SaaS Founders: Don't commit to these 8 mistakes in early stages
Harish Kumar
74 replies
Let me share with you story of Alex...
Alex is a 36-year-old entrepreneur and founder of Blog.ai (Original name changed).
He wants to know how he can scale his business without the mistakes he made and what are the best strategies, tactics, frameworks, and tools he can use to become a successful growth hacker for his early stage SaaS Start-up.
As Alex begins his research, he quickly realizes that there is no one-size-fits-all answer to becoming a successful growth hacker. However, he does learn that there are a few key strategies that he can focus on to help him achieve his goals.
First and foremost, Alex knows that he needs to create a strong and differentiated value proposition for his business.
He also needs to make sure that he is constantly testing and iterating on his marketing efforts, as well as measuring their effectiveness. Additionally, Alex needs to focus on building a strong team of talented individuals who can help him grow his business.
By following these key strategies, Alex is able to successfully scale his business and achieve his goals.
Thanks to his efforts, Blog.ai becomes a leading player in the SaaS space, and Alex is able to achieve the level of success that he always dreamed of.
There are a number of mistakes that commonly plague SaaS start-ups, resulting in decreased sales and less-than-optimal performance. However, by being aware of these mistakes and taking steps to avoid them, founders can set their start-ups on the path to success.
In this article, we will discuss 8 of the most common mistakes made by SaaS founders and how to avoid them.
1. Over-reliance on a One-Man Team:
SaaS start-ups often have a one-person team of core engineer who is responsible for the majority of the product development. This can be a mistake because it leaves the company vulnerable to losing this key personnel, and it can also lead to an over-reliance on a few individuals who can start cajoling and hiding things from you.
It happened with Alex. He hired his one of the most closed even cousin thinking this person he can trust and never hide things or start working for others and not focusing on Alex's product.
Keep in mind, when you are building something valuable...do not give command in one hand. It's important to build a diverse team of engineers so that no one person is indispensable.
2. Not nurturing your relationships with customers:
In the early days, Alex was too focused on product and forgot to nurture those relationships he has built over time.
Building and maintaining relationships with customers is one of the most important things that a SaaS Founder can do in order to increase sales.
By keeping in touch with customers, getting their feedback, and offering them support, founders can create a loyal customer base that will be much more likely to make purchases in the future.
This is specially needed as founder being the real face and not your customer success representative.
3. Letting the tech get in the way:
In the early days of a start-up, it’s easy to get caught up in the technology and lose sight of the bigger picture.
The product may be your baby, but it’s important to remember that the customer is always king. Letting the technology get in the way of providing a good customer experience is a surefire way to sabotage your chances of success.
It’s important to strike a balance between meeting the needs of the customer and continuing to innovate and improve the product. Alex got caught up with his developer not willing to learn and move to new ideas like switching to AWS serverless or better front-end tech.
So Alex's product suffered poor design and user experience for long time causing more cost and potential customers staying away from trying his product.
4. Failing to embrace change:
One of the biggest mistakes SaaS founders can make is failing to embrace change. The landscape of the tech industry is constantly evolving, and what worked yesterday may not work tomorrow.
To be successful, SaaS founders need to be flexible and adaptable, always willing to try new things and experiment with different approaches.
Those who fail to do so will quickly fall behind and be left in the dust. Alex knew this and he has successfully pivoted his original idea to 3 times.
Thanks to his proactive approach and open-mindedness to change, he continued to explore new trends and pivots.
5.Not making the most of blogs and social media:
One of the biggest mistakes SaaS founders can make is not taking advantage of blogs and social media to reach their target market.
By not leveraging these powerful platforms, they’re missing out on a huge opportunity to increase brand awareness and boost sales.
Blogs and social media provide an excellent way to connect with potential customers and build relationships.
But in order to be effective, you need to create content that is interesting and relevant to your target audience. If you’re not sure where to start, there are plenty of resources available to help you get started. Social media should be one of your top priorities when it comes to marketing your business.
It’s a great way to connect with potential customers, build relationships, and increase brand awareness. Alex never underestimated the power of content marketing. In fact, Alex's himself challanged to become one of the top blogger in his niche.
He also started embracing AI and power of data to harness the insights.
6. Chasing too many leads:
One of the most common mistakes that SaaS founders make is chasing too many leads.
This can lead to two main problems: first, you will spread yourself too thin and not be able to give each lead the attention they deserve; second, you will quickly burn through your budget without seeing any return on investment.
To avoid this mistake, focus on quality over quantity by targeting a specific audience and generating high-quality leads. Alex knew this and this was even the reason he did not setup CRM tools in the beginning.
