As the planning season approaches, there's one critical question many business leaders prefer to avoid: **Did you actually gain or lose market share this year?** This isn't about revenue, Annual Recurring Revenue (ARR), or your company's growth rate. It's solely about market share. The uncomfortable truth is that if your company grew 30% last year but your top competitor expanded by 60%, you didn't win; you lost. You're actively losing market share, which often signals a drift from product-market fit, even if your internal reports look positive.

The Downturn Excuse is Dead

For years, companies could point fingers at external factors. In 2022, it was the market downturn. In 2023, "macro impacts" were the culprit. Even in 2024, some still clung to the "downturn" narrative. But now, in the Age of AI, with overall software spending accelerating at a record pace, those excuses have evaporated. The downturn in SaaS and B2B is largely over. If your category experienced one, it's time for an honest self-assessment. If you haven't recovered, the issue likely lies within your organization. Here's what's truly happening:
  • Venture capital is back. Funding is pouring into AI and growth-stage companies with the same intensity seen in 2021.
  • Hypergrowth is back. While often fueled by AI leaders, the question remains: why isn't that you?
  • Software spend is accelerating. Gartner projects enterprise software spending to grow a remarkable 15.2% to $1.43 trillion, making it the largest and fastest-growing segment of the $6 trillion enterprise IT market.
  • Public B2B companies are growing faster again. For many, recent quarters have marked a significant turning point.
  • Next-generation companies like Databricks, Cursor, and Anthropic are experiencing unprecedented growth. Their expansion is truly jaw-dropping.
However, it's crucial to understand that roughly 9% of that 15.2% growth in software spend is merely due to price increases on existing software, which CIOs are already budgeting for. Most of the remaining growth is directed towards AI. If your software lacks AI features or fails to demonstrate clear ROI, you risk being categorized as "low ROI software getting cut" as buyers reallocate their budgets. The market pie is expanding. The real question is: are you securing a larger slice, or are you watching others consume your lunch?

Gartner: Enterprise Software Spend Will Grow a Stunning 15.2% Next Year. But Most Of That Will Go to Price Increases and AI Apps

Growth Rate is a Vanity Metric Without Context

Founders often approach with pride, declaring, "We grew 40% this year!" expecting applause. My immediate response is always: **What did your competition do?**
  • If you grew 40% while your main competitor remained flat, that's a genuine win worth celebrating.
  • However, if you grew 40% and your competitor grew 80%, you are losing, and losing fast.
The math is simple yet brutal. If a competitor with $50M ARR grows 40%, they're adding $20M in new bookings annually. If you're at $10M ARR growing 50%, you're adding $5M. Despite a higher percentage growth rate, you're falling further behind every single quarter. This underscores a vital point: **If you're not growing at least as fast as your competitors, it's an internal problem, not a market one.**

The NRR Zombie Trap

One of the most perilous positions for a SaaS startup today is becoming an "NRR Zombie." An NRR Zombie is a SaaS company that lost its product-market fit after the 2021 boom but possesses enough revenue and a sufficiently high Net Revenue Retention (NRR) to merely sustain itself. Typically, these companies range from $2M-$20M ARR, are not losing money, and maintain 90%-100%+ NRR with relatively stable retention. While this might sound acceptable, these companies are not growing. They aren't acquiring new customers; they're simply existing. They often hide behind their NRR figures, convincing themselves they're performing adequately because customers aren't churning, and revenue is stable. However, they overlook crucial realities:
  • Competition has evolved significantly over the past three years and may have surpassed them.
  • High NRR can mask substantial underlying problems. With 150% NRR, a company can "hide" a mere 20-30% new customer growth, preventing it from appearing as a revenue decline.
  • The team may be too exhausted or demoralized to genuinely re-engage and compete effectively.

