Protect the Hustle | A SaaS Podcast
00:36:30 · Doug Pepper, Andrew Davies
[00:36:30] S2: Yeah, I will say ever because these things tend to happen every ten to fifteen years. And so I think there's a chance we get back, but not anytime soon. The anomaly is not now. The anomaly was the last two years. And we got into a place that was unsustainable and hindsight's twentytwenty. We should have all recognized it. But the definition of a bubble is that we don't. And all of us collectively in the venture industry and otherwise lost sight of the fact that we were in unsustainable territory. If you just look at the data, look at the five year SaaS revenue multiples, five years pre pandemic and ten years pre pandemic, largely those numbers were five times one year out ARR or revenue. And we're right at five times now. So we're just about at the long term averages for valuation today. That would suggest we're at the normal place. My own opinion, by the way, is that we've overcorrected. Why? Because I think this market is way more interesting than it was five and ten years ago. The markets are bigger, the companies grow faster, and I think this is a more core industry than it ever was. But should we ever get back up into those, you know, average 20 to 50 times ARR? No. Could we go from five to seven or five to 10? I think we could. And so I think things are better from here. I don't know when. But, again, I don't think we go back to what we saw in 2021 anytime soon because that was that was unrealistic. [00:38:02] S1: Fantastic. Doug, I've really appreciated to get your thoughts on this. Thank you so much for taking the time.
00:38:02 · Andrew Davies, Doug Pepper, Andrew Davies
[00:38:02] S1: Fantastic. Doug, I've really appreciated to get your thoughts on this. Thank you so much for taking the time. [00:38:06] S2: It's been a lot of fun. Thanks for including me. [00:38:10] S0: A huge thank you to Doug for all his valuable advice. Now you're set up to thrive in 2025. Today, we talked about what makes the current downturn unique, becoming a wartime CEO, the three metrics to focus on for continued success, how to survive to thrive in 2025, and is this the new normal? Make sure to give Protect the Hustle a five star review and tell us what lesson Doug taught you from today's episode. Thanks for listening. Subscribe to and tell your friends about Protect the Hustle, a podcast from Paddle Studios dedicated to helping you build better SaaS.