Tired vs. Wired: $4 Trillion in IPOs Coming, $100B in M&A, and Why the SaaSpocalypse is Over

The recovery is not coming if you're not getting the AI budget. It ain't coming. It ain't coming. There is no additional budget for pre-AI workflow tools, pre-AI Kanban tools. It's just not coming. So stop pretending. Stop pretending it's just been a rough year. Stop pretending we're going back to 2024. I know nobody in this room is literally thinking we'll go back in time, but I got to tell you, At a lot of companies that were growing 50% or 100% that are growing 10% or 15% or 20%, there's a lot of performative work being done. There's a lot of folks running the same playbooks as a year and a half ago. There's a lot of folks talking about AI in board meetings with slides, but I don't see, I don't see the products coming to market that people want to buy. There's a lot of folks running not just the same playbooks, but, but acting as if something's going to happen and growth is going to reaccelerate. If it hasn't reaccelerated by now, you have to make it reaccelerate. The markets are not magically coming back to you. All right, everybody. Again, thanks for being here. We have— I always kind of do, I guess, a late intro or summary. I know most of you were here yesterday and we're pretty deep into it this year. And I think if I had to summarize everything, I'll give you the next slide. You know, if you were here last year, it's nothing like last year. I mean, the rate of change is so high and I, I kind of wanted to summarize if it's helpful. There's so much on social media. Anthropic just is projecting, I think, that they're going to be at $50 billion in revenue by the end of June. That was out today. But we have a SaaSpocalypse with many leaders down 70% in the stock market this year. What's going on? And I thought I would kind of try to summarize at least what I see, what we see. Tired versus wired, having a little fun with an old trope, but tired versus wired, I think. And you, if you were here yesterday when I was with Amjad, the CEO and founder of Replit, The idea that we're going to vibe code our CRM, it's just dead, guys. It's just dead. Let's not talk about it anymore. If you think it's possible, use, use, use your Replit or Vercel credits from here. Try it. Go to one of these apps which have gotten so good today to use their own Replit and say, build me my own Salesforce, see what you get. You're not going to get it. It don't work. Even if it did work, you could build your own lightweight CRM. It wouldn't be collaborative. It wouldn't work with the team. It wouldn't have the security. It wouldn't integrate with the 100 apps that are here. No one's going to vibe. You're going to vibe code a lot. We vibe coded almost every single application running this event, but you're not going to vibe code anything you can build that's good, that's actually good, that's agentic. The opposite. It's quite the opposite. That was what people were saying last year. The world's going to end. You're going to vibe code everything. All our apps are dead. Now, if you talk to the folks here, if you talk to Monaco or Artisan or Lightfield or Auricel or others, the goal is that the CRM brings in deals itself. Who cares if you can vibe code a crummy clone of Salesforce from 2006? What if the CRM puts deals on your calendar? That's what we're building today. This is what you should be building a version of if you're not yet for your own companies. Not tracking deals for humans, putting deals on the calendar. If you— some of these vendors here, guys, are doing millions per week and didn't even exist last year or barely existed last year. Okay? They're doing millions per week in new revenue, not because the leads, contacts, and opportunity tabs are prettier or have purple gradients, but because they're putting friggin' deals on your calendar. That's worth $50,000, $100,000, even to the smallest company, whereas paying $200 a month feels like a lot of money for software. Okay? So that's your goal. Who cares if you can build your own CRM? I want deals on my calendar. The other thing, and hopefully most folks in this room are well past it, but the world still isn't. I don't trust AI. Last year it hallucinates too much. Everything's wrong. Guys, look at the apps that we've talked about. Look at the CPO panel we just have. The biggest issue we're going to have going forward is our agents are going to get so good they sit idle all day long. They don't have enough work. 10K, we've talked, we're going to talk all through event about our own agents, 10K that we built, our VP of marketing, AI VP of marketing, VP of customer service. 10K is just sitting here all day waiting for something to do. He's already done all the marketing for this event. 10K is already— I didn't get to the slide before. 10K is already nudging us and annoying us to get going on SaaStr 2027. I'm not kidding. It sends us 3 things we should be doing this morning for SaaStr 2027. I'm like, 10K, we got to get through this event. Leave us alone and we got to take a break. Okay. Our agents sit idle. Some of the vendors here that we've used for our AI SDRs, that we've talked about a lot, they sit idle all day because they're so good. They've already hit our entire base of 450,000 people. So once you actually get an agent into production and it's valuable for your customers, surreal, and they'll pay a lot of money for it, we're going to have to start thinking, what do we do the 23 hours when they just sit there waiting for something else to do? This is something we should be thinking about, not hallucinations. You will— any tool you buy, if you don't train it at all, if you do nothing, it will hallucinate. But the guardrails are good. You train it for 30 days hard, you keep updating every week. We, we've worked through a lot of these issues.

