Gurley describes cloud-connected workflows from business to consumer through apps as unexploited white space across verticals.
“Once it's in the cloud, they connect to Zillow, they connect to rent.com, they push the listings out, they communicate with the end user of the apartment, and so this workflow that starts to be connected from the cloud to the small business, to the consumer, to the smartphone app, that's all white space in a bunch of different verticals.”
Gurley predicts the next ten years will involve removing enterprise technology and moving systems outside via SaaS.
“I say we spent forty years cramming technology into the enterprise. We're going to spend the next ten yanking it out. It's just so wholesale that you're moving systems outside.”
Gurley says industry spent forty years putting technology into the enterprise before SaaS reversal.
“The second thing is SaaS. I say we spent forty years cramming technology into the enterprise.”
Gurley explains why targeting sales instead of HR made Salesforce wildly more successful than their HR SaaS company.
“the sales executive has a green light on any purchase in a company. The HR executive does not. They had a product where you could put it on a credit card.”
Gurley explains his HR SaaS company struggled because sales executives can buy freely but HR requires CEO approval.
“Our product required Yeah, PO and approval of the CEO for a less strategic function in his company, right? And so, know, learning learning moment.”
Gurley cites twelve-year bull run and extreme SaaS multiples as major IPO incentives.
“Add into that a roaring, screaming public market that's been on a bull run for, what, twelve years? And multiples in the public markets, especially in, the SaaS world that are out of this world.”
“And so now all of a sudden, the buy side's asking SaaS companies about net dollar retention, about long term operating margin, about whether their free cash flow is greater or less than their net income, about SBC as a percentage of free cash”
“And so what really values companies, you know, it's typically a discounted cash flows. And so now all of a sudden, the buy side's asking SaaS companies about net dollar retention, about long term operating margin, about whether their free cash flow is greater or less than their net income, about SBC as a percentage of free cash”