He just kept a Google Spreadsheet and start focusing on 100 most important leads and further narrowing down to get his first 5 customers. He just kept this scaling to 1000 before moving to a CRM.
7. Not being persistent enough:
One of the most common mistakes that SaaS founders make is not being persistent enough in their sales efforts.
Too often, founder give up too easily when they encounter a potential customer who seems uninterested or unresponsive. However, the reality is that many times these same customers can be won over with a little more effort.
The key is to persist and never give up too easily. By staying focused and continuing to reach out to potential customers, even when it seems like there may be no hope, SaaS founders can increase their chances of making a sale and growing their business. Alex learnt this very hard. No matter how many time he got NO...he never left the prospects on corners.
He kept chasing them with a new offer, new idea and new mechanism to win over their objections.
8. Giving up too soon:
SaaS founders can be quick to give up when they don't see immediate results.
It's important to remember that success takes time, and giving up too soon can mean missing out on a great opportunity. Try to stick it out for at least a 3 years before making any decisions about whether or not to continue pursuing your SaaS business.
Alex never gave up and not in future ever he is going to think twice. It was never easy for Alex. He has seen the real hardship and he know how to survive in extreme financial situations.
You will need to learn extra skills to deal with the push and pull of finances.
Provide your comment and feedbacks in case you have a lessons book and we need to unlearn a mistake that you have committed.
Replies
Maxwell Davis@maxwellcdavis
Some really good insights - thanks for sharing :)
Share
@harish_crawlq Sounds interesting - feel free to DM me on Twitter handle - @maxwellcdavis
CrawlQ Audience Research
@maxwellcdavis glad to hear you like the insights...what are things you are busy with?
Happy to share here a rulebook ...https://drive.google.com/uc?expo...
and if you are launching on Product Hunt...I got some fresh insights, let me know I will drop in a Doc to you?
CrawlQ Audience Research
@maxwellcdavis just sent you a DM...looking forward to speak to you
Checkaso
Thanks for sharing! Many things seemed surprisingly familiar!
Recently wrote about the lessons we learned, too:
https://medium.com/checkaso/how-...
CrawlQ Audience Research
@irina_heinz I like to
Start small and with a scalable tech if I need to start again. Last year, before bringing the product to market, I asked the Developer to convert to APIs and lets go with Lambda functions.
However, I did not know that Developer was avoiding this deliberately, because for him obviously more time he has to spend on.
Scalability is some I will vouch for from day #0.
Feature loading is also something that I have learnt a big lessons. In our app of 2019 version and in our App of 2022 version there is 10% overlap and 90% we have pivoted. Imagine, we have not used the 90% of the feature we developed or this code is still lying under the repos....its possible to find faults with yourself but to be honest your customer also don't know what they want.
Therefore, it is important to drive the feature development using the KPI. Problem here is if everyone wants to start chasing the same KPI and solve that same problem, then you loose your value proposition.
Thank you for sharing the link and I have found each sentence very insightful and I can relate with it 100%.
awesome , thanks for sharing bro 😍
CrawlQ Audience Research
@ankitsharmaofficial Great to hear from you...also I think we focus only on learning but we should actually focus on unlearning things which does not work in a specific situation...for early stage Startups I think social listening instead of full blown SEO is investment is better choice....we want conversions and not long pile of traffic with dismal 0.9% conversion rates.
Social listening is exactly what we are doing on this thread.
Spark'n
Most / practically all endeavours start with 1 dev person, particularly in the SaaS world. A ruthlessly lean MVP then test it with the market.
Scaling dev after more validation is typically the only way forward so your advice which infers ‘start with more than 1 dev or don’t start at all’… I’m at odds with.
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@snakecharmer I know it sounds odd but having one dev with full command in hand and running a key person risk is dangerous. At one point in time, I prefer one dev and another junior buddy who is equally ambitious. This is MVP which needs stringent 4 eye principle and stringent testing. MVP must not take a shortcut in terms of UX and it has to be bug-free.
It is perfectly fine that MVP solves 10% of the problem-pain point of your target audience. But within 10% it should bring that WOW factor in terms of development and testing foundation. Most often one dev starts with all excitement but since the Market is full of opportunities, you never know when you can lose this person or when this person will shrug you off if he or she decides to make things parallel.
Spark'n
@harish_crawlq Everything is balanced risk in the early days. Never starting because there isn’t a soft #2 in the dev department is so much worse than starting and failing.
I come at this having experienced the failures of relying on friends in development exactly as you described… still we must persevere and learn.
Anywho appreciate the chat. 👍
CrawlQ Audience Research
Share you thoughts in the comments below.
