2023 has been a volatile year for the SaaS ecosystem, marked by cataclysmic and unprecedented layoffs, significant shifts in business strategy among founders and executives, a prioritization of operational efficiency and cost above all, and a transformational approach to hiring. As the year draws to a close, let’s look back on the milestones and challenges of FY23 within the SaaS ecosystem.
Only the necessary will survive
Reviewing the data from placements I’ve made personally in FY23 reveals a consistent theme: the clients’ products, at their core, drive operational and cost efficiency, improve security and compliance, or automate processes. They are perceived by executives and economic buyers as essential. The approach to hiring GTM talent has undergone significant change, particularly in the scale-up ecosystem, highlighting the importance of partnering with Top Talent Partners who specialize within their segment.
The 3x Rs:
Recruiting, Retention, and Revenue should be the focus blueprint for every software company and 2023 continues to prove the importance of this mantra, with this year magnifying the growing pains for start-ups. Some of the common challenges faced by our partners this year have included building brand equity and visibility in an ultra-competitive landscape, scaling the GTM team across revenue stages (0 to $1m ARR, $1M to $10M, or 10M+ ARR), creating a recruiting process that drives a positive candidate experience in a turbulent market, and not only uncovering but attracting A-Players aligned with their culture and vision.
2023 highlights the significance of partnering with a GTM specialist when building, strengthening, or scaling the GTM function. Cognatio Solutions alone placed over 100+ GTM hires (90% achieving ramp), reducing the average hire time by 27 days.
Although we’ve helped founders, revenue, and people leaders build, strengthen, and scale their GTM organisation worldwide, it’s impossible to overlook the tech industry’s loss of over 240,000 jobs in 2023, a total of 50% higher than last year and growing. Several factors contributed to these layoffs: economic downturn pressure on bloated businesses, inflated salaries post-COVID boom, and the reality that many SaaS products, when scrutinized, are perceived as a luxury rather than a necessity.
Retention of top talent has become as important as recruitment, with specific GTM functions being under the spotlight this year. The days of steady streams of inbound leads are a distant memory for many businesses. It’s paramount to have Account Executives who know their product/ICP inside out, are adaptable to challenging market conditions, and have a track record of self-sourcing their own business with little to no support from BDRs or Marketing.
Customer Success faced immense pressure in 2023.
In such a turbulent market, CS has become the linchpin for businesses with all eyes on customer retention and the protection of revenue streams at all costs. Moving forward I believe Customer Success will see the love and respect it deserves as it continues to be the essential safeguard for businesses.
Presales talent saw a surge in demand this year.
SEs for many SaaS scale-ups are the backbone for driving sales and building trust, with those possessing a balance of business and technical acumen being highly sought after. I’ve seen firsthand on several occasions SEs facing the challenge of choosing among four or more offers on multiple occasions.
Last but not least are the Sales Leaders, who have proven to be crucial to success and this year demonstrated that it’s vital to have an A-Player sales leader. Their ability to navigate market ambiguity, drive revenue, be hands-on with customers, and set the tone for a company’s sales efforts and culture is indispensable.
Finally, as we reflect on the tumultuous landscape of the SaaS ecosystems in 2023, it becomes evident that adaptability and strategic partnerships are paramount for survival and success. As we look ahead to 2024, the lessons learned from this challenging year will undoubtedly shape the future trajectory of the SaaS industry. Therefore, by embracing innovation, prioritizing the 3x Rs (Recruiting, Retention, and Revenue), and navigating the complexities of the market with precision, businesses within the SaaS ecosystem can position themselves not only to endure but to thrive in the dynamic and ever-evolving landscape.
We understand what good looks like at varying stages of the startup & scale-up growth curve; from SDR to CRO, we will help you grow from seed to market lead in 2024.