Rivo’s Post

In April 2023, growth rates across Ecom SaaS took a MAJOR hit. After a brutal 10 months, I'm finally seeing a steady rebound across my userbase of over 2,000,000 Shopify app installs. Here’s what I’m seeing: CONTEXT: In the chart, we're looking at the month-by-month uninstall rate (Uninstalls + Store Closures / Installs). In April 2023, this number skyrocketed after a steady decline over the previous two years. (This graph is skewed towards SMB, so it doesn't tell the full story - but close enough) For 10 months, growth was being dragged down by this shift, making it extremely difficult to gain any real momentum. In the past few months at Rivo, we’ve seen this return to (somewhat) normal growth: ↳ March: 7% MRR ↳ April: 4% MRR ↳ May: 4% MRR We’re back in a sense of positive growth - but the landscape is very different to pre-April 2023. THE REALITIES I'M SEEING IN 2024: 1. Mid-market deals are slower and much more price-sensitive. In the last 15 months, we’ve moved from being primarily SMB-focused to now having 42% of our revenue at Rivo come from brands on Shopify Plus (Our ICP) Deals are still closing, but are taking much longer to get over the line. I'm not interested in fighting competitors solely on price, but it's MUCH more of a consideration today for brands than in previous times. 2. If you're not innovating on product and price - you’re in big trouble this year. Lots of Ecom SaaS companies absolutely crushed their numbers for years with truly amazing sales & marketing motions. I honestly wish I could replicate how they executed these playbooks. The problem is that there was barely any innovation on their product or price during this time. If your product has fallen behind and your pricing hasn’t readjusted to the new levels - your lunch will get eaten by a hungrier competitor willing to get in the trenches in Slack channels with brands. Every month I talk to these founders coming up and it's amazing to see the traction they are getting. This is happening right now. 3. Still tough to make the numbers work for heavily funded ecom SaaS I feel for the majority of ecom SaaS companies who heavily raised VC during 2021-2023. I don't think investors or founders were expecting the slowdown to appear at such an alarming rate. The numbers in the pitch decks are thrown out the window today. I'm a big fan of moving upmarket but only a small amount of verticals can justify charging over $15K ACV deals today. (Email, SMS, ERP, etc) Although signs of bouncing back are there - today's math works out as follows: ~18,000 Shopify Plus stores and most likely an ACV ceiling of $12,000. Small TAM / Smaller ACV / High CAC = tough business. TAKEAWAY: Growth is still tough. But not as mind-numbingly tough as April - Feb. My hats off to you if you crushed it through that time period - the majority I know did not (including myself) If you're still running the old playbook - it might be time for a change.