Jason M. Lemkin discusses current SaaS and tech market dynamics, arguing that many segments (e.g., Klaviyo/Shopify ecosystem, fleet-management SaaS, security/compliance, AI-driven software) remain strong and growing despite concerns of a broader downturn. He notes mixed signals: strong growth at several companies (Klaviyo, Samsara, GitLab) alongside weakness at large incumbents like Salesforce and some database vendors (MongoDB), and suggests companies must adapt by selling differently, building more AI-enabled functionality, and being hyper-functional.
Chapters
So you have Klaviyo. You might not know about Klaviyo, but Klaviyo is the number one partner in the Shopify ecosystem. They are the HubSpot of Shopify. They're at almost a billion in revenue, growing 35%. And the first question I asked Andrew when I interviewed him on stage a couple weeks ago was are we in a downturn? And he's a great guy, fairly serious. He just laughed. He said there's no downturn in our space. So listen, Sam Sorrow, we're going to do a great podcast with the CEO soon. SaaS for fleet management for trucks and more, growing 36% at 1.26 billion AR. So non tech is strong. We know AI is strong. Is there a bubble? Yes. Does it matter? Who knows? But Google Cloud, Azure, GitLab benefiting just a little bit on fire. And we talked about security compliance. There is no downturn in security and compliance. Is there some pressure? Yes, but Zscaler, Crowdstrike, Rubrik, all of these folks, security compliance, there is no downturn, but it is on the right. And then I want to dig into what I mean. But Salesforce is profoundly struggling for the first. It's fallen to single digit growth for the first time and it's complicated. Folks are still building an epic amount of software fueled by AI. We see GitLab up 30%. That's a derivative of building more software. But Mongo's down 13%. Mongo, which is perhaps the the leading standalone public database platform, they're in so many workflows, they're seeing pressure. Folks are reducing spend. But interestingly, Mongo said just a couple weeks ago, there's pressure on workflows. Folks are trying to spend less per application. But net new customers are growing just as fast as ever. Net new customers are growing just as fast as ever. Elastic and Asana similar. So listen, it's just a new normal. And the tough part for folks on the right, which is probably folks like you, is you have to do more. You have to maybe either sell to different customers, you have to build more software, you have to be more AI, you have to be hyper functional, which we'll talk about and let me summarize it and then go into a little bit of a deep dive.
