What will shape 2023 – we asked 13 B2B SaaS professionals to share their thought on this, read their predicitons below!
Mikael Johnsson, General Partner, Oxx
Here are my top 5 predictions for SaaS in 2023.
- The Chat GPT craze continues and we’ll see lots of companies emerge building applications around/on top of Chat GPT and Dall-E, as well as similar AIs from other companies. This could be the next major innovation wave in B2B SaaS as the new UX/modality is suitable for disrupting a lot of different applications.
- Google will release a “Chat GTP killer “(they have to, particularly if Microsoft gets its hands much closer around Open AI and really start to threaten Google’s search business)
- Inspired by Elon Musk’s Twitter moves and the inability to raise funding at attractive terms (at least relative to previous rounds), there will be lots of staff reductions in large private and public tech companies. This creates “surplus elites”, i.e. well-educated people who are well-paid in middle management jobs, but actually aren’t coding or otherwise creating and therefore will end up unemployed.
- Many growth-stage companies will reach the end of the road in terms of their ability to cut costs and defer fundraising. This means there will be a significant increase in the number of funding rounds in the second half of the year, but at significantly lower valuations than in 2021/2022 (down 50% or more – less in the early stages and more in the later stages)
- Many companies won’t be able to raise at decent terms and therefore will opt for M&A. . Even without considering the fundraising challenges there is going to be a massive upswing in M&A driven by unprecedented amounts of dry powder among the largest SaaS industry consolidators – Thoma Bravo, Vista Equity, Francisco Partners – who are sitting on more than $50bn of fresh capital to deploy.
Sophie Hedestad, CMO, Netigate
When it comes to goal setting the board communicates a direction. The CEO together with the management team suggests goals. Management and leaders create strategies and employees execute the strategy. Simple as that?
I hear way too often among peers in SaaS that it is not clear to them what the goals for the quarter/year are. Goals and strategies are not anchored, aligned, and sometimes not even communicated or followed up on. This creates confusion, working in silos, frustration, questioning, and excuses on all layers. In the end, the company does not reach its goals.
The solution to the problem is to upgrade your ways of working. You need to click the “reset button” to set yourself up for success in 2023. Really dig deep to understand why employees do not understand where you are going and what the goals are. To crack this nut is most important to crushing your goals. Three tips:
- INSPIRE: Keep inspiring your people about your vision and mission and why your company exists on planet earth.
- DECENTRALIZE: Set a direction for 2023 (where and why) and let the teams decide on how. Create a “we trust you and you can do this” mentality.
- DOCUMENT: You need to document in a simple way what your goals are on the company level, team level, and me level.
- FOLLOW-UP: Continuously remind people what you set up to do and what the confidence levels are to reach your goals.
Your goal as CEO/management is to create clarity for employees. When people get clarity on where we are going and why you will execute faster, be more confident, be more motivated, be more engaged, and ultimately crush your goals for 2023!
Johanna Fagerstedt, CMO, Quinyx
I see that the CMO and VP Sales / CRO roles are blending in together. We’ve seen CMOs moving to CRO roles, and the sales and marketing teams are working closer together than ever. 2023 is also the year of the CSM teams. The move from acquisition to retention and upsell (and proving the impact) will become even more important and relevant given the macro environment. The CSM teams will be the heroes here.
We will also see fewer random acts of marketing and more well-thought-out campaigns and concepts. When resources become more limited, it pushes the need for creativity, collaboration, and finding ways to stand out in the crowd. So in 2023, I expect to see an increasing number of smart and hyper-targeted niche initiatives.
In addition, ABM (account-based marketing) is on everyone’s lips right now. Again, hyper-targeting and personalization are smart ways relevant to a smaller target group, spend less money, use your resources wisely, and stand out from the crowd.
When it comes to tactics, we’ll see the return of old-school marketing. What I mean by that is eg moving over to traditional mail send-outs, classic networking at e.g. golf tournaments or small and exclusive invite-only dinners. When everyone does the same thing, how you stand out is by doing the opposite of what everyone else is doing. Dare to zig when others zag.