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Third one I wanted to highlight is that Last year, if you came here and in some ways it got worse at the start of the year, the theme was SaaS is dead. It's dead. It's all AI. It's dead. Everyone's dying. Every company's terminal. In many cases, the stock markets still believe it. I'm going to show you a slide in a minute, but if you read SaaS, you've seen it. Not everything is dying. We've seen folks reaccelerate. Atlassian, Twilio. These are old companies. These are decade-old companies that have seen reacceleration. But not everybody has. And we started this year where the stock market said, oh my God, I just don't believe a lot of these public companies are going to be worth anything. They plummeted. The SaaSpocalypse was the public market said, we don't believe in NRR anymore. We don't believe that 110% NRR is trustworthy. We believe all of the budget in the CIO's office is going to AI spend. We believe your 3-year contracts are hiding the fact that nobody's going to buy your products in 3 years. The public markets gave up. They sent leaders epic products like Monday, HubSpot, Atlassian down 60 to 70% in a couple of months. It's not— what we have to do and what all founders have to do is let that go. It doesn't matter. We are actually in a B2B Cambrian explosion. We are seeing millions of new applications and species. Look at folks out here that are doing tens, hundreds of millions of revenue that weren't even— barely existed a year ago. If you were just on our product panel, Harvey just raised at $9 billion. They didn't really exist years ago. Replit, Lovable, they didn't even— Lovable didn't exist 2 years ago. Replit did a total tilt, which should inspire you, was founded in 2016 as a pre-AI and now is doing coming up on a billion in revenue. So because we can all build apps, because we can vibe code apps, because we can build more, we're seeing an explosion. Now it's stressful because competition is exploding. If any of you are in categories where you have no new competitors because of AI, Congratulations. You're lucky, right? But I think everyone has somewhere between 2 and 100 times more competitors per category. So that's stressful. But step back for a minute. That is a blossoming of B2B and AI apps. It is a great time to be in B2B. It may not be a great time selling a 2023 app that hasn't changed and evolved. It may be pretty sad and terrible, but abstract away. If you're struggling, if your growth is still decelerating, if you have not found your AI tailwinds, Okay, great. Have, have a cocktail tonight again. Okay. This is your last time to feel sorry for yourself is tonight. Okay. Take yourself off and realize this is the greatest time ever in B2B. It's just the worst time to be selling your grandpa's software. Okay. No one wants it, but it is everything. Budget for AI is everywhere and the apps are so much better. So I'm behind this. That's— we may, you know, even Saastr with even our name, we talk, I talk a lot about B2B and AI. There is some psychological toll on old school SaaS. But man, this is the best, best time ever for me to be in AI. The other one I just wanted to highlight, maybe two more things I'm just bored of talking about because they don't matter. Layoffs. Now, why do I say this? I mean, every time you read up X and Twitter, I mean, this was just this last week was brutal. Cloudflare beat the quarter, raised their guidance and laid off 20% of their company. Okay. Everyone that is at scale that wants to reboot their company is layoffs. Layoffs last year were about getting more efficient, getting more profitable. But you know what? The public markets didn't care. Like, it's not enough to be profitable anymore because if the public markets think your revenue is going to zero, profits are not sufficient. So the layoffs of last year were about profitability. The layoffs of last week were about rebooting my team so they know how to build agents and get— tap into AI budget. But I don't think it matters because I mean, listen, I think layoffs are tough. I hope nobody has to do layoffs. I actually think layoffs themselves accomplish nothing. But what's much more interesting is exponential productivity and what you do with it. Exponential productivity. And I think the tough learning— there's a tough learning and a great learning. And even, even Amjad was thoughtful about this at the end when I pushed him because, you know, our AI VP of marketing customer success costs $257 a month. Whether that's productivity or deflation, it's a lot to reflect on, right? We replaced $500,000 worth of employees with $257 worth of agents, but the productivity is higher. It has made Amelia and me and to, and to some extent David, much more productive, much more productive. And this is what's exciting. How can you use AI both internally and with your customers to make them radically more productive, radically more productive? Internally, to be direct, I think by the end of this year we're going to give up on reskilling. I think folks are going to stop pretending they can reskill folks that are not going to be able to make the jump to the agent of change. You're going to give them time. Every CEO of a public company has to get up on stage and say, I'm going to try to reskill my team. But at some point you have to give up because it's too competitive. The market's moving too fast. So it's going to get worse. There's going to be more layoffs. That are going to sort of compete with reskilling, but we're just going to move on. We're going to have the teams we have and we're going to start hiring more and we're going to have more agents. But who can be exponentially productive? It is so— it is exhausting for me and Amelia that we manage 21 agents, right? I didn't imagine this being my job, but our— the fact that we could manage this entire thing with— I mean, we have a lot of folks helping us, but with 2.5 full-time people with agents, we are so much more productive. Like, find your superpowers for your team and your customers. You'll make a lot of money. And the last thing, just to synthesize, and I know for some of you this will be obvious, but there's two things happening in the public markets and in M&A. And look, we're all— almost everyone here is a builder, but we would like to make some money on our stock. It would be nice if our shares were worth anything. Okay. It really does help with the journey. If someday— doesn't have to be today, doesn't have to be next week, it doesn't have to be this year, but it'd be nice if we can make, make a few thousand, million, $10 million, $100 million from our equity. This is both like, like it's been a Debbie Downer 12 months. Basically, there are almost zero B2B IPOs from the end of 2021 until 2025. And basically almost all the IPOs in 2025 were a dud. Okay, great companies like Navant, dud. Figma rocketed. Now it's way off its highs. Crappy time. Nobody's bought— PE, private equity, the Vistas, Thoma Bravo, at least they would buy you even 24 months ago. Like if you came to SaaStr 2023, we would have— we have a Q&A at the very end tomorrow. Come if you have time. I'll do Q&A until I pass out. Okay. And until 2023, founders would come up on stage and they'd say, we'd have some great founders. I'm at $20 million, Jason. I'm at $50 million. I'm at $80 million growing 30%. What do I do? I'd say, well, are you profitable? Like, yeah, I'm— or I'm cash flow positive. Well, have you gotten any offers from PE firms to buy you? Like, yeah, I got 5 offers. Okay, maybe, maybe there were 3 times revenue, 5 times. They didn't love it, but you got to $20, $30 million in revenue with even 30% growth and cash flow positive, you're going to get offers from private equity firms. Those are gone. They're buying nobody. Okay. If you listen to what the best— Thoma