SaaStr 825: The State of AI + Software: Where It's Going - Fast

24:07And also a lot of them have very, very lean sales to marketing teams. So traditionally half your headcount or more is in sales and marketing. Traditionally, 30 to 40 % of your company is just salespeople. You're just not seeing that. So being single product and having almost having a much smaller sales and marketing team enables these companies to be smaller. Okay. Next point that I thought this was really interesting from the iconic data. And it's a reminder that AI washing don't work. Putting AI in your website, don't make you a rocket ship. 94 % of public B2B companies now mention AI and say they have AI agents.

24:51Adobe on its last earnings call, Adobe is, I mean, it has some AI tools in creative, but it's not ahead of a lot of the competition. I think it said it had 5 billion of AI-influenced revenue, AI influenced revenue. What malarkey. But my point is everyone is either is an AI company or they're sort of an AI company. Everyone has a co-pilot. A lot of co-pilots are terrible. A lot of them don't work, but everyone's got a little AI, a little clippy 3.0 waving at you to help you. Everyone's got some AI. It's not enough. It's not, it's not, was this, could you AI wash late a year, 14 months ago? Maybe, maybe you'd get people's attention today.

25:31Everyone's an AI company. So what really matters is, again, have you built something that is so disruptive with AI that it will generate massive market pull because it wasn't done before? Because if it's just saying that you have a, everyone's got an AI agent, it's just not a change. 94 % of public companies are claim their AI companies now.

25:52Okay. Maybe just four more points and then we'll open it up to questions. I think we mostly hit this one on headcount, but this sort of summarizes it. Startups are going, as they scale up, have ARR per FDE has gone from 182 to 237. Again, once you're public, it's more like 400 to 500. But this is materially more significant while operating expenses has remained flat, even with inflation. So we're spending less overall per employee and they're at least getting 20 % to 30 % more ARR per employee than before. And we're not paying them more. Net-net. It doesn't mean that there's not salary inflation, but net-net, we're not paying them more.

26:41So if you're not working at least 20 % to 30 % harder than you were 25 months ago, you're behind the curve. And if you feel like you're working 20 % to 30 % harder than 24 months ago. Good. Because that is the minimum required to be successful in today's world. Okay. Just two more, then I'll share where I think it's going. And this one is minor, I think compared to the others, but I still thought it was interesting. I'm not sure I like this term offshored. I think we all have distributed teams now and most of us have globally distributed team. So Iconic use this term, not me, but it is interesting to see that going into 2026, um, we're, we have far, far more employees that are what they call offshored, right?

27:28And, uh, it's mostly within engineering as it been, but this trend is increasing. This trend is increasing from 24 % of headcount, so-called offshored outside of your primary location and country, international headcount up to 30. So, you know, just sort of interesting that it's almost two countervailing trends. The whole world in AI is coming to SF. I put together, I should have put it to this slide. SF, almost all the hiring and net hiring in tech is in SF. It's twice New York. And basically after SF in New York, there is no net hiring. It's net negative in Austin. It's net negative in Miami, all of it because everyone there is flocking.

28:07But at the same time, we're using distributed and international folks of our team even more than ever before. So both are happening. We're getting more San Francisco-y and we're getting more global at the same time, which is somewhat interesting. So think local, go global. Think local, go global. Okay. Final one is Captain Obvious. We've written on this on SaaS for multiple times. It's been on multiple Workshop Wednesdays, but I felt I had to pull this slide one more time so that especially founders and executives know this in B2B. I know it's Captain Obvious, but all the venture money is into high-growth AI companies.

28:44High-growth AI companies. Last year was$363 billion, which was a massive jump from 2023, as you can see. But already this year, it's exceeded all of last year, just in the first months alone,$377 billion in the first six months. So the amount of capital into AI will be off the charts this year. You can see it on Twitter. You can smell it. You can feel it walking in the streets of San Francisco. But here are the raw numbers. As crazy as last year was off the charts, it's already more than doubled. And it is 70%, 80 % of all venture capital. Just adding a copilot is not enough. 97 % of public companies have an AI copilot or an AI agent.

