The $10T Business Software Opportunity

I was catching up with my good friend, Mei recently and she brought up the topic of Coinbase mentioning how some of the early employees are making not millions, but tens of millions as part of their upcoming IPO. When I first heard this number, I was startled because it sounded too good to be true, but later when I learned that Coinbase is valued at ~ $100B, I found myself nodding my head while remembering the Facebook IPO.

The prevailing wisdom in the investing world is that consumer markets are bigger, grow faster than B2B software markets and hence likely to bear more black swans – Facebook, Uber, Coinbase etc. Moreover, unlike consumer businesses, there’s no viral growth or tornado in SaaS. It’s almost always slow and steady growth, taking five to eight years to hit the first $100M ARR mark.

However, I wonder if we are at an inflection point in SaaS, especially in Business Software that it won’t be unusual to find Snowflakes, more often, let’s say once every six months if not once every few years. Case in point: UiPath ($35B), Databricks ($28B) and Stripe ($100B). And in business software alone we have Canva ($15B), Airtable ($6B) and Figma ($2B).

I believe that SaaS as an industry has matured over the course of the last two decades and just entered its growth phase. Being in SaaS today is like being a painter during the renaissance.

To expand on my bullishness on SaaS:

  • The last two decades of software adoption was primarily fueled by tech companies. In the next two decades, almost every business (from SMBs to Fortune 2000s) will adopt SaaS-based solutions.
  • Thanks to self-serve, product-led GTM motion, we now have a handful of SaaS companies who crossed $1B in ARR and growing ~30% annually with +100% net retention rates (thread).
  • Horizontal application software companies have reached a point where their scale and growth rates match some of the best-in-class consumer internet companies (e.g., Canva has $500M in ARR growing 130% annually with 55M monthly active users, Calendly has 10M monthly active users growing 100% annually)
  • The COVID pandemic has only accelerated the shift to digital, changing the way people work, do business, interact with their friends/family etc. All this means software will continue to eat the world.

While these theories nice to hear, I wanted to run some numbers to explain the real $ opportunity.

(ps: thanks to daniel levine for suggesting this idea)

No. of workers in the US160,000,000170,000,000source
The average annual salary of a US worker$51,916$60,000source
Business software spend as a % of salary (modest estimate)10%
Total potential business software spend in the US$1.02Trillion
The total market value of business software in the US alone (assuming a modest 10x revenue multiple)$10.20Trillion
10,200unicorns (Figmas)
1,020decacorns (Slacks)

Even with the most conservative estimates, we’re looking at a $1T of business software spend in the next decade or two. Yes, that’s 10 trillion (with a “t”) dollars of market opportunity!!

This means, we are going to see a few thousands of unicorns (aka Figma), hundreds of decacorns (aka Slack) and a handful of centicorns (aka Adobe) at the very least.

As adults, we spend 50% of our total waking hours at work. It shouldn’t surprise you that B2B software markets are as big as consumer markets and are poised to more black swan outcomes in the coming decade.

What’s the mood in the valley like?

After my recent tweet storm on SaaS vs COVID-19, many VC/Founder friends of mine from India, Singapore, France reached out to me asking how Silicon Valley is reacting to the COVID-19 crisis. I thought I’ll write a short post about what I’m seeing/hearing from investor-founder friends in the startup land for the benefit of global audience.

Week starting 6th of April 2020

Key highlights:

  • Starting to see hiring freezes and layoffs, full list can be viewed here
  • Bridge rounds are making noise, mostly debt and very rare, e.g., Airbnb
  • New investments in the online economy (e.g., Notion) but not in the offline (or the face-to-face) economy
  • Hearing murmurs about VCs pulling back term sheets, but haven’t seen any concrete news. Also remember, Term Sheet is a non-binding document so 🤷
  • Public markets are in total denial, DOW is up by 7% as the week started, despite 25% unemployment and GDP expected to fall by 30%+
  • Most VCs I spoke to think it’s a falling knife with biz down across every industry except online retail and grocery stores. Total credit card spend down by 40%

Overall, investors are bearish about the next 6-12 months but bullish about the next 5-10 years post-crisis.

Investor sentiment is likely to change if:

  • We smash the curve and lift the lockdown with a coordinated COVID-19 control and prevention protocols (e.g., wear mask all the time, thermal screening etc.)
  • Start to find a cure for COVID-19 (drugs or vaccine)

Not yet sure:

  • Will it be a V shape recovery or U shape?

