Bessemer Venture Partners recently released their "State of the Cloud 24" which included the catch phrase "The Legacy Cloud is Dead - Long Live AI Cloud!" Dave "CAC" Kellogg and Ray "Growth" Rike discuss the report and the opportunities and threats to traditional SaaS companies.

Topics discussed include:

• Social Media Buzz and Sources of "SaaS is Dead"
• Gen AI VC Funding Categories and Sources
• Top Five Gen AI Trends

Trend 1: AI foundation models set the stage for Big Tech’s new battle-of-the-century

Trend 2: AI turning all of us into 10X developers

Trend 3: Multimodal models and AI agents will transform human relationships with software

Trend 4: Vertical AI shows potential to dwarf legacy SaaS with new applications and business models

Trend 5: AI Brings Consumer Cloud Back from the Dead

If you are in a SaaS company evaluating how best to maneuver the risks and/or capture the potential of Gen AI, the Bessemer State of the Cloud report is a great read and this episode with CAC and Growth is a great listen!

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McKinsey recently published a report entitled "Navigating the Generative AI Disruption in Software" that Dave "CAC" Kellogg and Ray "Growth" Rike discuss in his episode.

Some of the primary topics discussed include:

• GEN AI penetration velocity today vs SaaS in the early days
• GEN AI impact on switching from traditional SW/SaaS vendors
• Where will the rewards of Gen AI go
• Impact on SaaS Growth and Churn Rates

One of the most interesting parts of the report and this episode is that expansion growth rates of software will increase for those with embedded generative AI. In addition, the adoption of Generative AI solutions will be spread across three primary modalities of Gen AI software including:

• Native Generative AI Point Solutions
• Broader platforms with embedded Generative AI
• Internally developed Generative AI software

If you are a traditional SaaS company and are looking to navigator the unchartered waters of the Generative AI software era, the McKinsey report and this episode are great sources of ideals and insights.

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What is the difference between the price and value of a SaaS company? How do metrics such as Enterprise Value to EBITDA multiples play a role in this discussion? Dave "CAC" Kellogg and Ray "Growth Rike discuss the topic on this episode of SaaS Talk with the Metrics Brother and cover a wide array of topics including:

• What is a SaaS company worth?
• What is the definition of "price vs value" in the stock market
• Examining Valuation Multiples What They Miss, Why They Differ, and the Link to Fundamentals
• How Cash and Debt impacts Enterprise Value
• EV/EBITDA vs EV/FCF vs EV/Revenue Multiples

An inspiration for this episode was from a paper written by Michael Mauboussin with the title: "Examining Valuation Multiples What They Miss, Why They Differ, and the Link to Fundamentals". You can read the paper by clicking here.

If you are a SaaS professional or even just interested in learning more about how SaaS companies are valued, this conversation is full of interesting insights and details on the concept of SaaS company valuations.

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