A bit late to this much talked-about presentation by Avenir Group's Jared Sleeper Hannah Bao David Prilutsky on SaaS' middle-age troubles :) Broadly per them, SaaS has hit the maturity part of the S-Curve. Growth is slowing down, and SaaS cos have to spend more to get growth going, and they have really bloated up on S&M spends as a result w weaking economics / margins. AI threatens to move SaaS fm seat-based pricing to outcome-based pricing, which can impact revenue and margings further.
There has been some interesting thinking of late on this 'post-SaaS' world.
Chris Paik wrote his really thought-provoking 'End of Software' post which went viral. Then there was the recent Slow Ventures thesis on Growth Buyouts where they spoke abt vertical saas software cos buying operators (a la Metropolis parking).
A founder I support Divyaanshu Makkar of WizCommerce mentioned that in a world where saas tools abound, and there is widespread awareness, there arent as many 'hair on fire' situations as before, and almost every account seems to be a replacement account for another software. As a result there is no urgency to sell, and speed through the funnel is almost the same for every customer.
I dont do a lot of saas investing (more vertical saas really), but increasingly i am thinking about what it means to move to outcome-based SaaS. I have always held that India has always been SaaSTra (Saas + Transactions) when it comes to vertical saas, but given that UPI and structural context has decimated payment rev pools in India (payments i heard is like 75% of US vertical saas rev) that leaves marketplace and procurement as the two big rev levers for vertical saas in India. Classplus in which we led the seed, has given me some confidence that saas + transactions (marketplace) can work. They enable over 1k crs of transactions and take a rake of that. But can every vertical saas co make that work - hmmmm, dont know!
At Avenir, we’re optimistic about the future of software- but keenly aware that the sector has struggled lately.
This 45-page deck is our answer to a question echoing through the venture ecosystem and beyond: “What’s Wrong with SaaS?!”
https://lnkd.in/eviSjFw4