Bravo is the biggest— that bought all these B2B companies, they're saying, yeah, we're going to do— we're doing some purchases, but only if we see real lift from AI. So that kind of sucks. IPO window mostly closed, M&A down. Public B2B stocks, public software stocks for the first time ever are trading at a discount to the overall S&P 500. That means the whole point of software was it's so efficient. Write once, buy anywhere, read anywhere. It always traded at a premium. It was such a wonderful business model going back to, you know, Microsoft Basic, Office, you know, Intuit QuickBooks, the most wonderful model in the world. For the first time ever, the public market said this is, this is worse than almost any other business I could find for it. But it's all about to change. I know some of this is all about to change. We are about to see the 3 biggest IPOs in tech forever that are going to create more value than all the other IPOs in our tech lifetimes. SpaceX, Anthropic, OpenAI, Ladd and Databricks. We'll have Arsan, one of the co-founders, here in about half an hour after this. That's going to create more market value, more value and more wealth than every other IPO since 2000. It's going to be good and it's going to lift boats up and it's going to lift tides up. And M&A, we're going to lose. We've lost. And I don't think we're ever going to get back where any B2B company that got to $20 million with decent growth got bought. But, but, but if you hit it, I mean, Cursor just is getting— I mean, it should close. Cursor is getting purchased for $60 billion, right? When Wiz got bought for $30 billion, that was a jaw-dropper. It had never happened. Now Cursor at $60 billion. If you listen to our podcast with Rory and Harry, I bet there'll be a $100 billion startup acquired in the next 12 months. It only makes sense with where the markets are. So bad news is you've got to do better than ever, right? You've got to step it up. You've got to build a great gender product. But if it is, there's more opportunity, more IPOs, more wealth creation, more acquisition dollars than ever before. So you got to decide which camp are you going to be in? You're going to be in the tired camp or you're going to be in the wired camp. But everything is getting bifurcated. We are not— when we did the first SaaS tour, guys, 2015, it's a little while ago, we all felt the same in the room and I hope we all feel like a community today. But as the next 12 months go on, it's going to feel more and more bifurcated. It's already feeling bifurcated. But the ones benefiting from AI aren't just growing more quickly, aren't just raising venture capital earlier. They're just going to explode and the rest are going to just continue to decline. So you got to find your way to be in that category. But it's going to be awesome if you can. A quick review on us, and I know most of you know this, so I want to hit a few other points. But if you've, if you've watched any of our workshops, you'll see this literally just for the rate of change. And I think what we've done going from 20 humans to 21 agents and 3 humans is any of you could do it. But even when Omraj from Breplet said we're living in the future. So I just wanted to, if you haven't seen this, this is our journey. 2024, we were 20-something humans to do less than we do with 3 humans, 20 agents, literally less in 2024. If you came last year, we had one agent, this Delphi chatbot that we all, if you came to the, to the 101, the pre-opener yesterday, we all built one. You can build one for free, go to delphi.ai. You can do it now. You can build a free chatbot, train it on your knowledge and have an agentic chatbot clone of you running before you leave the session. Just go to delphi.ai. That was all we had last year. The only hack we had is I put everything in it. I put the prospectus for our sponsors. I put every— I put the Wi-Fi password for this event. I put every detail. And we started to see just with one agent, it started to do things we didn't know it could do. It started to try to close one sponsorship deal for $60,000 on its own. It started to do more and more. And we realized, wow, that's pretty powerful. So, so Amelia and I came out of SaaStr AI Annual last year and said, okay, we're all in on this stuff. The first one we added was Artisan that's out there to do outbound for us. We trained it, it got good. Now we have 21 of these agents and it's pretty good. And it, and it may sound crazy. And as Amjad and Francis here said, we live in the future doing this. But I can tell you, like, we don't even have an engineer on our team. Like, yeah, I co-founded a, a, a SaaS company and built all the wireframes and specs that went from zero to a couple hundred million in revenue. But I'm only so good. Anything that Amelia and I have done, any, anyone in this room can do. And you can do your own version of it. Amelia gave her, gave you the recipe for it, for our, for your own AI VP of marketing. You may not do it exactly as we do, but nothing we have done is particularly clever. We just push the envelope a year earlier than 99.9% of the folks. Like, it's really not that hard. You can do it if you want. And one thing I think most of the room knows this, but I just, I just wanted to make this point to hammer it home. Hopefully most folks here today are not AI skeptics. They're not the Debbie Downers that I see on Twitter or LinkedIn sometimes. It doesn't work. AI SDRs don't work. I tried them 18 months ago. Chatbots suck. They don't work. Listen, if you were here with the Amjad session, you'll realize that our AI customer— VP of customer success was the frontline manager of the 100-something sponsors we have here. And overall, they loved it much more than humans. This wasn't a chatbot. They reached out to all these folks, found out their issues, got their complaints, did it autonomously on its own by email. And by chat on our website and then summarized all the issues. Okay. Everything is so much better than last year or really than December. Right. And just to highlight 3, and you guys may know this, if you're skeptical of AI SDRs and AI sales tools, stop being skeptical. Instead, invest a month in picking a platform and training it. They're pretty damn good today. Listen, you may have the world's best SDR and outbound team out there. But our ASDRs have done better than any single outbound person has ever worked at SaaStr, ever. They are better, but they weren't good in 2024. Okay. I touched on this with, um, with Amjad from Muppet yesterday. These vibe coding platforms, Replit, Lovable, v0, even, even vertically focused ones. They're so much better than a couple months ago. If you, if you're skeptical, just fire it up. There's like free Replit credits out there at the, at the little vibe coding tent. Try it. Try to build something you wanted to