29:23It's not enough. VCs are looking for what we've seen in this slide. They're looking for faster growth with better sales and marketing efficiency and huge inbound demand, huge demand from the markets. And this is one that I, again, I think a lot of folks are struggling with because many folks in B2B have had to generate a lot of that demand and that still works. That's still important. the leaders in ai b2b are doing events there 11 labs is doing a huge event i think in a couple weeks open ai has done done one just the other day everyone's doing events everyone's doing webinars everyone's at the best events like saster annual and ai summit and sasterland they're all doing this stuff but on top of it they have massive inbound demand and it's just what vcs want or what is on this fair or not uh if you just look at some of these charts ask yourself if you if you had a lot of money to invest, where would you invest?

30:17You would invest here too, even if there's risk, even if there's risk that this revenue isn't that sticky. Okay. So just to kind of summarize before we take questions, what are we seeing at Saster? We're up to, again, adding agent force this week, depending on how you count is either our 12th or 21st AI agent at Saster. And it's our sixth sort of AI SDR BDR that we've added. It's just starting guys. This is just, I think we're at the bleeding edge. We have other webinars and presentation with all of our data, all the vendors who use everything, but it's just getting going. It's going to be so much better in six and 12 months.

30:51And we're so early that if you were a skeptic six months ago, please don't be a skeptic today. Please embrace the future. It's okay. If you're in a conservative industry, it's okay. If you hit your number without any help. I was just this week with a VP of support at a very, very fast growing B2B company. And I asked him what AI agent he used for support. He's like, no, we don't need anybody. Honestly, our product, we do a million interactions a day. We only get about 200 tickets. We have a team of 15 global and they can pretty much cover that. I'm like, maybe you're the one B2B startup I know that doesn't need an agent.

31:30It's like, can you answer every single customer query in real time? Well, actually, you're right. We can't. I mean, then at least have an agent do that. We're just getting going. We're just getting going. It's so early. And the second point, and this is one Mark Benioff made when we did this session with them. Salesforce does have a lot of challenges today. It's a$42 billion business, and there's a lot to do. But his point is, so many of their customers have just started with AI. They're so early compared to what a lot of us are doing. What it means is the good times are still to come. From the first two points, the penetration rate is so low that just as we saw on the prior side for VC, 2025 is the first half already eclipsed 2024.

32:13For agents and B2B AI, like 2026 is going to be an order of, maybe it might be an order of magnitude bigger than this year. It should be an order of magnitude. We've just gotten going. And so the third point, I've tried to kick everybody's arse. If you came to Sasser Annual and AI Summit this year, I told everyone you got to get working much harder. I've told people, if you didn't get your AI product out by June 30. You were too late. You were behind. There's no excuse. I believe in all that stuff. This AI stuff ain't new. If you're not in market today, it's pretty embarrassing. Your team isn't good enough.

32:48They're too slow. Having said all of that, and I stand behind all of that, when I look at where we're just getting going on agents and enterprises, it's not too late for anybody. No matter how it feels with Lovable and Vercel and Clay and all of this stuff, it's great that these folks have exploded and shown us the way. For most of you, your customers are still early. Most restaurants and beauty salons and regulated industries and big enterprises, they've barely started. So if you're behind, it's not as bad as I thought, But it's time to catch up because 2026 is going to be 10x larger for AI B2B than it is this year.

33:29At least, at least 10x larger. And the last point on this for the skeptics, for the skeptics. If you still don't think AI works, if you don't think it works for support or sales or marketing or anything, try a well-trained one. Go, if nothing else, go to sasser.com. click on the bottom right where we have our general ai agent from delphi and talk to it share your b2b issues talk about a candidate you want to hire talk ask share a sales script do whatever and interact with it it might be great it might be decent i don't think you're going to think it's terrible and in fact if you have a sales marketing go-to-market customer success conversation with Sastra's AI, which is trained on 20 million words of content.

