Private equity funded SaaS companies to chase subscribers at any cost, paying for growth regardless of profitability. When interest rates rose, the cheap capital dried up and the whole model broke. Companies that ignored unit economics got crushed.
I was part of a Vistage advisory group and we used to sort of make the joke that, you know, prepare to get naked with each other. I like that. That was one of our mantras as we went into our group meetings. So picking up on one of those topics that you mentioned, which is, you know, sort of advising folks on growth and also advising folks on growth that actually sort of increases enterprise value. And as you and I have talked about in the past, You know, I work in marketing and sales and in, in the space there a few years back, a lot of the private equity companies that were backing these, you know, sort of SaaS companies would give them more investment for every new subscriber they got, whether they made any money off of those subscribers or not. So it led to this sort of like growth at all costs kind of mindset, which certainly wasn't scalable or sustainable. And as soon as interest rates changed just a little bit, it kind of turned all of those operations on their side.
How Can You Maximize Your Business Value Before Selling? with Randy Katz Video