build. If you tried last year and it didn't work, I get it. I had a little bit of a flameout on my first vibe-coded app. If anybody saw it, I don't really like to talk about it. It was like a year ago. Now we build anything we build, it all works. And it— some of these platforms got better last fall for the harnessing, and then everything got better in December when Claude 4.5 shipped. Sonus and Opus, everything got better in December. And then over the last months, they figured out how to take advantage that the LLMs got better. Everything's better. So you're benefiting. These platforms are so much better than they were. And then your product should be better. Like if your product Claude 4.7 and Phi 5 on OpenAI, they're so much better than before that if your product, if your own B2B products are not much better than 3 months ago, you get an F because you should just get a boost from the fact that these LLMs are so much better, right? I mean, just for fun, if you follow this Astro thing, you know, just right before the event, I know I told the story, but think about it for a minute. Amelia spun up a parking permit app. I know I talked about it, but let's pause for a second, okay? What this app did is, I love these guys at the event center, they're great, but one thing they do is they give us a 5,000-page PDF with custom parking passes for everyone that needs one here. What do you do with a 5,000-page PDF? Well, we used to have a human that would find each page customized to the right day and the right parking lot and a human would manually send them and make a lot of mistakes and complain and often quit and not want to do this, this, this trivial task. So Amelia, like a week and a half ago, was like, could our AI agent do it? Could 10K do it? We actually had Annie do it, which was a new agent, and it was marvelous. And she did spend about an hour or two in the Replit agent building this, and it's automated all the parking passes, right? And it sounds like a small example, but that wasn't even probably possible until January or February of this year. You should have done a lot better of this with your own apps, okay? You should be, the LLMs are so good with some work, you should be doing magic in your app that you couldn't even do at the end of last year. So try again. This is my meta point from all this. If you're skeptical, if you don't think it works, try again 'cause it probably doesn't work. And even for us, we started early. We have, it's more interesting, the agents, the agents we're using, the ones from third parties like here and the ones we built internally, But we also on Saastr.ai, we have own apps that I've built and I started pretty early before, before everything got better. But we built a cool app to help you value your startup. It's free. Just go to Saastr.ai, AIVC. We built an app that judges your startup pitch deck objectively. It's been used 4,500 times. So the other day we passed a million times these apps have been used. It's just incredible scale. You, you can do this too, right? Our, the apps that I built with no help and no engineer have been used 1.2 million times since last fall. 1.2 million times. And when last year, this was our Agentic stack. Nothing was connected. We had one chatbot on Delphi, Digital Clone of Me. It was cool. It could tell you the Wi-Fi password and where the happy hours were. It integrated with nothing. It was a siloed app on Delphi. We had Salesforce connected to nothing. We had one person using HubSpot connected to nothing. We had the world's oldest marketing automation platform Marketo connected to nothing, and this, this rogue digital Jason, nothing. Now we've got 21 agents all orchestrated and working together. You can do it too. Okay, I want to breeze through the next points to make so I can talk about the markets and where we're going. But just a couple points. If you follow SaaStr, you know, if you don't, I want to highlight it here. I've said it before, I'm probably going to say it again this afternoon, and I'm Definitely going to say it if you come to our morning kickoff tomorrow, where me, Amelia, and I go through our entire agent stack, soup to nuts. If you have the energy and you care about this, we'll go through every single agent. We'll show you the backends. We'll show you how all they work until we drop, I think starting at 9 or 9, check the agenda. But still, for the love of everything, buy, don't build. Even though we build every day, buy, don't build. If any of these products work for you, stay with our products, buy them. It is not worth building the stuff that we do, which is badass. You can't buy a parking pass application out here, I don't think. If there's one, let me know. I'll run out and I'll put my credit card down. We had to build— who's going to build that app, right? Not only is no vendor here going to build it, no dev shop is going to be patient enough to build it. Like, no one's going to build it. So that's when you build, right? If we— I believe sometime this year we may be able to buy an AI VP of marketing that is better than QBee, and I'll be sad, and I'm not going to turn QBee off. We're going to talk, but yeah, we will sunset QB when we can buy it. Just doesn't exist today. But for the love of everything, buy it if you can. And then one thing, and I did, I touched on this with Amjad, if you were there. We've been saying this for a while and I'll show you. I know this is going to be hard to read. We'll share these slides, but a lot of folks say chatbot sucks. I went to a website and I talked to their chatbot and it sucked. I literally went to a public SaaS company the other day that does— that has a marketing automation solution. And I asked them what the pricing was from SaaS. They didn't know. It's not okay to not train your own agent on what your pricing is. If that was your last experience, I get you, but there's no excuse for that. So what we did, QB, our AI VP of customer success, we had QB go back and see if I can read this to you. We had QB go back and talk to all these 100-something sponsors who are just customers and handle it itself. Was it perfect? No. Kube was honest. But short answer, 120 folks were mostly satisfied with me talking to them. They were mostly happy. Okay. Pylon, which does support the writer, go talk to them. They said we screwed up with the wrong logo, but that doesn't mean Kube did a bad job, right? It just means we screwed up. But at least he surfaced the issue helpfully. But all these folks from Crest Data to Revo, they said they had a great solution. Gamma helpfully. So This isn't just a chatbot. This is a customer success agent on its own, proactively reaching out to folks, finding out their issues and where it can, solving them on its own. This is better than 99, 95% of humans are going to do. 95% of humans— when we had human customer