘂𝘀𝘁𝗼𝗺𝗲𝗿’𝘀 𝗽𝗮𝗶𝗻 💡—if you’re not crystal clear on this, you’re missing the mark. The proposition will miss the most valuable buyers.. ⬇ 💲 • 𝗚𝗼 𝘀𝗹𝗼𝘄 𝘁𝗼 𝗴𝗼 𝗳𝗮𝘀𝘁 ⏳—strategic, deliberate steps will get you further than rushing. Why 80% of Start Ups never find Product Market Fit... ⬇ 💲 • 𝗨𝗻𝗹𝗼𝗰𝗸 𝗵𝗶𝗱𝗱𝗲𝗻 𝗿𝗲𝘃𝗲𝗻𝘂𝗲 💰—pricing and packaging aren’t afterthoughts, they’re growth drivers. Price for the Entire Lifecycle to get richer... ⬆ 💰 For SaaS Founders & Leaders trying to nail product-market fit or scale efficiently, this interview is a must-read👇 https://lnkd.in/e-3uaGB9

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Great read by Surojit Chatterjee from Ema Unlimited on a very important (and hotly debated) topic: why be bullish on agentic AI upstarts when several SaaS behemoths already dominate enterprise software and are rapidly incorporating AI themselves? https://lnkd.in/gMUEarJi

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Trying to get from $0 to $1M ARR? Find your PMF. Obsess over identifying a problem that a big enough market urgently needs solving. Talk to your customers about their most painful problems and validate your assumptions. Not all feedback will be valuable. Focus on insights from your early adopters—they become your ICP and shape your product. Stay true to your core customer profile. Chasing revenue or artificially widening the PMF dilutes your product's effectiveness. Your product can only meet so many needs. Tailor every feature to your ICP. Your first version is your Minimum Sellable Product (MSP). Make the MSP easy to use and beneficial. With customers using your product, continually collect feedback to improve: 1 - Offering 2 - Marketing messages 3 - Sales calls 4 - Pricing structure 5 - Demo flow If you reach $1M ARR, congratulations! Your product has real demand. Next, it’s time to think about scaling to $10M ARR. More on that soon.

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My saas.wtf newsletter just cracked the 2,500 subscriber mark. 🎉 These were the 5 most popular articles: 1️⃣ My Go-To SaaS Benchmark Reports: https://lnkd.in/eVwEqJPj 2️⃣ SaaS Valuation Myths: https://lnkd.in/e2sA_Bgn 3️⃣ Time to hit $1M ARR: https://lnkd.in/emmyt-Hy 4️⃣ Micro M&A for SaaS Startups: https://lnkd.in/e5sCK2mB 5️⃣ Cohort Analysis using AI: https://lnkd.in/ebAxhdma I hope you enjoyed the others too. 🙂 On to the next 2500 subs! #saas #startups #founders #kpi #analysis #valuation #ai #benchmarks #pricing #newsletter

