The Great SaaS Reset

Hello Studio Fam,

Investors love SaaS businesses because their revenues are stable and recurring. This week we look at the most successful SaaS business in the world, Salesforce, and how the Great Tech Reset is going to impact their business. We also bring you an update from the metaverse (hint: it’s not going well) and highlight three of the most unusual recent startup funding announcements. No tech rundown would be complete without an update on the FTX debacle so we’ve highlighted for you one of the most successful independent journalists fighting the good fight against fraud and deception.

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Salesforce has run out of customers (and execs!)

The Great Tech reset has spared few companies. It now appears that Salesforce, the darling of Silicon Valley SaaS, is facing an unprecedented set of challenges starting with the departure of some of their most seasoned and important executives. No fewer than three Salesforce CEOs have announced their resignations including Salesforce co-CEO Bret Taylor, Tableau CEO Mark Nelson, and Slack CEO Stewart Butterfield.

They might have left because they did their jobs too well: it would appear that everyone who could ever buy SaaS has bought it. Based on Salesforce’s latest quarterly report, customer acquisition costs have skyrocketed. It now takes over 10 years for Salesforce to breakeven on the cost of acquiring a new customer.

While this is bad news for Salesforce stockholders, it’s great news for SaaS startups. Salesforce is not known for being cheap, so Salesforce customers will be closely examining their SaaS budgets and searching for cheaper alternatives. Some companies might find they are paying for duplicative services. For example, Slack customers who also use Google Workspace might realize that Google Spaces (included with Google Workspace) is about 90% as good as Slack. And they’re already paying for it!

Nobody went to the EU’s metaverse party

Despite basic questions about the metaverse like, “What is this?” and “Is that just a video game?” still outstanding, corporations and even governments are willing to spend significant amounts of money to look like they’re doing cool and interesting things. Unfortunately, these investments have not all paid off. Back in October, the European Union unveiled a “shared digital space” for metaverse users to learn and “reflect on global issues.” On November 29, this digital space was used to host a “metaverse gala”. Despite costs exceeding $400,000, no more than six users attended.

SHORT BYTES: Unusual Startup Fundraising Announcements

• Black Sheep Foods raises $12 million to make plant-based lamb burgers
• WeWalk raises $2.4 million to make smart canes for the visually impaired
• Gaia AI raises $3 million to scan forests with LiDAR

Sam Bankman-Fraud: YouTubers doing what journalists won’t

While traditional news outlets have run with bizarrely friendly coverage of the ongoing SBF debacle, some more intrepid citizen journalists on YouTube and Twitter have distinguished themselves with amazing coverage of FTX and interviews of SBF himself. For reasons beyond the comprehension of his attorneys, SBF keeps doing interviews. After shaking and mumbling his way through an interview with George Stephanopolous, SBF decided to keep the mumble party going inside various Twitter Spaces.

If you’re not familiar, Twitter Spaces are basically live podcasts hosted within the Twitter app. YouTube Stephen Findeisen, better known as Coffeezilla, has made a name for himself exposing frauds and spent the last week crashing these spaces to do what he does best. Through roughly 15 minutes of pointed questions, Stephen got SBF to admit he knew he was trading customer deposits. Why is that a big deal? Because it’s against the law.