How to Drive SaaS Hypergrowth

Your customers' network is a low cost, high impact way to drive SaaS growth. But how do you harness the power of positive network effects? Positive network effects occur when the value of your tool increases as your user base grows. Like LinkedIn... it becomes more valuable as more professionals join the platform. For SaaS companies, larger networks lead to several competitive advantages: – They're more trustworthy – They entice advertisers – They encourage referrals and word-of-mouth – They build more unique user-generated content – They increase retention To activate these effects, start by mobilizing your current user base. There are (at least) five proven strategies: 1. Increase reach with shareable features Take Pinterest as an example. Users can create shared 'boards' to collaborate on projects. This either re-engages current users or prompts new sign-ups when boards are shared. 2. Drive referrals with growth loops Consider DocuSign's growth loop. Every document sent for signature serves as an introduction to the platform, potentially converting recipients into new users. 3. Improve product quality with user-generated content GitHub leverages user-generated content to improve product quality. Developers contribute to existing projects and end up hosting their own, creating a self-reinforcing cycle of engagement. 4. Drive acquisition with incentives Airtable incentivizes referrals by crediting $10 to your account when you invite new users. This simple yet effective strategy turns every user into a potential brand ambassador. 5. Re-engage dormant users Venmo ensures each transaction appears in a public feed, prompting likes, comments, and reminders that bring users back to the app. Bonus: you can (and should!) combine multiple strategies. LinkedIn, for instance, uses referrals, re-engagement tactics, and registration incentives to create a powerful network effect. By harnessing the power of your user base, you can create a self-propelling mechanism for growth that benefits both your app AND your users.

The shift from seats to agents pressures SaaS margins. At the same time, the longstanding practice of getting enterprise customers to pre-commit and also prepay for functionality they may never deploy will get harder as CIOs look to free budget for their own LLM costs. To weather the storm, some SaaS companies have increased prices. This boosts revenue and margins in the short-term but can't be done repeatedly and creates even greater scrutiny over shelfware as procurement teams right-size and shift contracts to "pay as you go." To achieve sustainable growth, SaaS companies need to become hyperefficient at sales and marketing. Here are common ways to do so and who's doing it well: 1. PLG. Shopify and Atlassian exemplify efficient go-to-market based on product-led growth with free trials, low-friction upgrades and upsells. Their sales teams only need to get involved in the biggest opportunities at the largest accounts; every other step in acquisition, commercial transaction, activation, onboarding, and growth is self-service and automated. 2. Vertical SaaS. Guidewire Software and Veeva Systems are laser-focused on insurance and life sciences, respectively. Rather than casting a wide net, they spear-fish with deep domain knowledge and purpose-built solutions for that industry's specific workflows and regulatory requirements. Guidewire doesn't need to buy Super Bowl ads– their annual customer conference is the Super Bowl for property & casualty insurance executives. Nearly zero GTM effort is wasted– unsurprisingly they're the two most efficient on the list. We modeled Hearsay Systems after both these companies, and this focus allowed us to win incredible market share among Fortune 500 banks & insurers despite only raising $60M in totality. 3. Relocate operations to lower-cost regions and AI. This is private equity's favorite playbook to take costs out of companies they buy. Field sales continues to shift more to Zoom, which means you can hire AEs anywhere. Inside sales contributes a greater % of revenue as PLG motions are established. AI handles top-of-funnel leads qualification and generating marketing content and campaigns. 4. Focus on gross revenue retention. Because of high customer acquisition costs in #SaaS, leaky buckets are margin killers. Use LLMs to help customer success teams analyze product usage, segment cohorts, and identify opportunities to increase value realization. Put in guardrails to prevent sales reps from overselling an account, as doing so only creates churn in the next renewal cycle. 5. Introduce another product line. This only works if your new product has the same buyer as your existing products. Many SaaS acquisition pro formas fail to actualize for this reason, as it's not actually feasible to have the same AE sell both old and new products. Every SaaS company right now needs to double down on one or more of these levers in the AI era.

I spent the last weeks reverse-engineering how AI-natives grow so fast. From $1 to $10M measured in months. Here’s what I learned.. Most use a: - Subscription pricing model - PLG-like GTM motion And, obvious but worth calling out: - They did not hire 10's of SDRs, AEs, and CSMs But also surprisingly... - Very few used AI-tools in their GTM motions So what do AI-natives do to catapult growth? It’s a simple two-step process: Step 1: Obsess over “Immediate and Recurring Impact” + Instant setup & onboarding + One-click integration + Intuitive, self-guided UX + Rapid path to habit-forming daily usage Step 2: Enable users to become your growth engine They designed this in... + Built-in viral loops (users invite users, word spreads organically) + Real-time data infrastructure & mindset (to figure out what works) + View retention & expansion as outcomes, not goals with campaigns Important!: Most AI apps right now don’t require centralized approval and often have freemium starting points, e.g. users can "buy" it on the spot. Now compare this to the classic SaaS-native playbook which relies on an approach around two “reservoirs”: 1. Lead Reservoir Fill it with leads—email captures via content, SEO, outbound, events etc—and “nurture” them. As you grow, marketing must find ever-more leads to hit the next growth target. It never stops, that is... until it breaks. 2. Customer Reservoir This is all about getting renewals, better yet expansions from your champions. It takes time (years) for growth to compound, and most SaaS-natives don’t have that time. For example most CROs are on a 18-month fuse. They want growth now. Important observation, buyers and champions are rarely users. So you are talking to a very different persona (and not one driving adoption on the ground). With that said, AI-natives leverage a very different reservoir: 3. User Reservoir Say per customer there's ~10 users. That means 100 customers = ~1,000 users—several of whom get asked once or twice a year, “What do you use?” by their peers. Users are by definition your ~ICP So that’s not just a lead; that's more likely an immediate opportunity. Key insight: As growth accelerates you gain more users, more uses = more pipeline. In other words, the system start to, in part, fuel itself. We performed repeated scenario analysis on this, using their metrics, over and over again, and the math back this up. This works. The key difference? - SaaS-Natives look at customers as "Logo's" - AI-Natives look at customers as "Users." So maybe the 2026 growth playbook should bring more users into the fold? If you are intrigued and want to dive deeper, join one of our Growth workshops in the next weeks: - San Francisco (At Dropbox) - Chicago (At G2) - Washington (At Pavilion GTM Summit) - New York (At Insight Partners), and - Ghent (At WinterCircus). You know where to go for the 🔗 for the dates and details👇.