The Growth-at-all-Cost (GaaC) mindset is finally dying. 

The past 10-20 years, SaaS has been about top line growth. 

Companies have spent 80-90% of their capital on sales and marketing.

This meant they weren't spending enough on their product. 

This worked historically because SaaS was new and it was easy to provide a better solution than something on-prem, analog, or manual. 

Today the competition is fierce and it's no longer about beating on-prem, analog, or manual solutions; it's about beating an entire category of SaaS solutions (in most cases). 

This means the first iteration of a SaaS product is rarely strong enough to scale a full sales and marketing team today.

By time you sell your first batch of customers and raise a decent seed round of funding, there's already competition. 

Once you raise that round of funding you've committed to tremendous revenue growth numbers.

Now sales and marketing become the priority and the product takes a back seat, both operationally and financially.

At this point, potential competitors realized if they enter the same space and raise twice as much as you, they can move faster. 

That race for growth burns capital while slowly evolving products, leaving smarter competitors with the advantage, and that's what's changing today. 

Smarter competitors today are sitting in the background developing stronger products. 

They'll come to market once their product is unbeatable. 

These products are so strong that they require much less sales and marketing support, because they took more time and effort to develop.

That's the trend that's killing the Growth-at-all-Cost mindset in SaaS, finally.

With that said, I think we will see a comeback of the GaaC model after a huge wave of new companies leap-frogging older SaaS solutions.

Around the time that wave completes it's wipe-out of first-generation SaaS, we'll probably see an uptick in the financial and economic realm and companies will shift back toward spending a lot to grow a lot, and from there the broader cycle continues. 

Morale of the story, a lot of companies are going to get leapfrogged which is why we're seeing so much consolidation and rushing to exit, even at lower valuations.

For many companies today, it's best to seek an exit strategy if the product just isn't great enough.

Happy Selling,