Bessemer’s 2022 State of the Cloud report is a must-read. Three insights stand out:
- Startups need to show high Sales & Marketing efficiency: “For every dollar a SaaS business spends on its sales team, the company will see a dollar of recurring revenue materialize in less than a year and grow nearly in perpetuity.”
- Increased competition drives differentiation: What was innovative in 2014 is now commonplace. More SaaS businesses are doing more for their customers. As the report puts it, “What were once Second Acts are now becoming First Acts.”
- Many industries lack a clear Saas Leader: The more focused the vertical, the less likely a SaaS leader has market dominance. Toast, for example, has only 6% of the restaurant market. This is a reminder not to buy into the leader’s marketing.
Overall, the report is optimistic. In fact, Bessemer lays the case for why it is still bullish—for the right investment opportunity.
