SaaS investor Jason M. Lemkin says the downturn isn't about vibe coding but real lost growth. Most public SaaS companies hide behind retention metrics that mask weakness. DigitalOcean is re-accelerating at 28% growth this year, but others will need to cut teams hard to survive.
Maybe it's that simple. But I actually think we got the SaaSpocalypse all wrong. I think that there's— it's not vibe coding that's killing us. It's just everybody has lost the way to growth. And I think because of NRR, because of revenue retention, because so many of these numbers are backwards looking, I think almost everyone is worse than it looks. You know, it's funny. I wrote it up this week. You could expand the basket very widely. But for the stocks that I follow, the most successful one is DigitalOcean. DigitalOcean's up 28% this year. DigitalOcean, all these years to a billion in cloud revenue, like in some ways very impressive to a billion, right? But in their hand, like, well, you know, it's, it's pretty good business to only be doing a billion, right? You're pretty— you could be critical, but you need to be radically accelerating growth and profitability at the same time. And you're looking at these public guys and you're like, who the hell is going to radically reaccelerate growth? Who, who the hell? And that's why when I have to come up with my 4 to bet on, I could only find 3. Like, I'm still going to do 4, but I could only find 3 because I can make the, the case that this one's undervalued and that the markets are— don't see the, the inherent value in, in— but the markets are saying you guys got to re-accelerate, and they're all going to decelerate. And so I just think the— almost all of these public B2B companies are in worse shape than they look. And while I wish we didn't have the SaaSpocalypse, man, I just, I think it's worse than vibe coding. I think vibe coding is one of those minor threats to software companies in our lifetimes. And I vibe code constantly. It's a minor threat. And that's why they all have to cut half their teams, to our conversation last week.
