The image above has been freewheeling around my head for months now.
Is this where we’ll end up as “agents” remove our critical thinking? And Claude has told us we’re amazing once too often?
I don’t want to lose the little true cognition I have. And yes, thinking and chatting is the lifeblood of our working lives....
So - let’s get into it - my opinions follow...
Vile Rumour & Gossip
Recharge bought Skio on the cheap - Skio were doing $33m ARR, and got bought for 3x revenue. 2 years ago they’d have gone for 10x at least. Recharge has become largely dominant in their sector (except for Shopify’s own limited subs service), and Skio were better at lots of the elements of the Recharge toolkit. Customers are a bit sad of course, they know how this ends (more on that later). SaaS valuations are really screwed right now, and what that means for pricing, salaries, all of it - we really don’t know yet.
The murky beginnings of Rezolve.ai - If you’re in the right community groups (or on reddit) you’ll have read about the dark arts of Dan Wagner’s not so new startup. The beginnings are largely unimportant now though. Out of a SPAC they’ve acquired Crownpeak & Advanced Commerce among others, including three search tools and a bunch of customers. And - $750m burning a hole in their pocket to be spent quickly.
Murky or not, these are real customers with SaaS that is deeply embedded (some have had Fredhopper for 15 years)... so keep a close eye people, the agentic promise is clearly fluff for now. Oh and yes i asked them for a chat - I am being ghosted.
Klaviyo’s CRM carcrash - A few weeks ago the CF community witnessed a new AE at Klaviyo sending a “hello, can we catch up” email to 50 accounts who had mostly left their businesses. Oh, and it came out of Salesforce... :) Still funny 10 days later.
Adyen & Talon one - what does it say about SaaS?
This transaction was very early in the cycle that SaaS has known. Talon One has had real momentum for a while now, and hadn’t actually raised that much cash... so really were in control of their own destiny.
I wonder if this has happened now because the thinking is that valuations will only get worse? I can’t see that sales momentum is an issue, the team are excellent and the product positioning has been strong.
The deal presents opportunities for others though. This is Adyen’s biggest acquisition, and they won’t be able to resist fiddling with their new toy. Inevitably, Talon One’s momentum will slow, great staff will move on, and Adyen’s conservative/cautious culture will take over.
Who will benefit? the established “loyalty” players for sure... but there are some bootstrapped and clever types out there. I suspect there will be far more of these deals this year, leading back to suites of SaaS which may never really be bought again....
Are we witnessing the demise of pureplay D2C?
As I wrote a few weeks ago, many D2C companies are spending 20-35% of their total revenues on customer advertising. All with three channels.
In 2005 Heinz (one of the biggest spenders) were lashing out 4.5% of sales revenues on marketing. This has since grown to about 8%, but D2C will never be profitable if they continue to spend at 20%+.
But continue to spend they must for now, because whilst growth is hard to come by, pureplay D2C has to spend big just to stand still. Squeezed by rising ad costs, supply chains, geopolitics and product ranges that do not have repeat purchase built-in - we worry for the sector itself.
Anyone up for opening some shops?
How we love the lion’s den
I got to witness a delicious 10 minute f2f sales pitch & interrogation last week. A senior architect from The Gap and the founder of a server-side tagging business had a really intense chat where deep knowledge was tested, eye contact maintained, subject-matter expertise displayed by both - and ultimately the test was passed, and a next step agreed.
It’s sad in so many ways that all these relationships now start with a zoom call. Face to face is ultimately faster and much more effective, and I know both salespeople and clients would rather start do it in person.
Perhaps in an AI world buying and selling will be the last bastion of critical thinking before we all turn into blobs on lilos :)
Anyway - more focus on these for the rest of the year from me, and more events in the Autumn. Happy Q2 to all and we hope you get the commercial outcomes you deserve (and not a penny more). And - a shout out to Tomo for the support with insults... Temu is a doozy.
Jamie
