Are SaaS companies losing money right now?
How is the pandemic affecting SaaS revenues?
I called up Josh Pigford (Baremetrics) to get a sense of how this pandemic (and looming recession) has already started to affect different software and recurring revenue companies.
Here's the video:
https://www.youtube.com/watch?v=haU9rTOorzk
He's already noticing some trends:
"A lot of SaaS companies are seeing the biggest loss they've seen in the past 4 weeks. I've heard from some companies that are seeing a 10-20% decrease in MRR."
"Payroll is the biggest challenge over the next year. Payroll is our biggest expense."
I work for a SaaS company and think that there's not really anyone who isn't taking some kind of hit from this.
SaaS is largely driven by two things, recurring revenue and new sales; both of which seem to be, on some scale, to be affected by the pandemic.
I think it largely depends on a lot of factors like...
Yes. This might be another reason to build a "main thing:" they (can be) more resilient when the economy tanks.
https://justinjackson.ca/the-main-thing
Great article. The restaurant analogy really makes me miss being able to go to them! I can't wait to sit down and have another fat burger, fries, and beer one day.
I definitely agree that the importance of our product positions you better in the market, but it also depends on how much of a hit your customers are taking. While not SaaS specific, I would say that landlords and utility companies are of the most important, but even they are seeing a slump right now.
I was about to say something similar. I think that right now it matters more to be in the right market than building a main or side thing in that market. Entire sectors like hospitality, events, arts, tourism, travel, transportation and many more are being wiped and it doesn't matter how big you are there.
On the other side I could see a number of new side things being born in deliveries, online shopping, conference call, scheduling, etc.
Do you think this is mainly happening with non-essential saas platforms?
Thanks for this. I was thinking the same question and used data from Indiehackers and Baremetrics to chart the change in revenue and traffic between Feb and March.
Looks like most companies are down in revenue and/or traffic, but there's a couple of standouts bucking the trend.
You can view the results here:
https://www.indiehackers.com/post/saas-revenue-and-web-traffic-in-the-times-of-coronavirus-chart-641019228f
Overall it's probably too early to judge the full impact that the pandemic is having - April's stats should be interesting
I've been curious about this, too, but have only anecdotally heard about people being laid off, not actual numbers on revenue.
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That's a great idea, thanks fro sharing
It looks like they are all doing well during COVID-19 period.