A short interview/transcript excerpt of Jason M. Lemkin speaking with Brian Halligan about the SaaS industry cyclical downturn and recovery. Halligan argues the SaaS downturn ended around Q3 2024, describes companies having overhired and high downgrades, and highlights HubSpot’s long-term vision and positioning while noting major SaaS incumbents’ continued strength.
It beats SaaS was in a downturn. I don't know when it started, but I think it ended in Q3. If you look at the SaaS company's numbers, see it through Sequoia, see it through all my HubSpot dashboards where I see our customers. It felt like we came out of the recession in Q3 of 2024. And I also just think it's like the universe like slammed Sass down and then splashed it way up and then slammed it down again, lashing back up. I think we're in a different place in Q4 of this year than we were in Q4 of last year. Economically, Sasso people overbought, people had too many employees and the downgrades were high, the growth retention for people were low. And I think we're just getting back into a better spot.
Hello Saster. We are here with one of our old time friends and favorites, Brian Halligan, co founder, Chairman of HubSpot OG SaaS executive thought through all the things we've thought through over the years. Been to Sasser annual several Times Now Wearing three hats, right? Three hats. Chairman of HubSpot Sequoia Growth and Propeller VC Fund. Wearing three hats in. In Mountain 2. Are you on Mountain 1 or Mountain 2? Salesforce is now worth 340 billion. Larry Ellison, I don't know. He may be worth 340 billion himself. I don't know. I have to look it up. Just you do it right and really laugh. You've been doing this since 2006 HubSpot, but in some ways it's just getting good, huh?
Yeah, we had a very ambitious vision and it's like a big giant painting and it's starting to get good, but it's field early. There's so much more work to do and this is a platform shift afoot that we're very well positioned for. Yeah, these SaaS companies, they laughs you look at Adobe and Salesforce, both were, I don't know, I haven't looked recent but three at the call, 3 or 50 billion.
Oracle, you gotta take your hat off.
To em was like oh, they're gonna die, they're gonna slide. Rose from the dead. The last I checked they were like 500 billion. So yeah, these SaaS companies, they last.
That was my. If you have an off ramp and the offers hard to match, right. A billion dollars today with dilution, let's say it takes you another seven years to IPO and you suffer and you're capital efficient. But you have two more rounds and then 6% dilution a year. That billion today is like two and a half billion. Seven years down the road probably, isn't it?
