David Friedberg

Yeah, they'll basically send, like you go on Caribbean cruise ships and you get a survey afterwards.

And then they use that survey data to provide management insights and operational insights to the leadership team and the operating team on how to improve the quality of their product.

or their service.

So it's sort of like this feedback surveying loop.

So if I were to tell you guys, hey, you want to build a feedback surveying loop to run your business better, are you going to buy SaaS today?

Are you going to ask your AI to spin up an agent for you to do that?

And I think that's a big part of what's happened is all these sorts of companies where the alternative to buying a SaaS product is to spin something up internally.

And it's much cheaper and easier to spin it up internally.

You get a custom workflow.

Maybe they took cash out, maybe they didn't, but there was still a big debt overhang, and the debt's clearly gotten impaired, which means that the equity, yeah, the equity.

So they may have taken cash out and covered some of their costs, but the equity got fully impaired.

And then the debt is clearly impaired because you can see how the debt and the CLOs are trading, which indicates that this business is just not doing well.

And then someone else on Twitter posted some internal information from Medallia saying the sales team is just not hitting their targets.

They're like way, way off their sales targets, which I think speaks to the underlying problem here.

No, unpack that, yeah, please.

Yeah, so the underlying problem is that these businesses in the SaaS space, where you're driven by net new sales every year, how many new customers are you signing up?

And then you're trying to manage retention and you're trying to increase sell-through and retain customers.

they're just having a really hard time sourcing new customers and there's probably higher than modeled attrition.

That's right.

And when you have a very kind of typically historically predictable business where you can say, hey, I've got a net revenue retention of 118% or what have you, meaning I'm selling into my install base by 18% over what I'm making last year and then I'm signing up new customers