2023 SaaS Trends (My 15 Learnings)
After studying OpenView’s 2023 SaaS benchmarks report
Who is it for?
SaaS Founders
SaaS Founders
SaaS Growth Leaders
SaaS Product Leaders
SaaS Cross-Functional Leaders
Anyone running a SaaS product
Why should you care?
Openview’s SaaS benchmark report is an X-Ray into the SaaS market. It cuts through the rumors by analyzing 3,500 verified data points. So, study the full report and make sure to read between the lines and numbers. This is what we did at Miro last year.
Let's dive in. 😎
Only a third of startups who launched AI capabilities during the last 12 months could monetize those AI candies. Monetizing AI is not a straightforward business. This topic deserves attention.
A drop in women’s representation in leadership roles. It seems like the ‘War Time CEO’ wave prefers male counterparts. This unfortunate trend will surely change the moment Generation Z hits the decision-making positions. Or better. Do something now...
Do you want to learn to estimate the size of a Product team (Product Design included) in any startup? Easy. It’s 8% to 11% of the total headcount.
Comparing PLG public companies with non-PLG ones. PLG public companies’ multipliers (EV/LTM) are about 25% higher than non-PLG ones. Moreover, PLG public companies grow faster and have healthier RO40 than their non-PLG counterparts. Go PLG!
Neither AI (11%) nor the next financing round (20%) is burning worries on top of ‘executives' minds. The top challenges are around the product (50%) and GTM (73%). As PLG seats at the heart of both Product and GTM, the PLG topic remains as relevant as ever.
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About 45 to 50% of Seed and Series A startups raised a round in the last 12 months. However, only 14% of Series B startups and 22% of Series C startups raised funds last year. There is plenty of $ for the early stage! Not for others.
Compared to the last year, the median headcount drop in startups with ARR above $50M is almost 50%. For those startups with ARR between $5M and $50M ARR, the drop is about 25% to 35%. Wow! Where do all those people go?
The median ARR to FTE (revenue per employee) ratio for startups above $5M ARR went up from 25% to 50%. This means that best-performing startups with above $5M ARR are rocking around $300k per employee. It makes sense due to the headcount cuts and the focus on productivity,
Forget the 2X - 3X YoY ARR growth of 2021 or even the 50% one of 2022.
Last year, the median YoY ARR growth of startups with more than $20M ARR was less than 25%. No hyper-growth signs are on the horizon...
This one is crazy! For companies with ARR above $20M, the monthly burn rate went down almost X10! What?! The staggering drop aligns with the headcount/budget cut craze, after all... It doesn’t apply to early-stage $1M to $5M ARR startups in which the burn rate remained pretty much the same as last year.
For early-stage $1M to $5M ARR startups, the median R&D spend remains a significant % of the ARR, 40%, and 60% for early-stage top performers. It makes sense; you need to build the product, after all.
For Startups with ARR above $50M, the median spend on Marketing and Sales went up while the spend on R&D went down. So for every 1$ a $50M+ ARR startup spends on R&D, it spends almost 2$ on Marketing and Sales.
The median CAC payback went up significantly! It’s an extra 5 to 6 months for Startups with ARR above $20M. The enterprise deals became much harder to close (and expand...).
Across all ARR segments, we see a negative Gross and Net Dollar Retention trend. Customers churn and downgrade more than before. For startups with above $5M ARR, the median Net Dollar Retention dropped from a healthy 110% to a questionable 102% - 104%. Lower NDR, Higher CAC, not great…
I also noticed that the median Net Dollar Retention for early-stage $1M to $5M ARR startups is less than 100%! It means REVERSE GROWTH!
You can also check out the slick PDF version of this write-up. 👇
