WHAT I'M WORKING ON:

1.) Quick ask: Do you have a favorite framework for defining an ICP? I'm working on a collection of ICP templates, frameworks, and tools. I'd love to include your favorites (and I will cite you!).

2.) The Keyplay free plan has been my focus this week. Lots of big updates! Feedback always appreciated. 🙏

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MODERN SAAS vs BIG SAAS

​This table shows a common pattern in SaaS markets.

In the early days of SaaS, startups challenged incumbents by moving applications to the cloud (eg. Siebel --> Salesforce). Now it's about SaaS challenging SaaS.

Linear’s recent $35M series B highlights an example of a recurring story.

Linear is an increasingly popular issue tracking product, challenging the incumbent Atlassian Jira.

Once a disruptor, Atlassian has become a $50B cloud giant since their 2002 founding. As they achieved success, they expanded in multiple dimensions. They went up-market. They traded simplicity for robustness. They become multi-product, both building and buying more SKUs. Their $975M acquisition of Loom will likely give them another “front door” to cross sell their portfolio.​

This is not a rub. It's all good strategy for scaling into a juggernaut.

But it creates an opening...

Enter Linear

Linear positions as the “modern” option. They focus on simplicity and great UX. They have an opinionated product and method. They target the customer segments that are frustrated with, or poorly served by, the incumbent.

It appears to be working. Not only did Linear show up in Vendor’s Q3 top net new purchases, but they were 5 spots higher than Atlassian:

​The Series B announcement revealed some data about Linear’s traction:

• Over 1,000 customers, less than 4 since founding.
• Running cash flow positive on ~50 employees.
• Rumored $400M valuation (nowadays we can assume this correlates closer to revenue than ZIRP valuations in 2020-2021).
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Lessons for Modern Challengers

Beyond the numbers, Linear shows how a next-gen challenger can create a strong position.

Three things stood out when I analyzed their story:

1.) Strong positioning as the “modern” experience for “modern” teams.

They don’t name the enemy, but you can clearly see the counter positioning versus Atlassian Jira. The language on their website is very clear in this value:

• "The new standard"
• "Built for the future."
• "Designed for modern software teams"
• For "next-gen startups who reach for the stars"

While Atlassian will win as the safe or default option, Linear wants to be the cutting edge options for forward-thinking teams. This ideas comes through in every part of their story.
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2.) Opinionated product, explicit methodology.

Linear takes a stance. They have a point of view about what's important. This is critical for challengers who must compete with a narrower solution vs incumbents. While they have fewer features, they execute those features with a clear POV and craftsmanship.

Beyond product, Linear has a thoughtful documentation of what they call The Linear Method. Building around an explicit methodology is another way that Linear can stand-out. This gives customers a way to connect with the vision beyond features and UX. This can become a great mechanism for buyer selection. If you believe in the methodology, you will likely be a good candidate for the product.

For more detail, Linear founder and CEO did a great interview on Lenny's Podcast.
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3.) The "cool" customers

While Atlassian features big enterprise customers like CBS, Cap Gemini, and Audi, Linear highlights hot startups and unicorns like Vercel, Loom, Descript, Co:here, Substack, and Levels. Their customer list is a who's who of the next generation in SaaS, consumer software, and AI. They back up the logos with glowing testimonials from actual users.

This goes back to Geoffrey Moore's and crossing the chasm. By dominating a highly visible and self-referencing early market, Linear will have a solid position to cross the chasm into more mainstream customers (and challenge Jira more directly) in the future.

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More Modern Challengers

There are many examples of this pattern playing out in SaaS markets today. From HR Tech to Sales Tech to Developer Tools, we can see examples of similar strategies.

This table is far from complete. Many of these categories have multiple players in each column. Each has their own nuances in the way things evolve, but there are common themes.

Personally, I'm eager to study more of these modern SaaS challengers.

While I think that new category creation has a place, I'm more excited to figure out how my company (Keyplay) can bring new energy to existing problems. In fact, we're entering one of the messiest, most crowded categories in ABM and sales intelligence. Despite the plethora of vendors, I don't believe that the core problems are well solved for many segments. And despite 20 years of SaaS development, I think this remains true across dozens of categories.

With that, I'll keep digging into these examples.

Where else do you see this pattern playing out? Which challengers should we study next?

Reply or join the conversation on LinkedIn.

Best,
Adam

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