A lot of folks are talking about how things were in ’08-’09 and even ’00-’01 these days.
I don’t think today is anything like those times. The amount of folks buying SaaS software is a force like we’ve never seen before, and even with some stock market drama, many top SaaS companies still trade at $4B, $10B, $20B or more just a decade after being founded.
But as a history lesson, let’s use my own startup Adobe Sign / EchoSign to see what happened in ’08-’09 … the worst global recession any of us have ever seen. When the whole world shut down in many ways.
#1. First, even in the darkest times of ’08-’09 — folks still bought more SaaS than ever. That never even slowed down. You can see here even in June ’09, the peak of that recession arguably, we doubled sales over ’08:
#2. Two things though did get hit harder — SMB Churn and Upsells. Enterprise customers renewed, but they didn’t buy as many additional seats for a while. You can see that compression in this chart: the “Upgrade” column slowed for a while — quite a bit, i fact for a quarter or so — but everything else kept on growing:
#3. Customers kept buying more SaaS than ever, which masked all-time high churn in SMB accounts. SMBs just plain went out of business in ’08-’09. So our gross SMB churn spiked to a crazy high of 5.5% in May 2009 … but then returned to normal 2% by 2010:
#4. You can also see highly elevated gross churn in 2009 here — the Mar-June on the left side of the X-axis. But even by July 2009, it had returned to normal once we worked through a cycle of churn. Things were back far sooner than anyone realized on the churn side. And on the new bookings side, they never slowed down:
#5. So churn was up in ’09, but so was sales. And then … buyers just started to flood into SaaS into ’10 and then ’11 like we’d never seen. Even though we weren’t out of the recession yet, SaaS started to get really, really good even in ’10. You can see usage here:
So look, whatever comes, we’re in for a bumpy ride. But if SaaS grew like clockwork through ’08-’09 … and then by ’10, came out stronger than ever before.
I’m pretty bullish about SaaS revenue growth in 2022, and about 2023 overall.
Go forth and conquer.