success people at SaaStr, like we had 2 people one year, they didn't send out any emails until after the event. You can laugh, right? But that like wasn't the great— they said they were still learning. They were still learning faster after 2 months. They didn't reach out to a single sponsor. Okay, Qubi don't have those problems. And Qubi is trained on every piece of data we have. Qubi is trained on everything. Qubi knows if you submitted your booth graphics on time. Qubi knows everything you were supposed to do. Qubi knows the humans never cared and did anything. So it's an example. You can read this. If you really train an agent or just a chatbot really, really well, I think it's going to outperform 95% of humans and The meta learning is at the top. Customers will prefer a great AI to a mediocre human. They'll prefer a great AI that solves their problem today, that knows the answer, to someone that has to get an engineer and an appointment to you next week that doesn't know, that says, I'm just new to the account because your old account manager quit last night and I never told you, or last month or last year. They prefer a great AI, so build a great AI. And, uh, sorry, is anyone from Team SaaS here? Do you know how much time I really have? Anybody here? Nobody knows? Little bit of humor. What's that? Isn't there a session at 10:30? No, I have a little longer? Okay, sorry. It says 16 minutes. Okay, thank you. We're all on this together. Most things are so much better this year. This is one thing that's just a little bit worse. Okay, so I do want to summarize one thing and then I want to move on to where the world is and where the public markets are and a few other learnings where we are today. Right. So much different than last year. You can be— you can live in the future like us if you want to do. But let me kind of summarize some things that maybe everybody knows, but I think a lot of folks don't know. If you build an agent that truly works for real, not an AI feature that like, like that, that chatbot that didn't even know pricing, If you build an agent that, that as we talked about earlier, puts customer appointments on your calendar for you, whatever it is, if it's Harvey, like with Anik, that was in the last session and truly lets you process 100,000 legal documents for real and get back to your clients at a rate you never could before. If you deliver near instant ROI, demand is out the door and you look at, okay, Anthropic's revenue is like nothing we've ever seen. Okay. At $50, it'll be at $50 billion in less than 4 years. Or 4 years plus or minus. But if you're not in the loop, if you're not one of the some of the folks here, you might be wondering how the hell did they get to $100 million so quickly? How the hell did they book $3 million last week? How the hell did— like, I've never seen this before in my poor, my poor older SaaS company. It's so hard to close 2 deals. Okay, well, it's not. I tell you, in a lot of cases it's not because they have the world's most amazing sales teams. Okay? It's not because they have the best best PowerPoint slides to the pitch. It's that there is incredible demand because the ROI is so high, right? And just, just to give an example, like you could go out and buy an AI SDR tool here for $50,000. It's a lot of money, $50,000. I mean, I don't know how it is for you guys, but when I was a SaaS CEO, a $50K deal was a big deal back then. Okay. You got a little bit of a celebration. I mean, you know, it wasn't the biggest deal of the month, but in the early days, That was— we go out to lunch, you know, it was hard, but that's because we were selling medium-term ROI and ROI calculators and really great software, but ultimately somewhat incremental improvement to your life. If you can get me more revenue tomorrow, $50,000 is nothing. If you can get me $500,000 of revenue, $50,000 is nothing. And so for truly great agents, people will pay so much more than software. And that is your job. So your job is to build the number one agent in your space that will in many cases either deliver instant ROI or really replace humans. And it is so jaw-droppingly valuable that you can charge 2 to 10 times more than your software. So just like if you look at, if you look at companies like why did Shopify and Toast succeed pre-AI, their SaaS businesses actually aren't that big. Toast and Shopify is, if they were just software, they're pretty mediocre businesses. But they figured out how to add merchant services and payments and payrolls. And all the vertical SaaS companies are doing that. But the point of the story is those value-add services are worth geometrically more than just the software at Shopify. Shopify was just a software for a website for e-commerce. I think that's only $2 billion or so of its, of its $14 or $15 billion in revenue. It had to add more value. The same is happening with agents. An agent that will get you revenue, that will manage your front office or your back office, they'll automate your AP and AR, that will automate these things. More, most likely it may replace a few humans. There's a social issue, but most likely it can be worth 10, 2 to 10 times what you're charging for your software. Your job is to find and build those agents. Okay, maybe just two other points of these next two. And I want to highlight, if, if you feel behind, if you don't, not totally sure what to build, I can tell you all the products we use, we, their, their ROI is so high, they're great. We pitch them, we talk about them on The Agents, our new podcast every week. We demo them. But I gotta say, overall, a lot of Agentic products are very primitive. They're still, if you play with them, and we'll demo our whole stack again tomorrow morning, open it up if you haven't, try Delphi, for an example, you're gonna see front end and back end that look a lot like software from 3 years ago. It's just they've integrated LLMs and they've integrated workflow on top of it. It's early days. It's early days. AI SDRs didn't work 18 months ago. They began to work when we did it. Last year. Now folks like Monica that we've used can get appointments on your calendar for you. That wasn't even possible a few months ago. So the software is still early. So if you're behind in your category, my point is, if you don't have the right team, I don't have an answer for you. Okay, maybe you're back to layoffs for Tired vs. Wired, but it is not— I can't think of a single category where it's too late in B2B. It is still early. You— if you have the right team, It's true. You can, you can clone your competitors in months. And if you have the best team, you can pull ahead. Okay. It's still very early days. They just work really well if they're trained. And the third point to summarize, and then I'll spend a few minutes more meta on where everything is going. Emilia