What to Do If You're An NRR Zombie

The Honest Questions You Need to Ask

Before finalizing next year's strategic plan, gather your leadership team and address these questions with absolute honesty:
  1. Are you gaining or losing market share? Don't just ask "how fast are we growing?" Instead, inquire, "are we growing faster or slower than our top three competitors?" If you don't know, find out. A quick method is to search LinkedIn for the number of sales representatives your competitors employ and multiply that by an estimated $500K to approximate their ARR growth target.
  2. Where is your 10x feature? To consistently win, you need at least one feature that competitors demonstrably lack. Many founders, while "good but not great," struggle to identify their truly differentiating 10x feature. What do you offer that isn't just better, but *10 times better*?
  3. Did you fall out of product-market fit? This happens more frequently than acknowledged. Your existing customers might still be satisfied, and your NRR could be stable. However, if you're consistently winning fewer new deals, you've likely lost product-market fit. The market has shifted, and you haven't adapted with it.
  4. Are you tapping into the new AI budgets? According to Morgan Stanley, 50% of the budget allocated for AI represents entirely new spending, not just reallocation. These are fresh dollars that didn't exist before. Have you captured any of this new spend, or have you remained on the sidelines, waiting to see what unfolds?
  5. Is your team still hungry? Many teams were burned during 2022-2023 and never fully recovered. While they may have become efficient and cut costs to survive, the initial drive and passion might be gone. Are your people still "pirates and romantics," or are they simply tired?

What to Do If You're Losing Share

The good news is that if you once achieved product-market fit, you can likely find it again. You are probably talented and experienced enough. However, it requires desire and an honest acknowledgment of what isn't working.
  • Double down on your existing customers. They are your strongest defense and offense. Happy customers are less likely to churn, even if competitors offer a superior product. Make personal connections: get on a plane, visit them, host dinners, and cultivate loyalty.
  • Systematically close feature gaps. If you're losing deals due to specific missing features, avoid panic. Be analytical. Develop the necessary features and communicate clearly with prospects about upcoming releases. Some will be willing to wait for you.
  • Find your 10x differentiator. Identify the one area where you can be dramatically, obviously, and undeniably superior. For EchoSign, early wins came from being the only cross-platform e-signature solution, later evolving to ease of use and localization. What is your unique advantage?
  • Use capital as a weapon. If you have the resources, don't just play defense. Aggressively target segments where you are weaker. This is a dominant-dominant strategy. Once you achieve efficient scale, you must be aggressive across the board, as your competitors will be too.
  • Rebuild the team if necessary. This is often the hardest step. But if your team is broken, exhausted, or disengaged, many individuals may need to be replaced to reignite growth. The existing revenue can then serve as customer funding for the next generation of products and team.

Track Market Share as Relentlessly As Your Other Core Metrics. You Have To. The Best Do.

Here's a challenge: Before closing the books on the current year, calculate your market share trajectory, not just your growth rate. Your *share*. If your market grew 30% and you grew 25%, you lost share. Period. No amount of efficiency metrics or NRR percentages can alter that fundamental math. AI has introduced hundreds, even thousands, of new competitors across many categories, significantly intensifying competition. Did you rise to the challenge, or did you stand still, watching new entrants capture your future customers? The winners of the coming year will be those who are honest about their performance this year. They are the ones who examined the scoreboard—not just their own numbers, but their share of the overall game—and committed to playing harder. The downturn excuse is dead. **If you're still not growing, it's not the market. It's you.** What will you do about it?

