Navigating Your Year of Hell: Strategies for SaaS Growth

Name: Navigating Your Year of Hell: Strategies for SaaS Growth
Uploaded: 2024-12-11T15:03:53+00:00
Duration: 2 min 11 s
Channel: Jason M. Lemkin
Description: In this solo talk, SaaS investor Jason M. Lemkin expands on his earlier "Year of Hell" concept, arguing that most founders mistakenly attribute a tough…

11 Dec 2024 · 2 min

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2:11

In this solo talk, SaaS investor Jason M. Lemkin expands on his earlier "Year of Hell" concept, arguing that most founders mistakenly attribute a tough year to macro‑economic forces and respond with a permanent strategic retreat—cutting growth, reducing burn, and aiming only for cash‑flow positivity. Lemkin contends that a "year of hell" is usually triggered by internal phase‑transitions such as a bad sales hire, a broken go‑to‑market engine, or a market‑fit shift, not by the broader economy. He advises founders to treat a retreat as a short‑term survival maneuver, not a change in the ultimate goal of building a large, defensible SaaS business. By benchmarking against public comps (e.g., ZoomInfo, Monday.com, Cloudflare) founders can see that the problem lies in their own team or execution. A strong, capable team can rebuild momentum by shipping more software, fixing hiring mistakes, and tightening execution. Settling for slower growth during hard times, however, risks long‑term stagnation and makes recovery unlikely.

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I think what many people are doing— I wrote, I wrote this up a couple months ago, um, and I should update it, um, not that long ago— but too many folks are doing a strategic retreat. Too many folks are saying, woe is me, the world is terrible, I'm gonna batten down the hatches, uh, I'm gonna, I'm gonna not grow, but I'm gonna get to cash flow positive. There are times I think most founders— I wrote an old Saastr post which I think I called "The Year of Hell." Almost everyone has a terrible year. Not everyone. Almost everyone has a terrible year. Usually, it's not actually tied to macroeconomics. It's tied to a phase transition, terrible hire in sales and revenue, a market change. My year of hell was not during a global meltdown. It was during a rough VP of sales transition. But people have it, and sometimes in a year of hell, you have to make a strategic retreat. You have to say, listen, I got, I got to survive, so I got to take a couple quarters to get my act together, maybe move on from a few folks on the team that are destructive or not doing it. I got to get my burn rate under control. And that's fine, but you can't change the ultimate goal of building something big and real. So you just got to be very careful what the strategic retreat is. You have to be very aware of Going back to our kickoff session, what, what's my public comp? If my public comp is ZoomInfo or Monday or Doximity or Cloudflare, why am I not growing at their rates? Because it's you, not them. It's you. There's something wrong with you. But if you have a great team, you can fix it. We can build software. We're all building software. We can ship more code. We can't— we never get enough features. It's always too slow. It always takes too long. It's always frustrating. If you're a non-technical founder, it takes even longer. If you're a technical founder, they don't understand. They just don't understand. They never understand, and they're supposed to sell what I built. But a great team can always build. It's never too late for a great team in SaaS. They can always build more software and catch back up to the market, but if you settle, if you settle in tougher times, I don't see those founders recovering.