and I have said this so many times, but if I had to summarize, I couldn't say it too many times. If you're trying, if you look at what we're doing and others like us are doing, why does a lot of folks are like, oh, well, these agents only work for SaaS because you have a brand. Well, You know, a lot of people have brands, okay? You have to earn one, but you really don't need to go that far. It turns out for people to have heard about you in your industry, that's not why. Why, why, why these agents all work for us is because we work with them every single day. We make them better every single day. We train them, we iterate them, we talk to them. And tools matter, but consistency beats everything else. There is no set and forget today in agents. But the key is every single day. The outputs in many cases are just pretty good, but consistency beats it. So that, that's the cheat code and there's no reason you can't copy it for yourself or for your customers. Okay, a few minutes on higher level stuff, the markets, the world to challenge you and to inspire you. I put this up on SaaStr, but Gartner itself is having struggles in the age of AI. Gartner's actually public. Most folks don't know it. You can track it. Their events business is actually doing pretty well. Everything else is sort of being destroyed because we're using LLMs to decide what vendors to buy, right? It's benefiting G2 to some extent that's here. But Gartner, Gartner is in trouble. But I like Gartner data because they're still doing— they're still doing the work. You can, you can, you can say, oh, Gartner, Gartner changes their mind to their bias. But Gartner is the only source that I know that is actually talking to hundreds and hundreds of CEOs weekly and publishing data. So I do love the data. And so look what it says for software. Even though there's a SaaSpocalypse, even though folks, many folks are seeing new AI competitors steal their customer base, on balance overall, software spend is radically reaccelerating from $12.8 billion spent on software last year. So sorry, no, 12.8% growth, $1.2 billion— trillion, $1.2 trillion. Yeah, sorry, $1.2 trillion to $1.4 That's going from 12.8% growth in all software spend last year, which was high, to 15% growth this year. It is accelerating. It is accelerating. Now it's stressful because it's not that simple. A lot of the, like, about, depending on the data you look, about half of what CIOs and enterprises are spending is net new for AI. A lot of that is going to Anthropic and friends, but they're also cutting a lot of older vendors and consolidate to free up revenue for new agentic tools. So it may not feel to you like spend is accelerating. You have to tap into AI budget, you have to tap into AI spend. But if you do, these are the best of times. Software spend overall is accelerating like we have not seen in a decade. So you gotta go grab it. And so we'll see what happens over the rest of the year. What's happened now is in some cases, in some cases, reacceleration has started. So I, I just put together this chart the other day on SaaS-ter. And the craziest one of all, if you don't say it, is Palantir. Okay. And you can say Palantir in some, in some, in some ways is benefiting from defense spend. Of course it is. But Palantir was kind of a dog a couple of years ago. Growth had fallen after the IPO into the teens. Folks were leaving. I was talking with the CEO of a $10 billion company the other day and he's like, yeah, a couple of years ago I could steal anybody from Palantir. He's like, not now. It was a dog. But, but boy, did anybody tap into AI budget more than Palantir going from 27% growth just 2.5 years ago to 85% growth today. 85%. Alex Karp said in their last earnings call he's projecting over 100% growth at their scale. Look at that reacceleration from the budget. So that's the outlier. But it doesn't mean you can't be an outlier. There's sort of a middle group that is tapping into AI budget and accelerating. So I picked Datadog, Cloudflare, and Shopify. Datadog blew out the last quarter because it's the same old Datadog that we all love. A little too expensive, but everybody loves Datadog. But they just nailed getting all the hyperscalers to buy them, right? Basically all the AI guys run on Datadog. So you want to be that too. Datadog was not founded last year. Okay. Datadog was the, was the new New Relic if you've been doing it for a while that we all loved and it used to be cheap and simple and it was great. But they got every AI hyperscaler to use them. So like figure out a way that everybody that is blowing up in AI is also buying your product. That's the Datadog secret to reacceleration, right? Twilio and Atlassian are just super interesting. And then I'll contrast it with who isn't. Twilio was dead less than 18 months ago. It was dead. It was dead. Growth had fallen to the single digits. They pushed out Jeff Lawson, one of my favorite CEOs. The shareholder activists had pushed him out, wanted to just run it, run it for cash. And then boom. What do the agents use for communication? What do ElevenLabs use, which is already doing $500 million in like a year and a half? They're using Twilio. Okay, they're using Twilio's APIs and boom, growth goes from 4% or 6% to 20% in 18 months. That's an epic turnaround for a public company at this scale. So not everyone is selling or selling at the API level. Not everyone can do that. But, but if you can, if you can be an API that is key to agentic spend, AI spend, you can blow up like Twilio from the dead. To accelerate in predicting further growth. Atlassian is the latest example. If you study it, Atlassian, it's not a perfect story, but Atlassian was at pretty good growth at— boy, I should know— $6 billion in revenue or so, but plateauing growth. And then they really did get their Rovio agent. We had the chief AI officer yesterday presenting, if you came. They didn't— they, they, they started off with an AI agent that sort of helped, but it wasn't monetizable. It wasn't good enough. Then they built a robo agent that actually had enough value to the customer base that people would pay for it. And boom, look at growth up to 32%. So they went from a 60% solution like we talk about at Saastr, it's fine, but not something I can pay for it to something that was truly disruptive for their base. It worked. The cautionary tale with Atlassian is that their customers love it, but it hasn't yet increased the rate they're bringing in new customers. That's sort of flat. So your real job is to build an agent that people love like Atlassian did, sell it to your base, but also, also attract new customers. Atlassian still has more to prove for the latter, but boy, it's really accelerated. But we're waiting on folks, we're waiting on— so, but folks that are a little bit earlier, a lot of the classic B2B