As online markets have grown 10X in the last two decades, more $1B-$10B+ software startups will exist, and startups can grow faster than ever
Elad Gil / Elad Blog : Tweets: @skupor , @ladyashborg , @davidsacks , @juliamorrongiel , and @hkanji Tweets: Scott Kupor / @skupor : Great piece from Elad today on market size! I wanted to underscore one point he references on SaaS and the implications for market size. http://blog.eladgil.com/... Ashwini Asokan / @ladyashborg : ‘The markets are 10x bigger than ever’ A great piece by @eladgil While SaaS growth & oppty numbers have been in the making for a year now (hello market cap of saas cos), I was pleasantly surprised to see the #D2C brands & #retail making it on the list http://blog.eladgil.com/... https://twitter.com/... David Sacks / @davidsacks : The outcomes in SaaS are roughly 10X bigger than we thought the good case would be when we were building SaaS companies 10 years ago. And we were the optimists. https://twitter.com/... Julia Morrongiello / @juliamorrongiel : In the past, many niche software companies would tap out at $20M to $50M in revenue. Since markets online are 5-10X bigger than they used be, these same companies will now scale to $100M+ in revenue and a $1B+ market cap 🚀 http://blog.eladgil.com/... Hussein Kanji / @hkanji : In general, software markets and businesses are 10X bigger than they were 10-15 years ago http://blog.eladgil.com/...
Context & Ripple Effects
Elad Gil's argument is that the addressable market itself is the variable that changed: online spend has grown roughly 10X over two decades, so a software startup no longer needs to win an entire category to build a $1B–$10B+ outcome. The replies he gathered make the point concrete — David Sacks puts SaaS outcomes at roughly 10x prior expectations, and Julia Morrongiello notes niche vendors that once topped out at $20–50M in revenue can now reach $100M+ and $1B+ market caps.
The follow-on coverage reads as a validation arc: the [[a:950800|12 high-growth SaaS companies that went public in 2019, including Cloudflare and Slack, carried median annual revenue of $242M, up ~48% YoY]], and by late 2020 the median Series C valuation for SaaS companies had risen 40% to $210M. Gil's own earlier caution about VCs drifting into businesses that aren't software-driven frames why the definition of 'software market' matters so much to how this thesis gets priced.
First-order effects
- More startups can now clear $1B+ outcomes without owning their category, which changes portfolio math for investors like Scott Kupor and Hussein Kanji — smaller market-share targets per winner, but many more winners.
Second-order effects
- Capital repriced the thesis fast: Series C SaaS valuations jumped 40% to $210M while median revenue grew only 20%, and IPO valuations relative to revenue hit their highest levels since the dot-com era — investors paying upfront for the bigger-market future Gil describes.
Third-order effects
- If the pattern holds, the industry structure shifts from a few category kings to a long tail of billion-dollar niche leaders — which also means more capital competing for each outcome, raising the risk that the valuation premium outruns the revenue growth it is supposed to reflect.
The trend: Expanding online markets are decoupling software company scale from market share, multiplying billion-dollar outcomes while pulling private and public valuations ahead of actual revenue.