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How can Revenue leaders prepare for the CEO's job? As someone who transitioned from the CRO to CEO role not too long ago, my journey in the new seat has been replete with "before-after" perspectives. A lot of what seemed obvious as a CRO makes no practical sense as a CEO and vice versa. It's been a process of deep self-discovery, daily learnings, and adjustments. Here are some learnings that have felt profound: 1. You've got to develop an organizational thesis that goes beyond revenue growth - Going from $20M to $100M ARR in 5 years isn't an organizational thesis. That thesis needs to live at the intersection of product vision, customer base, culture, and growth/profit, and something everyone can relate to. 2. P&L-based decision making requires a different set of muscles from topline-focused decision-making. There will be situations where the topline isn't even a consideration. Master the science & art of P&L!     3. The boring stuff is really important - Compliance, legal, and back-office isn't something a Revenue leader would think a lot about outside customer contracts. As a CEO, if that isn't sorted, you'll have sleepless nights.   4. Surrounding yourself with people with complementary skills is key to job effectiveness - Product, Engineering & back-office are three obvious domains where you want experts informing your decisions, AND you still need to learn the "first principles" guiding each function. 5. Just because you've sold tech does not mean you understand how tech is built and run - acknowledging and bridging the gap is critical to managing the R&D function. 6. Not every department moves at the same pace, and that's by design - High velocity & intensity may create momentum in one department and may have the exact opposite effect in another. 7. You've got to communicate something 7 times for it to truly land with the entire company across all departments - Yes, that's the number!     8. A high-octane, high-energy talk may motivate the sales team but may shut down another team. Finding the right tone & language is key to team motivation. 9. Your team may have closed 3 high ACV deals in a day, and you may still be having a tough day in the office. Remember, Sales is just one of the 7-8 functions you are now responsible for.     10. Don't ignore your craft—keep polishing it. If you crushed it as a CRO, those skills may come in more handy than ever before, especially now with a more well-rounded organizational perspective.     11. You are responsible for people's livelihoods, and the weight of that responsibility is something you've likely not experienced before. Ultimately it's about the people! The key to navigating the transition is finding your trusted confidant—that could be your PE/VC partner, a Board member, or someone on your leadership team. Someone who gets the big picture and your role in it all. Someone who will help you identify and fix your blind spots (you'll have plenty!).

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Where is the value in AI? Yesterday I had a chance to discuss the impact of AI in tech companies and the rise of "AI native" players. Let´s take SaaS for example: AI is re-norming tech financing, but not in the way many expected. --> Early predictions suggested that existing SaaS giants would retain their edge, with access to foundational AI models and distribution channels. However, as AI-native solutions evolve, they are redefining what it means to compete. --> SaaS companies are experiencing a significant slow down in financing but they are still growing. The question is for how long. Are they ready for this shift, or are we underestimating the impact of being "AI-native"? #AI #SaaS #FutureOfWork

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Big and exciting news about our #Launch and #funding! 🤩 🚀 Super happy to share that we've been featured on AdExchanger, announcing Fibr's Web Pilot launch together with our pre-seed funding by Accel, 2am VC and other prominent angel investors (listed below). At Fibr, we are all set to revolutionise marketing by addressing the post-cookie CAC challenges marketers face. Our AI-driven platform creates 1:1 personalized landing pages for every ad, audience, location etc, enhancing user experience and driving higher conversion rates. Being marketers ourselves, we get it. We want every marketer, big or small, to have access to powerful AI-personalization tools without breaking the bank. Our idea is simple: technology should work for marketers, not the other way around. As we continue to grow and innovate, we’re super excited to expand our team across US and India for Product Marketing, Inside Sales, Tech etc to support our vision. #hiring If you're passionate about Martech, AI or want to work with a A+ team, please reach out to me directly or write at [email protected] - Subject [Role, Hiring] A big thanks to our incredible team and supporters, and special thanks to Victoria McNally for featuring us! 🙌 Read the full news here https://lnkd.in/gS_3hmy7 Special thanks to Yamini Bhat Kunal Shah Rishi Khanna Abhishek Rungta Varun Kapoor Neeraj Biyani Aniketh Jain Pawan Gupta Saurabh Aggarwal Prashant Sachan Akhilesh Agarwal Vishal Gupta Sushmita R. Manu Chandra Abhinav Jain Akhil Bhiwal Dhyanesh Shah Mrinalini Arora Siddharth Sirigeri Archana Priyadarshini Abhishek Mittal Swarandeep Singh Kambo Kushal Sharma Faiz Mayalakkara, FCA Revant Bhate Ajay Agrawal Brendan Rogers Hershel Mehta Prayank Swaroop Tanay Jagani Chitranjan Jain Chirag Meswani and many others who have addded tremendous value to us and have been super supportive in our journey so far. CC: Pritam Roy #AdExchanger #DigitalMarketing #Personalization #FundRaise #Startups #MarketingSolutions #AIforMarketing #MarTech

