To view this email as a web page, click here

The 2026 SaaS Crash: It’s Not What You Think

Software stocks just entered a bear market. IGV is down 22% from its highs. January 29 was the worst single day for software since the Covid crash. ServiceNow dropped 11% despite beating earnings for the ninth straight quarter. Microsoft shed $360 billion in market cap in a day. Basically, everything is down. Everything.

The narrative everywhere is “AI agents will kill SaaS.” Claude Cowork. Vibe coding. The end of enterprise software as we know it.

That narrative is mostly wrong. But the crash is very real.

SaaS CRASH

No Vanity Metrics. Real Numbers. And This Week, Spin the Wheel.

We're building SaaStr AI Annual 2026 around one idea: what actually works.

Real founders sharing real numbers on AI, pricing, and GTM. Not pitch decks or hypotheticals.

This week we're also doing something fun. Spin the SaaStr Wheel and lock in your ticket before Early Bird pricing ends Feb 14.

Every spin wins:

20% off
$100 off
26% off (if you're lucky)

Spin the Wheel!! And join 10,000+ SaaS and AI leaders at the biggest SaaStr AI Annual ever. May 12-14, SF Bay.

SPIN & SEE

I Wrote Off $4M to $0. My Co-Investor Marked Up the Same Deal to $30M. Here’s What Founders Need to Know About VC Incentives.

So at the end of last year, I made my biggest write-off ever at SaaStr Fund. $4 million to $0. Gone.

But here’s what’s wild: my co-investor in the exact same deal? He marked up his investment. From about $15 million to $30 million.

Same company. Same outcome. Completely opposite marks.

How is this even possible?

The “Acquisition” That Wasn’t Really an Acquisition

The startup was “acquired” for stock. All stock. No cash. The acquiring company is one of those moonshot plays where you could, I suppose, squint really hard and argue the combined entity might be worth $100 billion someday.

Could be.

Maybe.

But I couldn’t make that argument with a straight face. The startup we invested in was effectively dead. The “acquisition” was really just a soft landing — a way to give the founders somewhere to go and avoid the ugly press release.

So I did what I thought was right: I marked it to zero.

My co-investor? He looked at that same deal and saw an opportunity. Not an opportunity for returns — an opportunity for markups.

WRITE OFFS

The #1 Conceit in B2B at Scale: Masking a Slowdown in Net New Customers

I’ve seen this movie play out dozens of times now across hundreds of B2B companies. And it almost always ends the same way.

The #1 conceit in B2B — the thing that kills more companies than bad product, bad timing, or even bad management — is ignoring or masking a slowdown in net new customer acquisition.

It’s seductive. It’s easy to rationalize. And it’s almost always fatal.

I’ve written before about net new customer growth being the most important B2B metric of all. But what I want to dig into today is the conceit — the dangerous game of covering it up when it starts to slip.

TOP CONCEIT

This edition of the SaaStr Daily is sponsored in part by Wistia

Work Faster with Webinars & Videos Under One Roof

Save time, consolidate tools, and scale your webinar strategy with an all-in-one video platform built for modern marketers.

A FASTER WAY TO WEBINAR

Dear SaaStr: What Are Some of the Qualities of a “Bad” Startup CEO?

A few that I’ve seen across the handful of investments I’ve made … that didn’t work out:

Not really committed to going long. This doesn’t so much make you a “bad” CEO as one that likely won’t get much past $2m-$10m in ARR. If you aren’t committed for 10+ years, you tend to exit one way or another … earlier.
Too reactive and emotional. Yes, you do need to care to be a great leader, at least generally speaking IMHO. But if you are too reactive to all the downs and bumps, you will overreact to them. Again, you gotta go long.
Dishonest or at least, a B.S. artist. The CEOs I’ve lost money in many cases lied about something, or at least, weren’t honest about something.
Can sell but can’t build great software. This one is a bit of a shame, but it happens. Sometimes, a non-technical CEO is so great at sales and the vision that sheer force of will allows them to sell several million of a product that just isn’t there, or isn’t very good. A great CTO usually can solve this problem just in time to save the customers, but without one, revenue stalls.
Too slow. The best CEOs and founders are just fast. Fast to iterate, fast to learn, fast to fix. Sometimes, in a new or emerging category you can be slow at first. But you usually at least have to speed up after that.

But is the CEO never quits, has a great CTO as their partner in crime, and keeps meeting customers and shipping … well, they never fail.

"BAD" CEO

Dear SaaStr: How Long of a Ramp Period Should I Give a New VP of Sales?

Look, to be clear, the best ones just hit the ground running. Their first week and really even their first day. Everyone else … looks a little lost when they start.

For a Head of Sales at a seed or Series A startup, you should give them one full sales cycle—usually 90 days—to show meaningful progress. Not to quadruple sales, but to tilt the curve for real. To take control and make things at least a bit better.

Let me break it down further:

30-45 Days: They Need to Have Mastered the Product and ICP
Really, ideally, before they start. But at least by the end of the first month, they should be able to demo the product like a pro, handle the top 10-20 objections, and deeply understand your Ideal Customer Profile (ICP). If they’re still fumbling through the basics at this point, it’s a red flag. It really is.
60 Days: Build Pipeline and Close Early Deals
By the second month, they should be actively building pipeline and closing smaller, faster-moving deals themselves. At this stage, if they’re not generating momentum in the pipeline, it’s time to dig into why. It’s a bad sign.
90 Days: Show Measurable Impact
By the end of the first full sales cycle (90 days), you should see clear signs of improvement: more demos, more contracts being drafted, and ideally, more closed deals. If there’s no measurable progress by this point, they’re likely not the right fit .
6 Months: Prove They Can Scale
If they’ve made it past the 90-day mark, the next 3 months are about proving they can scale. This means hiring and ramping 1-2 reps, refining the sales process, and hitting early revenue targets. If they’re not building a scalable system by 6 months, it’s time to reevaluate.

Seed and Series A startups don’t have the luxury of waiting 12-18 months to see if someone will work out. You need results fast, but you also need to give them enough time to learn the product, build pipeline, and start closing deals. If they’re not moving the needle within 90 days, it’s better to cut losses early.

RAMP PERIOD

“Digital Jason” Has Answered 73,915 Questions. And It’s Free. Try It!

I used to get 500+ emails a day asking questions I’d already answered somewhere in 4,600 blog posts, 13 years of podcasts, and hundreds of hours of video.

The problem was never the answers. The answers existed. The problem was finding them, in your context, at 2am when you’re agonizing over whether to hire that VP of Sales or how much equity to give your first AE.

So we built Digital Jason on Delphi. It’s trained on 20M+ words of SaaStr content, and it’s updated every single day.

And Digital Jason has now answered 73,000+ questions.

Far more than I ever could.

Try it here. It’s 100% FREE.

TRY DIGITAL JASON

644 Emerson St. Suite 200, Palo Alto, CA, 94301

If you'd like to stop receiving the SaaStr Daily, click here