players, ZoomInfo, HubSpot, Monday, maybe they may have been unfairly punished by the public markets, but they're waiting for that reacceleration. They're waiting to tap into that agentic revenue. So it's this bifurcated market. But I don't think it's too late for anybody. If HubSpot's just crossing 300,000 customers, its net new ads are pretty impressive. Atlassian's challenge is its customers love its AI, but it's not attracting new customers. HubSpot's challenge is its AI tools are very early and no one's really paying for them. But people are still buying more HubSpot. They're crossing 300,000 customers. So even though, you know, maybe HubSpot's behind, if they can get out great agents in the next year, they got 300,000 customers to sell it to and they're still growing their customer count double digits. So it's not really too late for anybody. It's just super stressful this year. So my challenge to everybody is just who are you? Be honest. I'm in too many conversations with founders, even in board meetings, guys, even in board meetings where founders are not 100% honest. Founders that are growing 500% are pretty honest. Okay. But folks who have seen growth slow but not to zero, they're not honest. They're not honest about what's happening. They're not honest about what's happening in the market. And so I kind of leveraged a segmentation that Rory did on the 20VC with me and Harry. Which of these 4 categories are you on? If you're new AI native, you have no legacy customers, no legacy stuff like, like, like, you know, like Harvey on stage or Artisan or Monaco, you're golden because it's all up, right? Strong demand. No, no scar tissue. You don't have a bunch of people on your team that don't really want to build these products or work harder. You're category 1, everything's great because there's nothing, there's no pre-AI life, right? Category 2 is the best of all worlds. You're pre-AI, but AI is driving deals up and new customers up. That's Twilio, that's public companies like WorkOS. I think Michael might have been here, which built an OAuth system and others years ago. It was great, but the company struggled. It went through layoffs a couple years ago and then boom, like all the agentic tools use WorkOS, so it's exploded. RevenueCat, where I was the first investor, they do mobile subscription management for 50% of mobile paid apps. It's a great company, but boom, then like every vibecoded app, like mobile just exploded and they're in every single app. So if AI is driving deals up and new customers up, that's really what most of you want. That's the best place. 3 is AI is just expansion. That's the Atlassian example. Still better than most. And then category 4, guys, again, after your cocktail this evening, You got to get— you got to be honest. If you're in category 4, the recovery is not coming. If you're not getting AI budget, it ain't coming. It ain't coming. There is no additional budget for pre-AI workflow tools, pre-AI Kanban tools. It's just not coming. So stop pretending. Stop pretending it's just been a rough year. Stop pretending we're going back to 2024. I know nobody in this room is literally thinking we'll go back in time. But I got to tell you, at a lot of companies that were growing 50% or 100% that are growing 10% or 15% or 20%, there's a lot of performative work being done. There's a lot of folks running the same playbooks as a year and a half ago. There's a lot of folks talking about AI in board meetings with slides. But I don't see— I don't see the products coming to market that people want to buy. There's a lot of folks running not just the same playbooks, but but acting as if something's going to happen and growth is going to reaccelerate. If it hasn't reaccelerated by now, you have to make it reaccelerate. The markets are not magically coming back to you. And maybe just a couple other points and I'll wrap. Even we had to do it. Even we had to do it at SaaS Trail. If you've been here before, you might notice that there's a lot of different sponsors here. So I asked, I asked, I asked Claude to pull together a map. Actually, I asked Tenke, our AIVP marketing executive, to pull together a map. So you could see it. I'm a little colorblind, but even I think I can see these colors. This is the number. This is like how our, all these sponsors are. Is it orange or red? I can't tell. Sorry, someone help me out. Orange. The orange are AI native sponsors that are here. The other ones are the pre-AI ones that came back. So like almost, if you consider our sponsors customers, and we do, it's good for learning. The vast majority turned over this year. If we didn't change, we would have canceled faster. There wouldn't have been enough revenue. Like, we don't make enough money on the tickets to this event to put this event on. We could talk, but we run out of time. Like, we need these. We need— these are our friends out here. Without them, I mean, it's fun. We learn from them. Without them, we can't turn the lights on. If we didn't change, we would have— we would have sent you an apology note and done a digital event because look at this turnover. It's epic. So look, we found a way. You can find a way, but you can't pretend. If you pretend, we would have been— we would have been dead. And so maybe my last point, or I'll run over 1 minute, I'm a little confused on the timing, but, um, so what does this mean? I would say 3 things to founders, 3 things that are actionable, and maybe I'll wrap up on this. We're, as Amjad said yesterday, we're early. Like, there aren't too many people on Replit running semi-autonomous AI VPs of marketing customers. We are early, okay? But learn from us. Learn from the vendors here that are crushing it, that are doing millions, millions and millions of new revenue, sometimes per week. The agents are coming. We are all going to be in a gentech world. Take it seriously. Take what you can do autonomously for your customers and in many cases replace human labor. I genuinely believe if you can build the number one agent for your customers, you will win. We're going to have one fun session tomorrow. Here's Adam Guild. I'm on the board of a company called Owner. It just crossed $1 billion in sales for restaurants, for SMBs, for its customers, talking about the agents they build, their AI CMO. It's actually pretty new. He'll tell you what they built for the AI CMO. He'll show it to you, why it worked, why it doesn't. This is your job to build the best AI. For him, it's an AI CMO for small restaurants that don't even have a single person in marketing, whatever it is. If you build the best agent, there is— maybe we will have agent parity in 36 months, maybe even in 24 months. Today there is not agentic parity. There may be parity. You know, a lot of categories we end up where it's a little hard to tell. 4 years ago, sales loft