There’s no question growth has slowed and gotten harder for the average B2B SaaS company.  Take a look at the latest data from Sapphire Ventures here of 133 leading enterprise software companies:

Rough.  Growth for these leaders — all at scale, granted — has on average fallen to 13%, the lowest rate on record.

But here’s the thing, especially for newer startups:

The reality is for most startups, budget comes from disruption.  Specifically, stealing it from an older incumbent.

That’s not easy, and it requires a very specific playbook.

This got inverted in 2020-2021. There was such a rush to deploy software, and budgets grew so quickly … you didn’t have to disrupt anymore. You just had to seemingly add productivity, fuel sales, etc.

Now, we’re back to a world where 90% of us have to earn that budget, not just from an ROI calculator — but from stealing it.

Stealing it from another vendor. Right now, AI is stealing it from other apps. Apps aren’t being renewed to free up budget for AI projects.

But more common is just stealing it from a big incumbent. HubSpot stole $700,000,000+ of CRM revenue from Salesforce. Salesforce stole from Seibel. Etc. etc.

That budget to steal is always there. There’s $250+ Billion spent on SaaS apps a year.

Gartner: SaaS Spend is Actually Accelerating, Will Hit ~$300 Billion in 2025

Most apps though work just fine. And even if they don’t, it’s a huge bar to rip-and-replace.  Especially in the enterprise.  The soft costs are often far higher than the direct costs.  So it’s a high bar.

That’s how it should be. Startups are supposed to be truly disruptive. For real.

If growth has slowed for you, maybe ask a simple question: what big budget item, what big budget vendor, are we truly disrupting?  If you’re not sure — maybe that’s why growth has slowed.

Because again, that budget is always there.   Make sure you are having that discussion if growth has slowed, especially.  You should know where you are stealing budget from.  Not just hoping it comes out of … somewhere.

Dear SaaStr: Do VCs Prefer Startups With No Competition, Or Those Disrupting Competitive Spaces?

(image from here)

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