Hoping for the best and hoping for a miracle 🙏

The encyclopedia of Indian direct-to-consumer (D2C) brands

For all newbies, a direct-to-consumer company OR a digitally native vertical brand (DNVB) is an online first/ online only product offering that’s maniacally focused on customer experience. These companies generally start with a niche and directly sell to consumers via their online website or their own offline stores. They take pride in creative products with great quality and reasonable prices. As they control their own distribution and thanks to subscription economy, they enjoy great gross margins with high customer lifetime value (CLTV).

In the last few years, I have become a huge fan of these brands. Today, I wear a pair of Allbirds wool loungers to work, VAPH loafers for occasions, John Jacobs glasses when I am working, Patagonia Better Sweater Jacket when it’s cold outside.. enough about me!!

I like these companies because, they are obsessed about their customers. I strongly believe companies who care about their customers and do whatever it takes to make them brilliant are the ones who succeed in the long run. This is the same reason why I love AmazonBasics and I so wish Amazon launches a bank and an airline.. in fact I wouldn’t be surprised if somebody somewhere is already writing a plan 🙂

As I kept digging deeper to find such brands, I found there are many hidden gems in India and discovering them takes time – I first found VAPH shoes on Flipkart when I was browsing through shoe listings and came across Eyecandy leather wallets on LBB. I decided to fix this problem and was inspired by Andy Dunn to create “The encyclopedia of Indian direct-to-consumer brands (aka – DNVB – digitally native vertical brands)”

I hope you will find this list useful and further contribute to the list by suggestions names.

Also, if you are a founder building a direct-to-consumer company – I’d love to help you in anyway – product/sales/recruiting/funding, so feel free to reach out to me at [at] 🙂

Last updated: 14th July 2019


  • Andamen – luxury shirts with an Indian touch
  • Alpha – curated shirts and chinos
  • Aristobrat – feel good basics



  • Chomp – packed snack boxes



  • Eyecandy – everyday objects, everyday lifestyle






  • John Jacobs – premium designer eyeglasses and sunglasses


  • Korra – sustainable jeans and jackets




  • Nordlich – nightwear, and loungewear
  • Nicobar – organic clothing for men and women













When a brand takes over the category

“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” – George Bernard Shaw


Unreasonable men and women are the category creators, you can see their Utopian vision in the products they build. Building a category creator is a long, tiring but rewarding journey. When I asked Pat Grady (Investor in $HUBS, $NOW) about HubSpot’s journey, he said that during the initial years, almost every quarter was a slog. The real hockey stick growth started after 5 long years of founding.

Sales cycles tend to be longer than a traditional SaaS company because your marketing and sales teams are first educating customers about your philosophy, before talking about your product. If that was not enough, you run into product adoption challenges as well. Your solution is a new way of working for customers. You’ll need to invest heavily in educating your customers. With high CAC (Customer Acquisition Cost) and low LTV (high churn, low lifetime value), it’s very hard to build a sustainable SaaS business.

Perhaps, it’s no surprise that even a company like Apple had to go through this.


They say, when the going gets tough, the tough get going. The ultimate return for a category creator is when it’s “Brand” starts taking over the “Category”.

Inbound Marketing vs HubSpot

HubSpot coined the term “inbound marketing”, they wrote a book, built – a community for inbound marketers, launched Inbound Marketing certification to educate the world about this new category. It took time, money, and effort. If you look today, people directly search for HubSpot more than Inbound Marketing on Google.


CRM vs Salesforce

Salesforce was not the first CRM, but they were the first ones to make CRM available on the cloud. When they went public, their stock ticker was $CRM. They did that to raise awareness among the public about CRM software. If you look at Salesforce’s performance, they really started taking off in 2010, the same time when their brand was taking over the CRM category.


eCommerce vs Shopify


Taxi vs Uber


Food Delivery vs Swiggy


So has your brand taken over the category yet? Until then, keep fighting 🙂

Thanks to Tejaswi Raghurama for reading drafts of this.

Are You Baking Magic Into Software?

It’s been 5 years since Marc Andreessen said Software is Eating the World, a lot has changed since then. Software still seems to be eating the world.. look at top valued private companies list, almost every company is/uses Software to solve customer problems. 

Unlike 2010, building software is much today, so is acquiring customers and making money. If you look at this picture below, there are over 1000 software companies just solving Marketer’s problem.

Marketing Tech landscape these days…HOLY COW!


So, if you are a founder/PM building Software, how do you thrive in this war? Bake magic into your software. Didn’t understand? Let’s look at the evolution of software..


Software 1.0: Buying 1.0 software in 80-90′s is like buying insurance. This type of software is designed to improve efficiency of the business. It made users data entry folks, while Buyers/Managers enjoyed viewing/valuing Reports. CIOs are the buyers, desktop/ on-premise software with multi year contracts and huge downtime when it’s time for software upgrades. 

