SaaStr Annual 2023 Recap

A week ago, the SaaS Capital team attended SaaStr Annual, the largest SaaS-specific conference of the year. Held in San Mateo, CA, the event now attracts 15,000 attendees from all over the world. Here are our top takeaways from what we heard during the week.

SaaS is largely “figured out” now: 

• No new “magic number” or other silver bullet metric came into fashion this year. 
• Metrics-oriented presentations centered on now-standard calculations and methodologies (more on what metrics investors and executives are currently focused on below). 
• Strategy sessions largely presented known playbooks on sales and marketing with additions or modifications around the fringe. 
• That said, these incremental strategies (e.g., channel partnerships, multi-product development, strategic pricing) were interesting and important, even if they were not groundbreaking.

There was one big new concept this year, and it was, of course, Artificial Intelligence:

• Many, many sessions focused on AI specifically, and many more discussed it tangentially. 
• Like AI broadly, in the context of B2B software applications, it is still a vague concept without obvious, clear use cases. The current status appears that AI is useful for workflow automation and auto-completing reports and tasks. 
• But its work still needs to be reviewed by a human and it was advised to never use AI in regulated, legal, or compliance functions. 

Taking a cue from public equity markets, the tone throughout the conference this year was cautious optimism, following the SaaS valuation crash of 2022:

• Many presentations focused on profitability or retention versus growth strategies.
• To this point, the featured benchmarks were more “defensive” than offensive: net burn rate, gross revenue retention, not net, and revenue per employee.
• Jason Lemkin, during his keynote, forecasted that the big SaaS companies are done with layoffs for this cycle and will soon return to hiring.
• Klaviyo’s upcoming IPO was mentioned numerous times, providing the only real bright spot in valuation, fundraising, or IPO conversations. I’ve seen this IPO described as the “Punxsutawney Phil” of the SaaS world – its outcome may indicate if the SaaS winter continues, or if we are back, baby!

Lastly, it could have just been the sessions we attended, but there was a distinct focus on B2C and SMB this year. We wonder if that’s a result of the market - enterprise SaaS requires hiring sales teams, which implies raising outside capital. B2C and SMB are more product or marketing-led and can scale quickly and efficiently if they find the market flywheel.  As discussed above, attention was on efficiency and profitability, away from growth at all costs. The focus on B2C could have been an extension of this.

As always, we think very highly of the SaaStr Annual conference and recommend you or someone from your executive team attend maybe not every year, but once every second or third year to check in on these themes, trends, and to meet with your peers and investors.  In the meantime, we will continue to share what we see and hear!