So leading cross-over VC firm @coatuemgmt put out a detailed report on "The Great Separation" -- Who Wins, And Who Gets Left Behind, in the AI Age

My Top 10 Takeaways: 🧵 #1: 2025 is the “Year of Offense” – Growth Trumps Everything -- Again

Coatue’s decision matrix for 2025 is brutally simple and reveals the new rules of the game:

🚀Growing >25% + Profitable? → Play offense aggressively
🐌Growing <25% + Profitable? → File your S1 immediately
🏰Growing >25% + Unprofitable? → Build fortress balance sheet
🔄 Growing <25% + Unprofitable? → Reinvent your business. ASAP.

👉Why This Matters: The window for going public with lower growth rates is wide open.

Public markets are rewarding ANY profitable growth right now. Companies that hesitate and wait for “perfect metrics” will miss the easiest IPO environment in years.

✅Action Items: If you’re profitable and growing, don’t wait.

If you’re unprofitable, get to breakeven fast or raise enough capital to survive the next wave. There’s no middle ground anymore.

Mary Meeker and the Bond team have released their latest 300+ page annual report, this time all on AI

It's very good but long, so I've summarized the Top 10 Points for B2B and enterprise founders here: 1. AI User Adoption Is Literally Unprecedented

We know this, but still, the numbers do sort of blow your mind:

▶️ChatGPT: 0 to 800MM weekly users in 17 months (vs. Netflix’s 10+ years to 100MM)

▶️Time to 100MM users: ChatGPT (2 months), TikTok (9 months), Instagram (2.5 years)

▶️Global adoption: 90% of ChatGPT users are outside North America by Year 3 (vs. Internet’s 23 years to reach this level)

👉Why This Matters for B2B: Unlike previous tech waves that started in Silicon Valley and slowly diffused globally, AI hit the world simultaneously.

This means your global TAM expanded overnight, but so did your competition. Every B2B and SaaS company now competes in a global, AI-enabled market from Day 1.

The Kicker: ChatGPT’s daily usage increased 202% over 21 months, with users spending more time per session (47% longer) and having more sessions per day (106% more). This isn’t just adoption – it’s addiction-level engagement.

Salesforce has crossed a stunning $40 Billion in ARR

It's passed SAP and now only MSFT + Oracle are bigger in the enterprise

And it's gone all-in on AI, with 5,000 AI AgentForce deals in just 1 quarter!

But ... AI hasn't led to more growth ... yet

5 Interesting Learnings: #1. Only 21% of Salesforce’s Revenue Today is from … Sales

This has been true for many years, but it often comes as a surprise to those that don’t know the company as well as they know its CRM.

Holy cr*p Shopify.

At an $11.2 Billion run rate, it’s growing at a stunning 31%.  And it’s accelerating.

In fact, it’s growing the fastest it has in 3 years.

It’s just stunning to see this sort of growth at this scale. 

5 Interesting Learnings: #1. Offline Revenue Up +33%, B2B Growth up 140%

While many think of Shopify as mainly an SMB online solution, its biggest growth now is in its largest customers (who run far more payments through Shopify), in its offline/ in-store business, and in B2B commerce.  Relatively speaking, SMB online is softer.

So there's one S-tier vertical SaaS leader almost everyone should know more about:

🏘️Procore

$1.2B ARR, SaaS for Construction Management
19% Growth
12% FCF

It almost died during GFC

But today dominates in U.S.

5 Interesting Learnings: #1. All Growth Today in $100k+ Customers

Procore serves stakeholders of all sizes — but the net new revenue growth is in $100k+ customers. $100k+ customers are growing 18% overall.

So Freshworks hasn't been immune to macro issues, but its bigger customers continue to grow and scale at an impressive rate

It's at ~$600,000,00 ARR today, growing 20%. But the bigger customers are growing much faster.

5 Interesting Learnings: #1.  Bigger Customers Keep Growing, But SMBs Have Slowed

A common theme across tech today.  Freshworks has 51,700 customers at around $2k ARR, with a quick sales cycle of just 25 days.  But in contrast to their bigger customers, the macro environment — or perhaps market saturation — has led to slowing growth in their SMB segment in 2023.

Klaviyo and Instacart reopened the IPO markets, from a 20 year low

Two great leaders, worth almost $10B now and public, and both priced at high end

But they IPO’d without any “bounce”

A little easy money and greed does help restart markets

We didn’t see that Klaviyo and Instacart in the end didn’t leave any money on the table

They maximized what they could raise, with the minimum dilution

But no bounce probably leaves the next wave of folks that are strong, but not as strong as Klaviyo or Instacart, in a slightly tougher position

I caught up with a sales rep this week on track to make $350k this year so far — and was miserable

I asked why?

A bad boss? No, he said

A crummy startup? No, it’s fine. No Snowflake, but fine.

Rough commute? No, he still works from home. What’s wrong then, I asked? How bad can it be?

“I made $500k in 2021, and now am making $350k working twice as hard or harder than back then”

He felt underpaid for working harder in 2023 than 2021

Even though he was still making $350k in today’s macro

He felt very underpaid

Want to get a SaaS start-up going?