Software 2.0: Also known as SaaS, software that sits in the cloud – there by faster product improvements and relatively cheaper when compared to 1.0. This is the same time, consumer internet came into picture (Amazon, Yahoo etc.) and users experienced internet for the first time and everyone loved it. Software 2.0 was built keeping user’s workflow and users played a great role when it comes to buying software. With pay-as-you-go model, easy sign-up process SaaS companies enjoyed great revenues. But there was one problem and it is becoming huge one. Commoditization of Software.. remember the Marketing Landscape diagram? same is happening with Project Management tools – Asana, Projectplace, Trello, Jira etc. and a 100 other tools – everyone solving same problem with very little differentiation. Zendesk vs Freshdesk, Optimizely vs VWO, Slack vs Flock.. I can give many such examples. 

Software 3.0: If you read this year’s Founder’s letter written by Sundar Pichai he mentioned the word AI/Machine Learning 10 times! That’s how much Google believes in data network effects. If you look at Google products – they baked magic into their products – google search learns from you, so does google now – google photos automagically organizes your pictures & YouTube recommends you new videos based on your watch history and smart replies in their recently released Allo messenger are FTW! 

Software 3.0 is the new SaaS, software that learns from your usage and personalizes how you experience the product next time when you login. Software is getting better every time you spend time on the app & perform certain actions(events), that means intelligent workflows for the user. And thus making it incredibly hard for a user to churn or stop using the software. Software 3.0 can’t be displaced so easily by products that have similar features or lower price as Software 3.0 has a unique advantage with “proprietary” data they gathered from usage. 


So, if you want to build a successful software – ask yourself how can I bake magic (AI/ML) into my software? 😉

Seeing the glass half full

I consider myself extremely lucky for going to BITS Pilani – the institution which created some outstanding leaders in this world. BITS network is so strong that you literally can reach out to almost anybody for an advice – no one would say no to you! 

So, I whatsapped of my mentors Phani for time and our breakfast meeting became a 4 hour long conversation which definitely had significant impact on my work & leadership style. 

One of the best advices I’ve got from him was when it comes to working with people, see the glass half full – no one is perfect, everyone makes mistakes. When you start seeing the glass half full – you seem to notice how amazing every one around you is. You really start looking at things people are doing well and try to develop respect, empathy and start learning from their examples. 

Simple, but amazing right? Everyone is unique, what makes a great leader is the ability to learn good and ignore bad every time you come across any new personality.

Phani, I thank you once again! 🙂

I don’t wanna do your dirty work. No more.

With the plethora of startups, everyone is looking for a developer or a designer. I get lots of emails asking for referrals, sometimes from startups and sometimes from folks who are interested to join startups.

A bad way to ask for a referral – Hey Sudheendra, do you know any good rails developer? We are looking to hire one immediately, I would appreciate it if you can connect me with someone.

A good way to ask for a referral –

Hey Sudheendra, Do you know Vivek? With 2.5 years of experience in PHP he seems like a good fit for our *next big startup*. Thanks to LinkedIn, I noticed you are his 1st connection. Would you mind connecting us?

Hey, LocalOye is hiring Software Engineers. I really like what they are doing and the founding team is just awesome. Would you mind introducing to the founders?

Today, I’m launching to help startups find amazing talent and vice versa. I’m sure you receive lots of useless emails every day, still you open and read each and every email (unless it’s spam/junk). Why not subscribe to this amazing newsletter which sends you 5 really interesting startup job opportunities once a week? Even if you are not looking for a job, this might help you refer your friends or sometime in the long run. Don’t tell me later I didn’t know *That Amazing Startup* was hiring, go now and subscribe –

PS: If you are a startup and hiring for a great position (a really great one)? email me at

Two questions to ask a startup job applicant

  1. What is your current compensation (split it into basic, take home and benefits)? Do you have any salary expectations?
  2. If you are hired, when would you be able to start? 

If you are a startup and looking to hire someone, ask these two questions before starting the interview process. Saves lot of time!  I spoke to many candidates who worked at Amazon/Flipkart/InMobi/*ANY BIG COMPANY* and willing to join startups. But the actual reason is they are looking for a salary hike. It’s good, everyone has their own commitments.

Also some of these companies have this policy of *notice period*, for many it’s 15-30 days, while for some it’s up to 90 days. No point in talking to these folks if you are looking for someone who can join immediately. 

PS: We at Exotel are hiring techies, and yes we pay well! Come, join us –