Competitive Dominance Strategy in SaaS: Why Market Leaders Should Eliminate Competitors
Jason Lemkin argues that SaaS founders should aggressively pursue killing their top competitors rather than accepting market equilibrium, as achieving dominant strategy and capturing disproportionate SaaS multiples significantly increases company valuation. The article provides tactical recommendations for competitive takeover including buyout deals, dedicated poaching teams, and FUD campaigns, supported by examples of companies like Zoom, Slack, and DataDog.
Metrics in this report
4$ billions
despite being far behind Shopify
Example of #2 player in e-commerce market
30-50x ARR
private markets may be higher
Companies growing 150-200%+ YoY at $10m+ ARR, still accelerating at $100m ARR
20x ARR
for companies at $10m ARR growing 100% YoY; at $50m ARR growing 60%+ YoY
Excellent SaaS companies
2-4x ARR
median
SaaS companies growing at half the top rate
10-20$ millions ARR
range
Post-scale company size where new competitors unlikely to emerge in oligopolical markets