Here are my Top 20 Tips to get a SaaS startup going and off the ground: 🔽2️⃣0️⃣🔽 1/ Take your time to find a great co-founder

It may seem like you are in a hurry, but in the end, anything less than a great co-founder will set you back. A bit more here:

saastr.com/a-simple-commi…

"A Top 10 Mistake:

Not going multi-product early enough."

saastr.com/add-second-pro… "Don’t take the easy route.  Your customers will want things that are fairly easy to build, and you’ll understand those problems well, because they are adds-on to what you are already selling.  

But these rarely move the needle."

Peter Gassner, CEO Veeva

I can be slow sometimes, but it’s taken me a while to understand what’s >different< in SaaS in 2023

Budgets are tighter, but SaaS is still growing, folks are still buying more software than ever

Here’s what’s different:

2023 is the first time SaaS itself got harder since 2005 SaaS has never been truly easy outside of a window from mid-2020 to late 2021

But every year, it got easier and easier. Not easy, but easier and easier:

One of toughest things about fundraising today is startups that are doing well but have fallen just below “the funding line”

E.g., a SaaS startup growing 100% at $5m ARR might get easily funded

If macro issues slow growth to 80%, that’s still pretty darn good. Just not enough. If the segment has been hard hit by macro issues, then shouldn’t 80% be good enough in 2023?

My rough learnings: the later the stage of the VC, the more they will lean in here a bit

If you are at $50m ARR and growth has slowed to 60% from 80%, a growth VC may take that risk

2023 is turning out to be even harder to raise VC capital than 2022. And 2021 feels like eons ago

SaaS multiples are at fresh lows, and slowdown that first came to late stage is now hitting seed

10 Simple Suggestions on How to Make Fundraising a Smidge More Successful in 2023: #1. Don’t Set Super Tight Deadlines If They Aren’t Real

Stop telling VCs they have a week to decide, if you can’t 100% back it up. Have 2 offers in hand? For sure, be aggressive. But don’t play timing games. Folks will just walk.

Freshworks is another SaaS and Cloud leader that yes, has seen some slowdown -- but still >beat< expectations

They are now at an incredible $560,000,000 in ARR, growing 23%

5 Interesting Learnings: #1.  NRR Still Impressive at 107% Given Many SMB Customers, Although Down Year-over-Year from 115%

For those of us who sell to B2B customers small, medium, and larger, it can be super helpful to see what’s happening with a leader like Freshworks.  Their NRR remains relatively… twitter.com/i/web/status/1…

So Cloudflare grew a stunning 37% at $1.2 Billion in ARR ... but that doesn't mean it was easy :)

And they were kind enough to give us a deep dive on just what's gotten harder these days and what hasn't:

#1/ New customer growth slowed to 13%, down from 24% a year ago and 32% in… twitter.com/i/web/status/1… #2/ Their top reps are still closing, and closing well — at 129% of quota.

And their productivity is only down 1%. “The top 15% of our sellers have achieved 129% of quota over the last four quarters.”

HubSpot crosses:

- $2 Billion in ARR
- Growing 27%
- $214m in trailing free cash flow

Pretty epic

#smbforever And like almost everyone, they’ve gotten a lot more efficient the past 12 months:

We’re in the second year of the VC Downturn. No need to pity your VCs. But it does add … stress.

Here are my best 10 ideas to keep your board and investors calmer, happier — and on your side. It’s worth these relatively small investments of your time:

🔽🔟🔽 #1: Respond to emails

You don’t need to take their suggestions. But reply. Many founders just don’t reply to emails from their investors. Think of them as quirky, large customers. You don’t have to do what they ask. But reply promptly if possible. If you don’t — they worry.

New sales reps are taught … a lot of things they shouldn’t be. And it leads to a lot of lost revenue.

10 Things New Sales Reps Are Taught. That Maybe They Shouldn’t Be:

🔽🔟🔽 #1: “Be careful of prospects that waste your time.”

Yes, your time is precious. But this is backwards. Almost no one wants to waste a salesperson’s time. Talking to sales isn’t fun. A prospect inbounds because they have a need. Treat them with respect. Watch your sales go up.

I’m not sure who decided the renewal should be a time of high tension with your customers.

But it has become that. An NPS damaging moment each year.

Really, it should be a non-event, done right. In fact, it should take no work at all. Done right. Every renewal has now become a time of dread.

How much will a vendor attempt to raise prices, without even a heads-up?

Will will be threatened with a shut-off if we don’t pay dramatically more?

Will we be told we have to buy a more expensive edition we don’t even need?

I think YC encouraging its founders to raise at a high price even in today’s market is smart

Yes, it may decrease the odds some can raise another round, or make it harder. VCs have a point there.

But … If the YC brand allows them to raise a lot more capital than otherwise, then that money can extend those seed rounds for 12, 18, even 24 months longer than usual

Assuming they don’t materially increase the burn rate

A lot of VCs are right now at cognitive overload

There’s no need to be sympathetic (at all), but it’s something to be aware of when you see VCs acting … differently

Here’s what’s happening: 2021 was An Age of VC Hubris. Everyone was a genius, and some of the best that had big cash exits actually quietly moved on.

2022 was Crisis Mode. It was a terrible time in VC, especially for anyone Series B or later. But folks know what to do in a crisis. You focus.