versus outreach. What's the difference? You know, who the hell knows, right? It's almost like, do you like chocolate or vanilla? Was sales versus outreach back in the day. The agent performance is so disparate that the best agents are just going to win over the next 12 months. So that's your job. The second one, which is probably most folks are in the room are cool with, but a lot of the bigger companies struggle with, should you be open to agents? This is one, you know, we congratulate Salesforce a lot at SaaStr because it is super open to all these agents, all of the All these sales CRMs are able to plug into Salesforce and extract the data as well as push it in. Okay, we run Salesforce headless. We run 10K and QB on Salesforce, and folks like Workday and others are struggling because they're not sure how open to be your platforms. But if you're not open to agents, if you're not agent-friendly, they're going to bypass you. Again, I told this story earlier, but we're leaving Marketo, our most dated piece of software, for a new marketing automation platform. We are leaving for the most agent-friendly marketing automation platform we can find. You got to be friendly to the agents. And so the last point I'll make here, and then I think I'll leave it on this. When you go back from SaaStr, you'll, you'll learn a lot. You'll have a lot of ideas. It's great. But I honestly think even though it's a little bit of the future, the single most, the single best thing you can do is make your API— most of you have an API— make it agent-friendly. Don't do what Marketo does, which is run out of API calls in 1 hour and make you wait a day or a month to get more API calls. Figure out what the agent wants, because if the agent picks you, you're going to come up in the LLM recommendations. Folks that are building agentic products are going to pick you because you're the most agent-friendly, right? We moved our emails to Resend because it was the most agentic-friendly email platform. Okay. And we even built on SaaStr— you can go to SaaStr.ai and find it in the navs. We have an AI agent report card and it grades all the leading APIs, and you can even put your API in. It says there, submit your API, and we'll scrape your API and tell you how AI agent friendly it is. Do this when you get a chance. Right now you have to submit it, but if you don't get a B+ or better, just tell your team to build a more agentic friendly API, and it will act— you can scroll through lots of grades from Stripe got the only A+, right, to a few Cs and Ds. It will tell you and agents exactly why their API sucks for today, why agents won't want to use your API. If you get an A- on this, then at least folks that are at the edge that are wanting to build on agents are gonna pick you. There may be categories where it doesn't matter, but this is actually not that hard to change your API, okay? To allow an agent to get more data from it, to allow it to pull your API more often, to structure the output the way it wants to do, okay? This could be a couple days of work to turn whatever version of you that can be headless into the winner in your market. Like make your, even if you don't have an agent, make your API agent-friendly because guys, as tough as it is, and I will wrap on this, everything's about to get even more competitive. Everything got so much more competitive the last year because AI just created 1,000 flowers. As I said at the beginning, old SaaS may be dying, but new SaaS, new B2B is exploding like never before and you can feel it in the competition. And, but it's not that simple. The competition is so much better than everyone was. Not only are the vendors better, but everyone knows what's great now. Claude and ChatGPT are so great, you can't get away with crappy agents and crappy software. We all know. And this, the fact that we can replace humans or make humans more, much more effective means that even niche markets are much larger. And the one example I'll give, and then I'll give two more and then I will wrap, it's the craziest one are some of these CX support products. And I've done a lot of investments, worked a lot, but these Sierra Decagons and also Legal Harvey and LeGrand, these were niche markets before agents. These were niche markets that are like 10 to 100 times larger because the agents add so much value. So that also means in a lot of markets there's a lot more competition because you can monetize them much better than you could with agents. And then maybe two last things to think about and then we will wrap. I copied this from— or a version of this from Owen from Intercon the other day, but Another thing over the next couple of months is when we use 21 agents at Saastr, but everyone really— your customers just want to use one. They want to use one interface, maybe not one agent, but one interface. And there's a big battle that's coming. Even though the number of apps is exploding, when customers come to you, they want to use one agent, one interface. And this is rebooting. This means sales, marketing, and support are all blending because I don't want to talk to 3 different people or 3 different agents. I want one agent. That knows support and sales. And this is coming everywhere. And exactly where to predict it comes, I don't know, but it's creating mass overlap. And you used to have 4 to 5 years before people would compete with you. Now people may even be accidentally competing with you next week as these pains overlap. And the final point of tough love, and then I'll break, is— and I know this is tough for so many folks that come from other countries, from out of town. This is the tough truth, guys. And as I said in the beginning, it's not about layoffs. It's about having superpowers on the team. A lot of teams don't want this change. A lot of folks do not. Who, you know, do you really— how many folks really want to work even harder because there's more competition? And because how many folks really want to learn how to build an agent that isn't just a feature or a widget, but that people will pay $10,000 or $20,000 a year for? Some of your folks on your team are pumped up and excited and love this stuff, and they're hacking and they're screwing around each night. Empower them. Maybe even promote them next week because a lot of your team doesn't want to do the work. And I know it sounds harsh and I want to tell you that we can retrain them and reskill them and that having team lunches and retreats is going to solve this. But this is so much change, guys, and not everyone's going to be with it. And you just are going to have to one way or another brute force your way or the rest of the world's going to bypass you. So thanks everybody, really appreciate it. The best of times but different, and we'll keep going from here.

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