Transcript excerpt of a conversation (Jason M. Lemkin + another speaker) about trends in the SaaS industry in 2024. Speakers state they believe the SaaS downturn ended around Q3 2024 and that Q4 2024 shows improvement; causes cited include pandemic-era overbuying of software, excess headcount, customer downgrades, and weak growth/retention that are now normalizing.
SaaS was in a downturn. There's a SaaS and it start. 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 honestly just think it's like the universe like.
Flam SaaS.
Down and then splashed it way up and then slammed it down again and it's flashing back up and it's like the sine wave that's working through. And I think the size of the sine wave will go down over time. But 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. Yeah. And the downgrades were high, the growth retention for people were low. And I think we're just getting back into a better spot.
That's what I think it wasn't. They're just one of the frustrating things. There's so many people like zirp. It's interest rates. I think people just bought too much during a generational pandemic. They bought too much software and so they dialed it back, maybe too much. Because that's what we do. And we're through that. Right. We're through the over buying cycle for the most part. I think it's that simple, isn't it?
I think it's that simple. Yeah. And we're seeing it.
