4 lessons from the SaaStr Annual 2023 conference
What I’ve learned from the Super Bowl moment for SaaS companies in 2023.
Hey, I’m Alan ;)
I lead Growth as a Senior Product Manager at Azion, an edge computing platform that simplifies how to build and run modern applications anywhere.
Along with my colleagues — Alessandro Cauduro, our Chief Developer Experience Officer, and Juliano Almeida, our Growth Marketing Manager — I flew to San Mateo, CA, for the SaaStr Annual 2023 to get the latest insights and best practices from top SaaS experts, in the world’s largest B2B software conference.
As we’re expanding from enterprise customers and including small businesses as well, we wanted to hear from other companies that have already faced the same challenge.
Now, I’m here to share what I learned about the big trends everyone’s talking about. So, ready to get into it?
Cool, let’s go. 🚀
1. Macroeconomy for SaaS: a cautious recovery?
Jason Lemkin, SaaStr’s CEO and Founder, gave his view about the last year and what we can expect for the next one. He thinks we’re now in a cautious recovery in SaaS. He doesn’t think the economy went into a downturn or even in a recession, but that we had a “shock” in 2022 and 2023.
In his own words, “Everyone spent too much money in 2021, the markets were crazy, the buyers were crazy and there had to be a shock”.
During the pandemic we saw companies like Zoom (online meeting) and Shopify (online shopping) skyrocketing, then the SaaS economy took a hit.
Some categories like these were more impacted than others, overall, tech grew a lot more than others and some hangover was expected. Layoffs happened, and hiring slowed down, but guess what? The next 12 months look more promising than the last. Maybe inflation will reflate (in the US), but the core message is that the macro is improving for SaaS.
I heard different opinions, but the reality is that we’re going back to a different world where efficiency is here to stay, and the world of growth at all costs is over.
Eran Zinman, Co-Founder and Co-CEO at Monday.com puts it plainly: “In a downturn, the greatest companies are forged”.
So, what was the secret sauce to Monday’s resilience during the "shock"?They diversified into many industries, like construction, churches, and real estate. Besides having a great product and an obsession with efficiency. In a nutshell, 70% of their customers were non-tech, making them recession-proof.
For building great products we must focus on relentlessly prioritizing product innovation resources. This means cutting costs for running our companies to keep the lights on and investing these savings in growing the company.
Lesson: Don’t put all your eggs in one basket. Diversify your customer base to make your SaaS resilient to economic downturns. And remember, even if the macroeconomy is shifting, your growth doesn’t have to, but you must be efficient and must provide real value. Some sectors took a hit while others slowed down.
2. Startups: the new battlegrounds
There’s been a software recession, and valuations aren’t what they used to be. The catch? The bar is higher now and you need to improve cash flow efficiency.
David Sacks, Founder and General Partner at Craft Ventures a VC fund with 3.3 billion under management (yes, you read it right), didn’t mince words at SaaStr 2023: 80% of venture capital for new ideas is pouring into AI. Now, AI is the backbone of modern SaaS.
David described how his investment is being split between different categories, from ideas to improving business processes, copilots, and pre-AI SaaS apps, adding AI to make the product better.
But don’t get it wrong. It seems obvious these days that any product has to leverage AI to be more effective in some way. So, instead of focusing on an AI product, you should keep focusing on solving an actual problem… but better with AI.
Lesson: It’s not enough to have a killer product, you’ve also got to be efficient, lean, and ready to prove your worth. If you’re not challenging yourself now to grow better than last year, you’re doing it wrong.
3. Product-Led Growth (PLG): the efficiency machine with a sales co-pilot
One of the real game-changers at these events is the networking. If you’re lucky, you might even bump into industry heavyweights. That happened to me — I finally met Wes Bush, the brain behind ProductLed and a bestselling author on Product-Led Growth. This wasn’t a cold introduction. We had already connected online via his ProductLed Accelerator certification program.
How’s that? 🌟
As Wes Bush puts in his free book on Product-Led Growth:
“Product-led growth is a go-to-market strategy that relies on using your product as the main vehicle to acquire, activate, and retain customers.”
The term PLG was originally coined in 2016 by OpenView’s Blake Bartlett. And we’re in 2023 still talking about PLG as the new kid on the block.
