As we’ve seen, the SaaS landscape is changing, and startups are being forced to change with it. No one knows if it will continue to worsen or if we’re about to see a rebound, but one thing is clear: the period of “growth at all costs” is coming to an end.
And, in this way, the SaaS industry isn’t so much cratering as it is being held to the standards that most industries have been held to forever. Companies in most industries have not been able to rely on regular infusions of capital to finance rapid (and profitable) growth. Most companies have to focus on efficiency and profitability from the jump.
Although this market correction is painful for some, it may actually end up helping startups create more enduring and value-oriented business models. It may, indeed, lead to better companies offering better products.
But not without cracking a few eggs first. The best SaaS companies are likely to make it through these lean times ‒ if they focus on the fundamentals of their businesses, not the hollow growth that has inflated so many SaaS companies since 2013.
By understanding why and how the pendulum is swinging, focusing on the metrics that are most in line with the new form of SaaS growth, and finding creative and efficient ways to stay afloat without cheap capital, the best SaaS companies are likely to emerge on the other end stronger, leaner and more value-oriented than ever before.