CrawlQ Audience Research
Wordle Answer Today
@harish_crawlq Harish, pinging you on facebook we'll sync up! Already a part of the CrawlQ facebook group
Wordle Answer Today
@harish_crawlq Useful tips Harish!
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CrawlQ Audience Research
Did you know that 90% of people have difficulty identifying which key feature they should prioritize?
Why it is important?
To make sure we understand what our ideal customers want from us, we first need to understand in-depth who they are and what and where they are spending time.
Thanks for sharing Harish!
CrawlQ Audience Research
@paul_vanzandt great to hear from you. Appreciate your feedbacks and inputs
@harish_crawlq Always Harish
Great content to read as alaways. These are some advice we should learn and relearn every day...
CrawlQ Audience Research
@lamallettebusiness I think its important to focus on unlearning as well....
These are two things I'm unlearning ...
1. Expensive CRMs
2. Over-reliance on SEO
I am actually unlearning two things as early stage founder...
Getting rid of all expensive CRMs...its waste of time if you can really narrow down your market and first focus on 1000 hot prospects.
Instead of over-relying on SEO, I am focusing on social listening using Reddit and right now on Product Hunt...social listening and sharing provides more conversions then hit and trial crowd-trafficking using keywords...our approach needs to shift to solve genuine problems of our users.
What are two things you are unlearning?
Great insights here Harish. I would add what you have shared is valid for all online businesses, not exclusively for Saas ones. Furthermore, much of this is transferable to bricks and mortar businesses too.
Having invested (excited and lost money) in lots of SaaS companies I can say many don't do the following correctly at the start.
1) Identify a product-market fit early enough, they usually start building first and then try to find users. Find the problem first and ask 100 people if the hypothetical solution is something they'd pay for if they would find out how much?
Do the maths to evaluate the cost of the problem (income) vs the costs of a stable v1 of the solution (expense). Only if there's a margin with a 12-18+month runway would you start. Expect 40-60% of the people who say yes, will not go ahead at this stage.
2) Don't invest in marketing soon enough, spend money on branding instead of marketing. Branding won't move the needle, putting yourself in front of the right people will!
3) Carry out adequate VOC research consistently.
CrawlQ Audience Research
@naz_haque Naz, thanks for sharing your view on this. Also it opens an interesting perspective for me when you see as founder your startup and when someone see the same from outside of that ecosystem either as investor or marketers.
With 100% agreement on the theoretical foundation of your points 1, 2 and 3, I would like to share my practical perspective on it.
1. This theoretical illusion of product-market fit suffers from the fact users themselves they do not know what they want, even they are also not aware what problem they are facing. This textbook approach is very hard to implement in practice for a SaaS Founder. You need to continuously make assumption, pivot and refine your understanding of users problem as you keep educating them.
Example: With CrawlQ I started with heavy focus on SEO and Topic Modelling. There are 1 million tools right now, so if I spend my entire life on it, still it will be hard to make a differentiated value proposition.
Again with 100% agreement on the theoretical text book approach, there is no single definition of product market fit. For early stage founders its important to find a unique problem no one is solving and if you can build something unique that solves that problem. Product Market fit stage comes later when you have at least $0.5m monthly recurring revenue and a potential set of 1000 paying customers.
In early stage, it is more important to tweak and tweak and educate users and build royal fans.
2. 100% agree. Branding is most important but I do not understand how branding is different to marketing when it comes to putting yourself in front of the right people.
With my personal experience, if you work with marketers and they are not willing to spend time on your product, that marketer will bring zero ROI to a early stage SaaS founder. For a early stage SaaS founder, their power users are best marketers.
3. VOC 100% agree. In fact for a early stage founder, his 50% time should be in research the market and remaining 50% in prospecting and reaching out to the people who are right and need right now the pill to kill the pain they are suffering, even if this leads to working on as service and consulting component. This service component can give immense insight to the founder to pivot and tweak his or her solution.
Sorry for the long comment but I got excited to share my views from inside the CrawlQ experience.
@harish_crawlq Thanks for the reply, and no worries about the long comment.
Your experience is invaluable and needs to be shared here!
Most of my investment failures have been in SaaS companies, and the issue has always been with PMF.
You're correct, PMF isn't textbook, and the practical experience doesn't match the textbook guidelines.
In my limited experience digging between my failures and successes, I've found during PMF founders don't know how to get past users' bias or realise soon enough that people unconsciously lie during surveys.
“Everybody lies. People lie about how many drinks they had on the way home. They lie about how often they go to the gym, how much those new shoes cost, whether they read that book. They call in sick when they’re not. They say they’ll be in touch when they won’t. They say it’s not about you when it is. They say they love you when they don’t. They say they’re happy while in the dumps. They say they like women when they really like men. People lie to friends. They lie to bosses. They lie to kids. They lie to parents. They lie to doctors. They lie to husbands. They lie to wives. They lie to themselves. And they damn sure lie to surveys.”