34:18It's trained on every tweet I've ever written. It will be trained tomorrow on this video automatically. Everything I say will be ingested into that AI tomorrow. That is going to be better than probably 95 % of the customer support you reach out to and see today, but it can show you that you can do the same. You can do this. Stop saying that this crap doesn't work and go try one that does work and start with us. It's free. Go to saster.com or saster.ai or go to saster.ai. It's really the same thing. And click on AI mentor at the top. It'll bring it up. Ask any of your questions. Pretty sure you're going to think it's, you may think it's, we have folks that are on this all day long.

34:54It's a little, it's a lot. Okay. Asking questions all day long about their teams. We have folks that come and go, 95 % of folks say it's pretty good. So try one that works before being such a Debbie Downer and a skeptic. And then a couple last points here. And I think the second one is the most important. And a lot of sales folks are either struggling with this in one way or the other or just starting to adapt to it. But the reality is almost every VP of sales and CRO I work with wants a leaner team now. Now, last year, you could see this with CEOs. it started it started pre-ai people thought elon musk was crazy when he bought twitter and laid off two-thirds of the company he probably had no choice because it stretched him financially at the time and twitter was pretty unlean just like everybody was everyone was unlean in 2021 everyone had twice as many employees per dollar of revenue than they have today people are twice as efficient as they were in 2021 and people thought elon was crazy maybe elon is crazy i'm not here to talk about politics or other things the guy is pretty successful but he might be crazy Maybe everyone in tech that's successful is crazy.

36:03But it presaged what was happening. And last year, then the public markets put pressure on folks. So folks had to get leaner, right? And at first, CEOs, in some cases, were reluctant to do layoffs that they didn't want to do or to shrink teams because they wanted the kumbaya days of 2021 to last forever. But going into 2021, every CEO I know wanted a leaner team. No one wanted B-folks anymore. No one wanted complainers or folks that took three weeks to get something done. Just CEOs were done. But I found sales leaders were the most reluctant to have smaller teams and marketing leaders. A lot of CMOs still needed 10 folks to run a campaign, and they needed all of their agencies.

36:42And a lot of CROs were stressed that without enough capacity, they could not hit the number. In other words, to go from 50 to 100 million, I need at least 100 sales reps. That's the math. 500K in capacity for reps. I need better have 100 reps or I'm not taking this job, right? You better go raise some more money. Even now, I think everyone has gotten religion near that they want leaner teams. They are tired of folks that don't crush it in sales and sales jobs are harder. So just be aware if you're still looking back on the good old days of these massive teams and not really knowing the product working, no one wants this anymore, not even VP Sales Heroes.

37:23Okay, this next point is probably the most important one I want to say to GTM leaders. And then we'll open up to questions. It's calmed down a little bit. But certainly the first half of this year and late last year, the vibe on LinkedIn was, it's not working. Outbound doesn't work anymore. Everything's harder. SEO doesn't work. Nothing's working, guys. What do you guys know that's working? Because nothing works for us. our terrible text messages to folks aren't responded to anymore our generic emails with 11 fonts and four colors um with with the the talk about customers that aren't even in your industry don't work anymore it does it doesn't work um hiring the night the 20 year old uh sdr with zero training sending a thousand emails doesn't work woe is me nothing works it all works again look at the leaders in ai and ai b2b they are doing webinars they have sales teams they have they may have one sdr human and nine sdr ais but they're doing they're doing outbound okay they're doing outbound they're doing events they're doing field marketing they're doing demand gen they're doing multi-touch they are doing s content they're doing content marketing they're doing video they're doing all of it because all the old plays work just the playbooks don't.

38:44The playbooks don't. And so, especially as CEOs, you've got to be just more... It's always been the number one risk hiring a sales or marketing or customer success or any GTM leader of hiring someone that just wants to bring the playbook from their last company. It's almost never worked, especially if they worked somewhere much bigger, but it works even less good today. Even less good today. I know less well. Less good today because those playbooks are just stale. The plays work, but they have to be run differently. They They have to be run more intelligent. They have to be run with AI. They have to be run at scale.

