You did the easiest hard thing.

You cut the burn the last 6, 12, 24 months. You right-sized the team. You got to profitability—or at least cash-flow positive. You survived when so many others didn’t.

And that matters. A lot.

But here’s the uncomfortable truth I’m seeing across the SaaStr portfolio and from talking to hundreds of founders: Profitability was the medicine, not the cure.

The cure is growth. It always was.

The Market Is Telling You Something Very Clearly Right Now

Take a look at where public SaaS multiples sit today from the SaaStr.ai Index:

The difference between growing 44% and growing 8% isn’t a few valuation points. It’s 4.3x the multiple. That’s not a rounding error—that’s the difference between a $500M outcome and a $2B+ outcome on the same revenue base.

The high-growth cohort (Rubrik, Palantir, Figma-class companies) trades at nearly 25x ARR with an average market cap of $100B.

The slower-growth cohort? Less than 6x ARR. And their average market cap is actually lower than the moderate growth tier despite similar revenue bases.

The market is screaming: Growth matters more than almost anything else.

The Cautionary Tales: PagerDuty and SEMrush

Want to see what happens when growth stalls? Let’s look at two real examples.

PagerDuty: $500M ARR, ~2x Multiple

PagerDuty built something real. Almost $500M in ARR. Over 15,000 paying customers. One-third of the Fortune 500. Customers like Cisco, Zoom, Fox, Shopify, and the NYSE. A 28.5% non-GAAP operating margin. Nearly $550M in cash on the balance sheet. 83%+ gross margins.

This is a real business. A profitable business. A business that serves mission-critical use cases—when systems go down at 2am, PagerDuty is the one waking up the right engineer.

And the market values it at roughly 2x ARR. Their market cap hovers around $1.1B on $500M ARR.

Why? Growth slowed to 4-5%. NRR dropped to 100%—meaning existing customers aren’t expanding at all anymore. Customer count has been essentially flat for three years.

They made all the “right” efficiency moves. And the stock is down 75%+ from its 2021 highs. Down nearly 50% from its IPO price back in 2019.

SEMrush: ~$455M ARR, ~4x Multiple

SEMrush is in a slightly better spot—$455M ARR growing 14-15%, 105% NRR, solid cash flow margins. But even with profitable growth, they’re trading around 4x ARR. That’s why Adobe just announced a $1.9B acquisition at $12/share—roughly 4x ARR.

The market was telling them: you’re a good business, but not a growth business anymore. And good businesses get acquired for reasonable multiples. Growth businesses command premium multiples.

The lesson is stark: A dollar of ARR growing 30%+ is worth 5-7x more than a dollar of ARR growing 4%.

The NRR Death Spiral

Here’s what killed PagerDuty’s multiple. Their NRR trajectory tells the whole story:

• FY25 Q3: 107%

• FY25 Q4: 106%

• FY26 Q1: 104%

• FY26 Q2: 102%

• FY26 Q3: 100%

Five straight quarters of decline. That’s not noise—that’s a trend. And at 100% NRR, your growth engine fundamentally breaks. You go from a flywheel to a treadmill.

At 100% NRR: for every dollar that churns, you need to upsell exactly one dollar just to break even. Your existing customer base generates zero organic growth. ALL growth must come from new logos. And new logos are expensive.

When your NRR drops from 130%+ to 100%, you’re no longer compounding. You’re just running to stand still.

“But Jason, We’re Finally Profitable!”

I know. And congratulations—seriously. You did what you had to do.

But here’s what I’m seeing:

Too many founders got so traumatized by 2022-2023 that they’ve internalized efficiency as the goal rather than the constraint. They’ve built teams optimized for margin preservation, not growth acceleration.

And now they’re stuck.

They’re growing 15%, 18%, maybe 22% if they’re lucky. They’re “efficient.” They’re “disciplined.”

They’re also slowly becoming irrelevant.