Regarding the sales process, we will also see a clear trend toward the CFO / CFO being involved in purchasing decisions due to more focus on cost efficiency. This means that we as revenue drivers (marketers, sales, CSM) need to get better at clarifying the business value of a purchase decision and supporting the sales journey in order to close deals. The same thing to board decisions, be ready with those ROI calculations and overviews of the impact you bring to businesses, you’ll need them in 2023.
Last but not least – I hope to see a shift towards a “reuse, reduce, recycle” strategy in all areas of business.
Cedric Notz, CEO, Float
A significant shift is expected in how SaaS companies get funded in 2023
A trend we believe is happening in the Nordic SaaS space is a shift in funding strategy. Historically Nordic SaaS companies have been funding their growth by selling equity in their businesses. This provided 2 benefits:
- Raising large sums of money
- Getting free PR as newspapers liked to publish equity funding rounds
However, recently a shift has occurred and will grow much more in 2023. More, and more, Nordic SaaS companies are raising debt instead of equity. For the following reasons:
- It’s been harder and taking more time to raise equity
- Equity valuations are currently lower than 12 months ago
- Debt is always significantly cheaper than raising equity
- Supply of debt providers has increased in 2022, giving more options to SaaS companies
- It can take only a few minutes to apply for a loan
- The media has started to talk more about companies raising debt not only equity
As a result, a significant change is happening and it is only the beginning. Where the mindset of SaaS entrepreneurs on how to fund their business is shifting and it will likely remain.
Frida Ahrenby, CMO, GetAccept
In the USA, Revenue Operations have been discussed as a main function within the SaaS industry for a long time. Have we missed out on this in the Nordics? Let me explain why I think this is good to consider in your business for 2023!
What is the problem?
Go To Market is complex, most buying journeys are digital, and involve multiple touchpoints. When buying SaaS software, usually 11 people or more take part in the decision process, each one of them armed with 4-5 pieces of information they’ve gathered independently and must deconflict with the group. It’s fair to say that the B2B buying journey today is very complex or difficult. In addition, companies have an immense tech stack which makes it even more difficult to be data-driven and you can end up having endless debates between different departments about data quality and which numbers are accurate. At the same time, you are dependent on data to be able to make the right decisions.
What is revenue ops?
The goal of Revenue Operations is to bring sales, marketing, and customer service together to drive revenue growth for a business. Rather than treating each function as separate, a RevOps team combines resources, data, processes, and strategies into a single team structure to maximize growth. It gives all these stakeholders a complete and aligned view of a business’s revenue streams. Most times RevOps is its own department, it does not sit in sales or marketing, but it could be part of a CRO team structure or part of a larger analytics team. If you work within a bigger company RevOps is supporting the people working with data in marketing, sales, and customer success. If you work in a smaller company this is usually the department taking care of all data, analytics, and reporting for you. RevOps is the glue to make sure the company is working in a streamlined manner driving growth for the company.
- Benefit for all teams, one team for growth data, analytics, and reporting
- Align Data, Processes, and people
- Stay on top of your efficiency metrics and invest in future growth
Rebecka Löthman Rydå, Investor, Inventure
It can look gloomy and dark in the SaaS industry when looking at public company valuations, but I believe the best time to build the next generation of SaaS is now (record amounts of capital in SaaS focused VC-funds and easier access to talent, cloud maturity etc.) and some trends I see shaping SaaS in 2023 are:
1) Verticalization and daring to take on the unsexy industries
As the software market has matured there is a big opportunity to take on some of the established big software segments such as CRM, BI, and ERP systems, but with a vertical focus. Offering software very relevant, with modern architecture, and easy to use for a specific vertical. Also daring to take on the unsexy and underserved industries offer ample opportunity.