39:16Everything has to be trained. And so don't stop running the plays, folks. Don't stop showing up. At the end of the day, you have to, one way or another, you have to build awareness for your app. And even if your app has massive viral pull or word of mouth pull, like a lot of apps, you need multiple touches. You need to remind things. Why is Sam Altman everywhere? That dude is everywhere. Okay. And OpenAI is the most successful startup of all times. At many levels, it's because multi-touch works. It really helps to show up. And a lot of the most successful, Anthropic, OpenAI, these folks, they're there one way or the other.

39:56They're all over the place. They are present because it works. And they are doing events. And they are doing webinars. And they are doing marketing. And go to the hottest AI companies and just calmly look at their marketing site. You're going to see all the old plays just often done really well for the AI age. So don't use the old playbook, but don't not use the plays. They all work. And finally, we hit this one. I know I've said this too much, but it's just not enough. Folks, listen, there is no interest in classic SaaS companies from VCs growing at pretty good rates. If you're growing 80 % at 20 million or 70 % at 50 million, it's not cool, dude, but no one's going to fund you.

40:41Nobody. And actually, it's worse than that. And maybe I'll end on this. It's worse than that. And this one took me a little while to figure out. We talked about it a lot on 20VC this week, but not only are VCs not interested in a company at 20 million growing 80%, there's something much worse. And this is just, I wish it wasn't the case because I don't have any silver lining here. private equity firms aren't interested either. And there used to be from 2012, 2013 until 2023. So there was a decade where if your growth was decent, but not great in SaaS, but your burn rate was low and your NRR was high, maybe VCs wouldn't touch you, but a private equity firm would come in and buy you for six to sometimes 10 times revenue.

41:20You'd get to 20 million revenue growing, say 50%, 60 % and cashflow neutral. Look, no VC was going to fund you there, but a private equity firm might buy you for 150 or even$200 million sometimes. I don't see any of those deals. They've disappeared because private equity isn't immune to the fact that public SaaS companies have seen growth decay, that NRR isn't sticky, that new AI vendors are putting the old guys at risk. So PE has disappeared and DCs are flocked to hyper growth AI companies. And this may or may not change, but at least don't live in a dream world where the next round, you think the next round is going to come because growth is pretty good.

42:02It won't. If you have any doubt, we got the numbers. Go to sasterai.ai and click AI VC at the top. And literally we added a new benchmarking. It's our third tool there. Upload your latest investor update or board deck or VC pitch. We will tell you the exact odds you get funded, the exact odds. And if you don't like it, don't shoot the messenger. It's based on all the recent data, 5 ,000 rounds and more. And I talked to way too many founders that think they're going to get funded in B2B and they ain't. So just at least find out we built the tool. It's benchmarking. It's cool. And thanks everybody.

42:36And Amelia, do we have any questions we want to get to? I know you got to run in a minute. Yeah, I got to run in a minute to go talk to Snowflake, but what's your opinion on how do you start to thoughtfully introduce AI SDRs to the sales team without scaring off the existing strs slash sales team yeah and uh literally i was funny i was at um it's funny i had i was dealing with this yesterday so i was at the company meeting for a company invested in called mangle mint that is um sass for salons and spas and doctor's offices great company great great co great culture people were just so excited at their all hands and this ceo and i are really close he said and i had to do a presentation it wasn't like this but it was kind of where agents going.

43:19And he asked me, just do me one favor. Don't scare the SDRs. He said, don't, don't scare them with all this stuff. I'm like, okay, I won't. But I actually, I'd already had lunch. I sat down at tables with all the SDRs. So I'd already actually had the conversation with SDRs. They understood that the, the best, this is the best have as more important a role as, as the rest and the others don't. And the VP of sales sat down with me and she gave the same message. She's like, we're aggressively in on all these tools and we're growing. We're growing triple digits at eight figures in revenue. And this is the future.

43:56We have to embrace it. So look, if your SDRs are going to quit because of AI, they're going to quit anyway. And the tenure of an SDR is very short. Just be clear. We need everybody that can perform. And it was funny. We were sitting there at lunch with the SDRs and one of them was one of the best ones on on on marxelle's team i'm sitting next to her she's already got her laptop up she's she's scanning a salon that she's doing outbound to during lunch okay she's literally doing true outbound research during lunch she's got a job forever the sers that just want to run random emails and never learn the product don't so i think this is not we're past the point where you got to worry about scaring the team be kind um make sure that everyone that crushes it be clear to folks that everyone that crushes it has a role.

