The SaaS market is expected to grow to over $230 billion by the end of 2024, and more than triple to reach $800 billion by the end of 2030. While tech funding has declined overall this year, this sector continues to grow substantially, fueled by an increase in remote and hybrid work, demand for mobile applications, need for scalability and other factors. In fact, global spending on software is projected to reach around $8,700 per employee heading into 2025.
We sat down with Nick Hogan at Cordance to discuss trends in B2B SaaS funding and how companies can elevate their go-to-market strategy to take advantage of growth opportunities post-investment.
Question: Can you tell us a little more about your role and focus at Cordance?
We acquire and accelerate the growth of vertically focused B2B and SaaS companies. I run our compliance division and work with all our business units in my division to grow their presence externally. That means supporting them with marketing best practices, building go-to-market plans, analytics tracking and ROI. The bottom line is growth - we need to make sure they grow effectively, sustainably and in a real and tangible way with their customer base.
Question: Despite an unpredictable investing climate over the last year, SaaS is expected to grow 214% by the end of the decade. Cordance has recently acquired several SaaS companies into its portfolio. What top things are investors looking for in today’s environment?
At a foundational level, one thing that’s incredibly important is sustainability. Although many SaaS companies pop up rapidly, it’s not easy to retain clients and sustain a business anymore. Even if you’re plateauing but maintaining market share, that says a lot about the business. We look at: do you have true fans? Are you building something that speaks to people and grows with them?
We also look for the ability and experience to see and handle inflection points. If you hit a ceiling and then break through it, that says a lot about the business and the people.
Question: How important is a strong brand when evaluating companies for investment and accelerator partnerships?
The brand is huge. Often the biggest gap with marketing in general - but particularly in SaaS - is not truly understanding who you’re speaking with. That sounds basic, but many times software companies want their product to apply to as many companies and roles as possible. Not taking the time to understand from a customer perspective why it is valuable is a big miss. You need to understand how your brand is resonating externally, not just internally - otherwise it’s centered on your perspective. Things like social presence, ads and content are important of course, but how a business messages, speaks to stakeholders and goes to market is critical. SaaS companies need to really understand their customers and prospects and put intention and investment into those areas. A lot of companies grow their brands well without it, but that only lasts for so long.
To get a true feel, look beyond the vertical or industry to the user, and how they and their leader are seeing your product. It’s critical to recognize that and then focus on it. There are two steps to doing this which will help build a strong B2B SaaS GTM strategy:
Ask yourself, “Do I have a product that does resonate, and can I sustain it?”
Figure out why or why not
Question: As the SaaS market grows both in terms of vendors and buyers, what are some areas brands are homing in on to differentiate themselves?
One pitfall we see is wanting to differentiate in the same old buckets or areas you always see. For example, price, ease of use or color. There’s nothing wrong with that, but there are so many other ways to make your business stand out.
I believe the best way to differentiate is to figure out who your company really is. A lot of companies aren’t looking at what their unique strength is and then building on it. For example, if you're really creative, how do you push the envelope more? Some businesses have deep expertise, a lot of experience or are really consultative - if that’s the case, highlight that as your strength and use it to educate your audience better than anyone else.
The best brands are based on their own culture, and it’s real, meaningful and authentic. I love the brand Oats Overnight for this reason. Their personality comes through in the way they market. In one of their ads they read their worst reviews on video, which can be risky. But the truth is most of the bad reviews are for flavors that have 4.4 stars, so they knew not everyone hated them and it would curry favor with their fans. On social media they speak their mind whether it’s positive or negative. This is their personality in all that they do. They show that they're a fun company - and while they’re doing that, they’re also checking the boxes everybody else does, but in a way that is memorable. That realness resonates with their audience as they grow.
Question: What are some of the biggest marketing gaps - and opportunities - you are seeing with B2B SaaS companies looking to increase demand and growth? What do they need to elevate in order to maximize ROI post-investment or acquisition?
Tactically, it varies so much based on the business. Some of the basics always come into play when you want to accelerate to the next level. Investing in technology and making sure it meets your needs is one. This includes a new review of tech you’ve used for a long time; you might find that it works well, but it doesn’t mean it’s the best for you.
Another is making sure your people are always upskilling and growing. Part of the brand plateau is people - things get stale. It’s important to figure out ways to mix things up and try new ideas and ways of working. The more the team is upskilled, the more creative they feel about new ways to add value, which helps break through any ceilings you might be experiencing. It also helps with employee retention which is hugely important in this market.
Question: 70% of B2B decision-makers say they are now open to making fully self-serve or remote purchases. How are you seeing B2B SaaS marketing strategies and the sales cycle evolving as a result?
I don’t think marketing broadly is responding to self-serve quickly. I see some brands making it easier to get further through the sales cycle - sometimes even to the transactional point - but not many.
A few years ago at a conference I learned about a pool company that created a web experience with very detailed questions about what type of pool the customer wanted. It’s interactive and engaging, and by the end, the customer need becomes very clear. Then when a sales person talks to that customer, they aren’t trying to sell a huge menu of pools. Instead, they cater to the customer, speaking to what they want rather than trying to sell them.
These kinds of experiences are critical to compete and be successful. It’s not an easy code to crack. To get a lot of information from a prospect is challenging, especially if it’s a complex product. But it’s a code we need to crack in order to hit scale.
Question: AI is playing a significant role in SaaS company positioning. With the hype transitioning to real use cases, how do you envision this impacting marketing over the next year?
AI will impact marketing. We’ve already hit a big AI inflection point, so now it’ll get better over time.
I think it’s important to understand what you believe to be AI’s potential and its ceiling. Identifying both are critical right now. I’ve seen content scale on a huge level with AI for a lot of our businesses - for example, the ability to get started faster, put words on paper and get it to a workable place. AI’s potential is huge here.
But understanding its limitations is also important. For example, you’ll often find oddly structured sentences that need to be cleaned up. AI content also still doesn’t have the flow, warmth or personality we’re accustomed to. Audience interest wanes if you use AI for a lot of content. Figuring out how to maintain a human voice is important for the sake of readability. We don’t make content just for Google to crawl, but for people to read. AI doesn’t do that yet. Using AI effectively requires marketers understanding how to embrace it for scale and support - but the need for expert content developers is still there.
Question: Do you have any final marketing tips for how SaaS companies can maximize growth after M&A or funding?
Speaking from my whole experience including both on the investor and corporate side, one of the biggest issues I see post-investment is lack of trust. If it lacks on either or both sides, that degrades the potential success of the relationship and the company.
It’s really important for leaders to realize they and their investors are on the same team. If you work there, you should want to grow. Recognize you are on the same team, and investors are not against you. We all want growth.
One of the greatest things leaders can add in this stage is really knowing your business. That’s what investors need to know. Understanding not just products, but your products, customers and history together and bringing that to bear is really valuable.
I also always recommend being open to investor advice - they have experience you don’t. Combining these two sets of expertise creates a lot of success.
Ultimately, being collaborative, listening on both sides, and objective decision making based on the goal are the key ingredients to a successful partnership. The investors and the company both need to have the same clear goal and mission. Once we know what we’re trying to achieve, we can make hard decisions based on that, and not on what we feel. If everyone can buy into that concept, there’s a lot of room for growth.
For more information on the state of the tech customer journey and how B2B SaaS companies can create a strong GTM strategy that engages and retains customers throughout the lifecycle, download our latest report.