2) AI-eating software
We have seen unprecedented development in machine learning, most recently the release of chatGPT from OpenAI. This will change many industries and is no longer just a hype. SaaS companies will and should increasingly use machine learning to build the next generation of intelligent software.
3) Efficient growth models will win
Gone are the days of growth at all costs and spraying and praying without ensuring ROI. In tougher market conditions excelling at efficient growth will be key in 2023. Here a product-led growth strategy can work for some but not for all.
4) SaaS companies adding financial services
A final trend that we will see more and more in SaaS, is the opportunity to expand your offering into financial products embedded into the software. Especially in vertical SaaS and I believe many more SaaS companies can increase their revenue this way.
Janus Klok Matthesen, CTO, Pixelz
As the economy continues to face challenges, companies are scrambling to find ways to cut costs. B2B SaaS providers will face requests for discounts and price reductions. But instead of simply lowering your prices, there are other ways to help your customers navigate these tough times: by offering more value.
By encouraging more people within an organization to use your solutions, promoting the use of additional features, offering payment terms that benefit your clients and so on, you can set yourself apart from the competition.
In the coming year, I predict we’ll see a trend toward consolidating SaaS licenses, even if it means sacrificing some features in favor of a tool that’s not quite as good. This further emphasizes the importance of providing exceptional value to your clients and making sure they’re aware of all the features your product has to offer.
Additionally, CFOs will play a more prominent role in general, but also in the SaaS tool selection process, so it’s essential to tailor your messaging to this audience, even if you’re not traditionally selling to the CFO. With the right approach and value proposition, you’ll be able to thrive in a challenging economic climate.
Liza Collin, Product Director, Visma Smartskill AS
Given the financial uncertainty, companies will need to be even more accurate in their commercial activities. Both from a customer point of view to make the customer certain on their decision, and from an internal perspective. Marketing budgets decrease, and companies will need to do more with less. Sales will have to work harder and smarter to reach their quotas. Therefore I believe the focus on Product Marketing will have an upswing in 2023. Product Marketing Managers (PMMs) need to provide the fuel for marketing and sales to enable more to-the-point messaging and insight, and to take ownership of launches to ensure faster GTM (Go To Market).
Ling Koay CBO, Oneflow
You said, “don’t hold back”. So I had a chat with our CEO and Founder of Oneflow, Anders Hamnes, because I know he’s not the one who holds back. At first, I was thinking to share one of those predictable responses that you would get from most people, such as AI will be part of our day to day, products becoming more important in a recession, and so on, but to me, that’s not good enough. To deliver value to your audience, our content needs more meat to the bones.
So we sat down and had a bit of chat about the future. We saw increasing competition and a decreasing barrier to entry as it’s now becoming easier to build a software company. I mean all I have to do is to ask AI to write me the code, and it gives me a code. More suppliers, more products, and more choices in the market. And this is happening at a very fast pace.
The buyers are getting bombarded with calls, emails, and to be honest, we – as buyers – don’t want to be sold to. We buy. Mass emailing isn’t going to work anymore. Even if it’s beautifully formatted by marketing. Just going to leave a screenshot of my inbox here.
As buyers, we want to make the decision to buy on our own at our own time. Buyers have access to the same information, if not more, than the seller about the product they are selling. Ogilvy said, treat your customer as your wife, in the old days. This ages like a fine wine.
Sales or marketing trying to get any attention at all need to think outside the box. When that attention is rewarded, we’d better make sure our product meets the expectations of the market to be rewarded with trust. And if we succeed in winning the battle of attention and trust, then buyers will naturally prefer us, recommend us, spread good words about us. That’s what we should strive for in 2023 – make our users proud of their choice, and put our reputation to the test. The winners of 2023 will also have the best reputation, not according to us, but according to our users.
Rebecca Faurschou, Sales Director, Woomio
No one can ignore what is happening in the world, and even if your business is not currently struggling, then I am sure you have people in your network that is becoming increasingly insecure by the number of layoffs we have seen recently.