44:43This is the thing. You need everyone that is A-tier on your team. That hasn't changed. And it's even harder to find the A-tier folks. But if folks don't want to adapt, they won't have a future. And I think you're better off being straightforward with them. So just do it. Bite it off. And here's the other thing. So many folks have learned it. We've learned it. Here's the other thing, the reason it doesn't matter. As soon as you actually roll out the tool, someone's going to quit. it. This is what every company I've invested in has had the same story. Even at Saster on our little team, we rolled out a tool called Momentum for AI or from attention.

45:17They're great too. Even our little team, the day we rolled it out, someone on our sales team quit. The day we rolled it out. Why? Because now all his actions, all his data, we're going to show up in real time in a report and in Salesforce. You couldn't hide. You couldn't pretend you did five calls this day when you didn't. You couldn't pretend you did it. Many, many stories when you're out there's tools, somebody quits. It's all for the best. The truth is it's all for the best. We got to get out of Kumbaya land because this is a new high growth world. You got to be a part of it. Yeah. Related question.

45:50How much should we be estimating for costs to invest per year in AI to get started? It's a good question. Yeah. Okay. What's the cost? Listen, it's a great question. And I think it's even better than it sounds. I've written this up. Saster is tiny, but here's kind of a... I'm going to write a longer article on this next week. We spend maybe$10 ,000 a year on Salesforce because we're a tiny team. Maybe we spend a little more. And I've been a Salesforce customer, good God, for 20 years, guys, since I was 16. I've been a Salesforce customer for 20 years. First piece of SaaS app I ever purchased, for real.

46:30I never paid for anything before Salesforce. But we spend maybe$10 ,000. Notionally, we spend$500 ,000 on our AI agents across these 21 agents,$500 ,000. Think about that ratio for a minute. There's so many learnings in that ratio. There's so many learnings in that ratio. It's why Salesforce has to own AgentForce. They have to win. And it's why HubSpot has to win here. Okay. But we are spending far more on agents than we are on CRM. So that's a meta thing to think about. The second thing to think about is these apps that need to be trained with forward deployed engineers and work. I don't think very many of them are less than$30 ,000 or$50 ,000 a year.

47:11And a lot of them actually try to kind of have a price point that's approaching$100 ,000. like 60k a year base base and then 20 or 30k they want you to pay for the forward deploy engineer in the training sometimes they include it sometimes they charge for it it's whether they do or don't it ain't free to do it right for me i would certainly subsidize it if i were a vendor but it costs that amount like having a really great technical resource help you train your ai for a couple weeks that ain't free it's pretty pretty damn expensive so and this relates to meta issue you've got to invest the time.

47:47And there's a reason these apps cost 50 to a hundred K. They are a lot of money for you. Be wary of super cheap apps. Be wary of super cheap. It's not that we're not getting there. It's not that everything isn't going to get better, but it's, you can't cut the corner on training. So if instead of 50 grand a year, you're buying a solution that's, that's$500 a month or$50 a month. I'm not saying it's not going to work, but you're going to have to do even more training. You're like, you better take on a massive amount a burden to train this app because you're not getting the benefit of the forward deployed engineers and all the training, the tuning, the warming, and everything the vendor does.

48:20There's no shortcut here. There is no shortcut here. So it is an existential issue that this will change over time, but right now the agents just can't train the agents themselves the way an FDE does. So it's tough to get away for less than 30, 40, 50K for any of these tools really when a month of training is required or at least several weeks.

48:42all right so thanks everybody and uh we'll keep this conversation going and let's go learn from snowflake thanks guys you didn't create a startup to run a small business let salesforce help you connect data automate busy work and empower employees on the only platform you will ever need no matter how big you get with smarter ai and built-in collaboration tools like slack which we use and you use, the sky is the limit. Learn how Salesforce works for startups at salesforce.com slash SMB. That's salesforce.com slash SMB.