This Isn't Just a SaaStr Take – The Greatest CEOs Agree

If you believe this intense focus on market share over absolute growth is merely startup advice, reconsider. The most successful CEOs throughout history have obsessed over market position, not just their isolated growth rates. Andrew Bialecki at Klaviyo articulated this perfectly at SaaStr Annual: "One of the things we believe about software is if you're the market leader and you're topping out at 20% share, that's not really much of a market leadership position. And sometimes there's dynamics why that happens. But I often think it's like if you have truly built the best product and maybe there's some network effects to it, you should be able to top out way higher than that. Could be 50%, could be even much larger than that." Think about Bialecki's perspective. He isn't content with being #1 at 20% market share. He challenges: Why can't you achieve 50% or more? Klaviyo has indeed captured over 50% market share within its core Ideal Customer Profile (ICP), demonstrating that deep vertical penetration can be more valuable than broad reach. While many SaaS companies plateau at 15-20% market share, Klaviyo proves that with strong network effects and a truly superior product, category dominance is achievable. Don't artificially limit your ambitions based on traditional SaaS metrics. Jack Welch at GE established perhaps the most renowned market share mandate in corporate history. Upon becoming CEO in 1981, he issued a directive: every GE business unit had to be number one or two in its respective market; otherwise, it would be fixed, sold, or closed. This brutal honesty about competitive standing, beyond mere financial performance, contributed to GE's market value soaring from $14 billion to $600 billion during his tenure. Welch demanded world-class performance from every GE operation. If a GE Division wasn't a "Market Leader," the instruction was clear: "Fix it. Close it or sell it." This level of honesty is precisely what SaaS needs more of. Jeff Bezos adopted a different strategy at Amazon but with the same underlying philosophy: prioritizing market position over short-term profits. In his famous 1997 letter to shareholders, Bezos pledged to consistently value long-term growth over immediate profitability concerns. Amazon famously reinvested every dollar into gaining market share, even when Wall Street clamored for profits. Why? Because Bezos understood that in winner-take-most markets, competitive position outweighs margin. Marc Benioff at Salesforce has been equally explicit about what matters: "We want to grow our revenues. We want to increase our margins. We want to increase our market share. We want to increase our levels of customer success." Notice that market share is explicitly included in his priority list. Salesforce ultimately dominated the market through technological innovations, pioneering the SaaS model, and executing clever marketing campaigns, resulting in over four times the market share of its nearest competitors. Satya Nadella transformed Microsoft by shifting from a "know-it-all" culture to a "learn-it-all" culture, with the fundamental goal of regaining competitive position. "Our ability to change our culture is the leading indicator of our future success," Nadella told shareholders in 2015. When he took the helm, Microsoft was plagued by internal conflicts, bickering, and inertia. The cultural transformation wasn't about fostering a feel-good environment; it was about re-establishing competitiveness. The common thread among these leaders? They didn't console themselves with "we're still growing." They demanded market leadership. They benchmarked themselves against competitors, not just their own past performance. And they made tough decisions when they weren't winning.

The Final Word

The greatest business leaders don't merely track their own growth; they meticulously monitor their position relative to the market and their competition. Jack Welch didn't mandate "grow 10% per year." He demanded being #1 or #2, or else to fix, sell, or close. Bezos didn't optimize for quarterly profits; he optimized for market share that would compound for decades. In SaaS, the same principle applies. Your growth rate doesn't exist in a vacuum. It exists in relation to your Total Addressable Market (TAM) growth, your competitors' growth, and the influx of new entrants into your market. **Be honest: Did you gain or lose market share this year?** If you lost it—even while "growing"—you now understand what needs to be done.

Losing Market Share is… Losing.

Let's be blunt: **Losing market share is losing.** It doesn't matter if you grew 25%. It doesn't matter if you hit your board plan. It doesn't matter if your NRR is "solid" and your customers are "happy." If your competitors grew faster, if new entrants captured customers that should have been yours, if the market expanded and you failed to expand with it—you lost. And here's the critical aspect of losing in SaaS: it compounds. Every customer a competitor wins today is a customer you won't upsell tomorrow. Every logo they acquire is a reference you won't have. Every market share point you concede becomes exponentially harder to reclaim next year. But here's the encouraging news: **You can turn it around.** The most successful founders I know don't make excuses. They don't blame the market. They don't hide behind efficiency metrics. They look at the scoreboard, acknowledge the reality, and rededicate themselves to winning. If you once achieved product-market fit, you can find it again. If you built something customers loved before, you can build the next thing they'll love even more. If you won previously, you can win again. But it all begins with honesty. So, as you conclude this year and strategize for the next, ask yourself the difficult question: **Did I gain or lose market share this year?** If you lost—be honest about it. Identify the reasons. Engage with the customers you lost. Analyze the competitors who outperformed you. Rebuild your 10x feature. Reinvigorate your team. And then, go win. Because in SaaS, market share is the only scoreboard that truly matters in the long run. Growth rates fluctuate. Multiples change. Macro conditions shift. But winners win market share. Period. **Be honest. Turn it around. Be a winner again.**

Related: It's 2025. There Is No "Downturn" Anymore. It's You. | What to Do If You're An NRR Zombie | A Tale of Two Markets: The Winners and Strugglers in 2025

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