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Many AI-Native SaaS companies are taking too much of an opinionated approach to workflows for enterprises It's making it more challenging to get companies to buy and successfully implement. Instead of trying to build a "one size fits all" solution, here’s three approaches I’ve seen work incredibly well when going after the enterprise: 1. Start with a low-code/no-code custom workflow builder and layer on AI Features A company like Fuse Finance is making it super easy for lenders, credit unions and community banks to adopt as they have a customizable UI with agentic tools being built on top that deliver clear ROI in many ways. Unlike a customers current software, which require tons of engineering time to make any changes (which most banks don't have the resources for), Fuse now makes it 10X easier to make any changes to the process while still harnessing the power of AI. Companies with custom workflow builders find it not only easier to sell, but have quick implementation timelines, easy user onboarding, strong customer satisfaction scores + NPS and lower numbers of CX tickets vs. opinionated user interfaces that require a ton of change management 2. Build on top of the industry standard, outdated 3rd party app Datasnipper, a $1B startup backed by Index did exactly this. How? They built AI to empower Auditors with an intelligent automation platform, sitting on top of excel. By building on top of excel, Datasnipper's users feel right at home and it reduces the friction of change management in a big way for all parties involved. 3. Go into the company with forward deployed engineers, build custom workflows and integrations and then find ways to productize it for other customers Palantir is the obvious case study here and people are catching onto this playbook. My thesis is that we'll see dozens of companies launch with this consultative approach, going after Accentures ~$65B of revenue. What many VCs used to mistake as a services company model is now widely accepted as a new GTM strategy based on a two key things: 1. Palantir's success 2. Unlocked acceleration of software development driven by AI Firms, including ours, General Catalyst, Elad Gils and Jared Kushners are all partnering up with large enterprises to launch new companies that have an easy time selling in what feels like are custom builds, but in the longterm are clearly going to be products. Working on an AI software solution with either of these three approaches? We'd love to chat.

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With so many articles and videos on the internet, it’s easy to overthink or take an overly academic approach to GTM. But GTM is really finding an answer to this simple question: “For X, we solve Y problems by providing better solutions than Z” Or, an even simpler version can be: “We do A better than B” This simple version works because there are so many existing products and services. For the same target users and their problems you're trying to tackle (X and Y, respectively, in the first statement), probably there's a dominating product or service already existing. So what you do is carry over the same target users and problems, and only think about how to provide better solutions in one or two pivotal ways. Narrowing down the number of variables can increase the chance of finding brilliant answers. Again, GTM = “We do A better than B”.

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Anyone interested in generative AI, especially GAI for GTM, should study the work of Erik Brynjolfsson. Erik is an author and Stanford University professor who examines the effects of technology on business strategy and human productivity and performance. Here's just one of the many ideas I've gained from his work, and it relates to the hot topic of the AI SDR. It starts with the belief that AI can serve human performance and not replace humans - race with the machine, not against the machine as the quote says. In the bigger picture, he's an optimist who believes AI can reverse the trend of technology widening income inequality. But that's going a bit beyond my pay grade, so let's go back to the question of the AI SDR... He points out that replacing jobs is the wrong way to look at this because most jobs are a collection of tasks. Rote tasks can be automated with AI, but most jobs include a long tail of tasks and qualities that require human creativity and judgment. The delineation of jobs and tasks means you need to define the tasks an SDR owns. In the case of the SDR, research and writing the first draft are tasks that AI can do extremely well. But objection handling, authenticity, and human connection require a...human! The takeaway is that you need to define the tasks your SDRs own. If you think your SDRs can be fully replaced by AI, you are probably setting expectations too low. This happens to align with how we are building rule5 - as a complement to human performance that performs key tasks, not a replacement for human jobs. Btw, the quote here is from a 2013 TED talk that you can find on Youtube. I'll post it in the comments. Needless to say, this question isn't new it just feels more urgent now with AI. #generativeai #ai #humanintheloop

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