Priya Ramamurthi from Okta said during her talk that PLG has been a key buzzword for a long time, but it is becoming significantly more important in this new macro economy scenario where you need to spend more dollars to get customers. The importance is because the product does the advocacy, engagement, and retention for you.
Top companies have a 41% lower Customer Acquisition Cost (CAC) because of it. Monday.com grew 100x since 2017, from 7 million ARR to 700 million ARR, and guess what was at the core? PLG.
PLG is your ticket to efficient scaling. But wait, there’s more.
That’s when the Sales Co-Pilot comes into play: Product-Led Sales (PLS).
The PLG allows users to recognize the product’s value and directly impacts the companies’ decision-makers and buyers.
You might think PLG and sales are like oil and water. Wrong.
In my opinion, Product-Led Sales (PLS) is all about leveraging your PLG strategies to unlock Enterprise ARR.
A Product-Led Sales approach is the key to unlocking Enterprise-level Annual Recurring Revenue (ARR) — simply because sales teams are crucial in discussing governance, compliance, and security constraints to close those deals.
PLG, Developer Experience, and Enterprise ARR: Okta’s View
Monica Bajaj and Priya Ramamurthi from Okta spell it out: “Product-led outperformers generate 10% more in ARR & valuations are 50% higher compared to Sales-led Growth outperformers.”
PLG doesn’t mean self-service and isn’t just a strategy for SMBs, it’s a key for Enterprise ARR, especially when developers are involved.
They described developer persona as skeptical, who need to realize value by themselves, learn from their communities, and prefer to listen to neutral advocates.
"When it comes to software development itself, there are three pillars of developer experience: usability, findability, and credibility"
A combined PLG strategy with a stellar Developer Experience not only opens doors in the market but also keeps them wide open.
According to the latest OpenView’s 2023 product benchmarks report:
"It is now table stakes when selling to developers (no surprises there!) or very small businesses (#CAC)."
Lesson: If you’re in the enterprise sector, PLG should be your new weapon. In Enterprise, PLG gets you through the door, but PLS seals the big deals. To scale, especially if you’re closing enterprise contracts, you need to blend PLG with a robust sales strategy to combine low acquisition cost with high scaling.
4. Multi-Product: Start Early
Jack Altman, Founder and CEO at Lattice said it loud and clear:
“You should go multi-product probably earlier than you thought”.
Even if it sounds counterintuitive especially in the early stages, going Multi-Product was a trend in SaaS talks this year.
Jack also said that even though building a multi-product startup is extremely challenging for many reasons, it’s one of your best choices to compete in today’s market conditions because it is a powerful form of differentiation. Let’s break it down.
Cross-selling is easier and more efficient than selling to new customers and comes with better retention rates. Keeping your customers embedded in your workflows is a win-win situation.
So, how do you start? Don’t create random products, analyze your ideal user and identify what else they need chronologically during their journey. This leads to a more holistic solution for your customers.
Eran Zinman also said they put focus on giving users the ability to customize their product, opening doors to multiple verticals.
Lesson: It’s becoming easier, cheaper, and faster to build software in comparison with the past, AI is everywhere and leveraging our productivity to the next level in many ways. Start thinking about the user journey, not only the product catalog. It’s not just about selling more, it’s about selling smarter.
Conclusion
Eran Zinman left us with an intriguing question: Will Monday.com sponsor another Super Bowl ad as they did in 2022? The answer is: He doesn't know.
It’s a critical caveat for a deeper dive I’ll be taking on Monday.com in an upcoming article. In a world obsessed with measurable metrics, does the Super Bowl’s grand stage really make the cut? Stay tuned to find out. 🤔📈
Expect a cautious recovery for the next year, stay efficient at all costs, leverage AI, double down on Product-Led Growth, and think multi-product.
There you have it, folks. SaaStr 2023 has spoken, and now the ball’s in your court. Hope you enjoyed it, and please feel free to comment.
Big shoutout to Ana Flavia Maestri, our Product Content Experience Manager, for making this article shine. ✨
Here at Azion, we’re already getting our hands dirty, and I’ll come back to write about it as well.
If you want to know more about us, visit our website or try our platform for free and enjoy our $300 in credits to start building your application.
Fun fact: Bob
Introducing Bob, the heart of Azion’s lobby. Each time we attend an event, Bob bags a new badge.
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Until next time, let's keep building and take care!