The unstable economy and general increased insecurity in job safety mean that companies are now buying only what they need to better run or grow their businesses and we are expected to have a smooth sales process and an absolutely outstanding onboarding.
The solutions we are all buying and selling have to be a perfect fit. Now is not the time to sell big product visions, now is the time for products that makes a difference fast.
You need to have exceptional marketing, a well-executed online brand presence and explanation of value, a very personalized and relevant BDR/SDR outreach, a short and precise sales meeting followed up by well-explained material, and an easy buying process.
Basically – you have to be on point at all stages and don’t waste precious time.
To make all of this happen we have to move closer together and stay completely transparent. The different departments need to be aligned and united.
The employee has to demand more presence from management and management has to stay close to employees. We are codependent more than we have been in the past few years. If you see employees not living up to their potential then now is the time to figure out why, and if it is possible for you to enable them. If not – then you need to have a tough conversation. As an employee, you are key to success and your manager has to make sure you have what you need to do your thing. Demand for this.
Each and every one of us have to step up our game and deliver Perfect to divide good from great in 2023.
Sascha E.H. Skydsgaard, CMO, Timelog
Cash flow positive instead of burning money on extreme growth rates
When a SaaS company gets investors, it is to invest in growth. This means that we have been burning cash – and often very fast – but that has been okay as long as you could realize it into high growth rates in ARR. Now, with the unstable market, we will see an increased focus on positive cash flow instead of only high growth rates. I believe investors will demand positive cash flow as it is very expensive and difficult to borrow money, and then settle for bit lower growth rates than before – but of course still positive growth rates! However, it gives us all a challenge, because when we decrease our investments, we will see the consequences later and not now.
Increased focus on efficiency and automation
This is connected to the above challenge because for many years our industry has focused on recruitment, and we could not get all positions filled. But now we start seeing cut downs, which will force us to investigate our way of working. We still need to deliver growth, but we must do it with fewer people. And how do you do that? You investigate the internal processes and improve efficiency and automation. Especially in the front machine, we see a trend towards Revenue Operations teams that connect Marketing, Sales, and Customer Success so we remove the silos, and instead streamline processes, so we do not have to hire, but get more data-driven and efficient.
Jasmin de Guzman – Director of International Marketing, Monsido
- A great focus on revenue marketing: As the economic climate tightens, there will be an increased focus on marketing activities and the return on investment that they bring. If your marketing department does not already have a revenue commitment, I believe more SaaS companies will implement this in 2023. In addition, if you’re a marketer that has a revenue commitment – I think you’ll be asked to either support a bigger part of the overall sales revenue target and/or fewer but bigger deals!
- Do more with less: From team members to your MarTech stack, I believe we’ll be asked to do more with less in 2023. Implementing smart tools to help you be more effective, or simply optimizing what you got vs. developing new concepts will be vital to doing more with less.
Johan Crona, Founder, Cloud Capital
Climate Tech has gained momentum in the last couple of years and this trend will continue to increase during 2023. Climate Tech, technologies for reducing greenhouse gas emissions and addressing the impact of global warming, will continue to see a strong inflow of capital. And increasingly more and more exciting companies will be started, developed, and scaled.
Climate change is one of the greatest challenges facing humanity today and decarbonization technologies are an essential part of the solution. On a fundamental level, as countries and businesses around the world move to reduce their carbon emissions, demand for decarbonization technology will increase. This demand will over time translate into substantial financial returns, driving more and more investments into the sector, which in turn will accelerate both innovation and roll-out of new effective solutions available to decarbonize the world. .
Digital transformation is increasingly a global engine for sustainable economic growth with 60% of GDP dependent on digital technologies by the end of 2022. At the same time (according to “Exponential Roadmap”) digital solutions have the potential to reduce greenhouse gas emissions by 15% by 2030.
We already have all the tools available to combat climate change, and 2023 is hopefully a year we will look back to and see several positive tipping points when it comes to deploying necessary solutions broadly.