Because your competitors who kept investing through the downturn? The ones who figured out how to grow efficiently? They’re pulling away. And that gap compounds every single quarter.

The Rule of 40 Was Never Meant to Be “The Rule of 40% Margin”

Remember what the Rule of 40 actually says: Growth Rate + Profit Margin ≥ 40%.

That’s an equation, not a mandate to max out one variable.

A company growing 50% at -10% margins (Rule of 40 = 40) is worth more than a company growing 10% at 30% margins (also Rule of 40 = 40).

I’ll say it more directly: The market pays for growth, not efficiency.

Efficiency is table stakes. Growth is the multiplier.

5 Questions to Ask When Growth Slows

What “Reacceleration” Actually Looks Like

This isn’t about going back to 2021’s insanity. Nobody’s asking you to hire 200 people and pray.

But here’s a sobering data point from PagerDuty: they slashed Sales & Marketing from 53% to 30% of revenue. They cut R&D from 26% to 16%. Yes, it helped margins. But it also helps explain why growth collapsed.

You can’t cut your way to growth.

Reacceleration in 2025 looks like:

1. Redeploy margin into growth—deliberately.

If you’re at 20% margins and growing 15%, you’re leaving money on the table. What happens if you take that margin down to 10% but accelerate to 25% growth? Run the math on your valuation. I promise you’ll like the answer.

2. Hire ahead of the curve in sales and marketing.

Every founder I talk to who’s reaccelerating is doing the same thing: they’re hiring salespeople again. Not the bloated SDR armies of 2021. Lean, senior, expensive, effective. Three great reps beat ten mediocre ones.

3. Stop optimizing for CAC payback and start optimizing for market capture.

Yes, 12-month CAC payback is nice. But if your competitor is willing to accept 18-month payback and they’re grabbing market share you’ll never get back? You’re not being efficient—you’re being outmaneuvered.

4. Actually ship product again.

So many companies froze product investment in the downturn. Now their products feel stale. AI is eating everything. If you haven’t shipped something genuinely new in 18 months, you’re in trouble.

The AI Factor Makes This Even More Urgent

AI is compressing competitive cycles dramatically.

The companies that are reaccelerating are using AI to:

• Ship product 3-5x faster

• Run sales and marketing with half the headcount

• Create content and campaigns that used to require armies of people

This means the efficient-growth playbook is real now in ways it wasn’t before. You can grow faster without proportionally increasing burn.

But it also means your competitors can too.

If you’re sitting on your profitable plateau while others are deploying AI to reaccelerate, you’re not standing still—you’re falling behind.

It’s Time To Step Up Again

Look in the mirror and ask: “Is our growth rate a choice, or a constraint?”

If you’re growing 15% because that’s all you can figure out how to do, that’s a problem that requires soul-searching and probably some outside help.

But if you’re growing 15% because you’re choosing to prioritize margin over growth—because you got comfortable with profitability as the goal—then you’re making a strategic mistake.

The market window for reacceleration is now. Not next year. Now.

The companies that will dominate the next decade are the ones who used 2022-2024 to get efficient so they could grow faster, not the ones who treated efficiency as the destination.

You Survived. That’s Just The Start Of The Job.

Congratulations on getting profitable. You survived. That matters.

But survival was never the goal.

Look at where things end up:

• PagerDuty: $500M ARR, profitable, 2x multiple. Stock down 75% from highs.

• SEMrush: $455M ARR, profitable, ~4x multiple. Getting acquired for a “fair” price.

• High-growth leaders: 24.6x ARR, $100B average market cap.

That’s the difference between growing 40%+ and growing 4-15%.

If you’ve got the unit economics, if you’ve got the market opportunity, if you’ve got the team that can execute—stop hoarding margin and start investing in growth.

The market will reward you for it. Your employees will thank you for it. And your future self will wonder why you waited so long.

It’s time to reaccelerate.

The Confusing and Confounding Advice on Capital Efficiency