COVID-19 and What It Means for SaaS

Now more than ever, businesses are looking more closely at operations and hardening our businesses to ensure they can make it through the tough economic times ahead. It also seems like everyone is consuming COVID-19 reading material and the memes that come with it.

I’ll be honest, the flood of general news on this topic can be overwhelming. So I’ve decided to limit my time absorbing COVID-19 news, and instead have opted for learning as much as I can on the inevitable economic impact: as well as studying how companies have performed in past recessions. This led me to forgo my usual blog posts (deal desk, systems, operations, sales, etc.) in favor of sharing a few of my learnings:

Let’s jump in.

The Good

Tech companies are resilient. While this may not be true for every company, data does indicate that SaaS business models hold up in economic downturns for the most part. We have recurring revenue and high-margins to thank. 

The truth is the economy tends to melt down in different ways. On a call earlier today with a few other CEO’s, my friend Rob Dickinson of Resurface.io recapped that the dot-com implosion of 2001 impacted tech the most, the 2008 financial crisis hit real estate hard, and now we’re seeing travel, retail, and restaurants taking the biggest hits.

The key takeaway here is that pockets of growth will always exist. For example, downturns can cause the marketplace to quiet down, which is an opportunity to innovate and be forward thinking with your brand and approach to building awareness.

The Bad

Expect a decline in growth rate. Operate as if only 50-70% of your projections will actually happen. And yes, the responsible thing to do is look at your burn rate, runway, and determine in what ways you can be even leaner--because your customers are doing the same thing. 

Many of your customers and prospects may be in a “live lean” and “batten down the hatches” mindset, and companies have to ask themselves how they fit in this narrative. 

Be honest and ask yourself:

1. Are you essential?
2. If not, how do you make yourself essential, or what does a pivot look like?

So yes, SaaS growth will slow, but it doesn’t need to stop.

The Ugly

Layoffs. As leaders, we talk about the importance of people all the time, so having to let go of people is the hardest thing to do. However, it’s a real possibility for many companies, and it’s one that we’ve started seeing with companies that may have prematurely hired, because they were expecting revenue or capital that may not come.

Now is the time to really look at your people, processes, and systems. Although I’m not advocating for reducing your current workforce (unless you have no other choice), you should be taking a hard look at your hiring plans. Are there hires you don’t have to make? Very often, a good process--and more importantly the right system--can fill your needs. But not only that, automation can cut costs significantly, and eliminate human error.

Ignoring how to optimize your processes and not putting the right systems in place will lead to having to make harder people related decisions down the road.

Now as a true optimist, I can’t have two negatives (bad and ugly). So let’s add another section.

The Silver Lining

This is a time for us to reset. It’s said that in times of crisis you see which companies care about people and which care more about profit. Which are you? How are you zigging while everyone else is zagging?

One of our investors said to us that pressure creates diamonds, and adversity reveals character. When this is just a memory, will your team emerge a diamond? In a team meeting this morning we talked about the opportunity in front of us. This is the time for even more innovation, and we’re definitely not letting our foot off of the gas pedal.

So do what you need to do: but do it with empathy, compassion, and tact.

As you’re hardening your business and evaluating your people, processes, and systems, please let me know if I can add value. Everyone at Streemly is a process expert and we will be more than happy to work through questions and concerns you may be having while going through this exercise. I’d also ask that you consider Streemly as your system of choice. As we’ve built an insanely flexible platform that can fit your ideal process vs. having to change your process to fit a system. You can watch a product demo, here. 

--------------------------------------------------------------------------------------------------------------

?About the Company: Streemy automates your deal desk and streamlines your sales close process to give every deal the opportunity to maximize value and cross the finish line. 

→ Build complex processes in minutes

→ Streamline approvals with advanced approval logic

→ Review and act on deals from Slack, text email, etc

→ Build in policies, thresholds and auto enforce

→ Get insight into deal specs (over discounting, terms, etc.)

→ Generate docs and send for e-sign with Google Docs and DocuSign integration 

→ Remove manual work and human error

→ Keep a full audit trail

→ Streemly’s seamless 2-way integration ensures your CRM is the ultimate source of truth.

Request a demo at Streemly.co/demo

About the Author: Andrea Ibanez is an award-winning business leader, entrepreneur, and sales and B2B SaaS expert. She was highlighted in Utah’s 40 under 40, the 2018 Women Tech Awards, 2019 Sego Awards in Innovation & Technology, 2020 UWS Emerging Leader, 2019 Silicon Slopes Tech Summit top 8 startups, and has won many more awards with the many companies she’s helped scale.

Andera is the CEO and co-founder of Streemly.