That quote is from the book Everybody Lies: Big Data, New Data, And What The Internet Reveals About Who We Really Are, by Seth Stephens-Davidowitz, a former data scientist at Google.
To better aid PMF discovery, the quality of the questions, understanding how significant the pain is and digging deep into what the user has done to overcome that problem is critical.
To be clear, I'm not stating you did anything incorrectly in your journey.
Should a founder find, their current vision doesn't have a PMF/fix a big enough problem, you pivot (or unfortunately stop if funds run dry).
A deeper analysis at the start helps to save the runway.
RE Branding.
In the word of Bezos, branding is what your people say about you when you're out of the room.
I believe branding is the emotion a company conjures when you think about them; it's not a logo or website design.
Too many founders spend resources on aesthetics at the start; the onboarding and user experience are more important.
Great UX, UI & CX creates the marketing collateral to attract and build a tribe which shapes your brand.
That's why great word of mouth spreads like wildfire. Get this right, build on this, gather collateral (testimonials, case studies etc.) and scale via push & pull marketing strategies to the correct audience.
Spade Chrome Extension
Someone recently pointed out that I may be shooting down negative feedback that could potentially have some constructive ideas behind them. How can we work on being more open-minded to change?
CrawlQ Audience Research
@mrmuke this is really great question and I must say I'm going to say which might sound controversial.
One of my friend she is psychologist and she opened my eye on this...
In feedbacks people vomit what they eat :)
Don't take that vomit to derail your vision. Make a process map in mind what to take and what to ignore.
When people give feedbacks, you need to take that with a pinch of salt. Most of the time your colleagues, friends and customer might come and talk very negative (in a constructive tone). But they are just not in the same context as you are in. They don't have the big picture vision that you have in mind.
I am open to all feedbacks and I don't these feedbacks personal. Even if this feedback is really blunt, rude or sugar coated.
Most important question I asked myself...what change I can do from this feedback which is low hanging and high impact to value to the users without burning a lot of time, resources.
You can also ask this question to the person who provided feedback. Acknowledge the feedback and ask what 3 things he can suggest can be done without changing much the current set up. Observe the answer and relate it with initial feedback. You will be able to filter out the noise from the actual feedback.
Now its hard if you as a founder are not involved fully in technical implementation. Thats where you need your main developer to step up and learn some Product Owner skills. Good to send this person on training as long as this person understand the value.
Let me know if some of these points you want me to elaborate more.
Spade Chrome Extension
@harish_crawlq Wow! Thank you so much for your reply - it was very helpful. I agree, I think that if really try to hear what they are saying, I can figure out things I can actually do. Just checked out your product by the way - great work!
Spade Chrome Extension
@harish_crawlq Can we use CrawlQ to figure out a target audience for a chrome extension?
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CrawlQ Audience Research
Solid advice!
re: Giving up too soon
I'm seeing a lot of indiehackers and founders give up on ideas just because they couldn't make them work as solo founders in a couple of months.
This is also because of the toxic attitudes of some people in the community (the 'no immediate revenue = shit product' people).
Not all products started out as immediate successes. Convertkit sat at 2k MMR for 2 years. Discord was a failed game chat. Some are one pivot away from something good. So your 3-year advice is pretty spot on IMO.
CrawlQ Audience Research
@stelian_dobrescu1 you have spot on ...with this...also toxic nature is fuelled by agents of VCs...they want to just somehow get business and will make you feel low if you do not collaborate with them in inflating the valuation numbers. Also agencies and marketers who have never launched a single product will give you tonnes of advice.
The real life fact is behind the scene you are executing the research, trying to find out the value proposition and laying the necessary foundation so that you can provide unique services.
In our case, we wanted to humanize AI, so we worked just 8 months to collect real high quality research data and used the transfer learning. During this period, we could not focus on UI. But all of a sudden, when we implemented the new method, the results are unique and differentiated.
The worst part is sometime people create hard perceptions and this is something I am learning how to break that perception wall which was created because of the past versions of your product.
Please share more details about Convertkit...Very interesting and successful product.
easier to say than to do!
Great Tips. Thank You.
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@reyalteedotcom glad to hear from you....I appreciate your response.
WorkHub
So insightful. Glad that you shared.
CrawlQ Audience Research
@qudsia_ali happy to hear your that you liked those insights...I have also added a research-based workflow using AI research assistant the sequence a Tinkerer Tester entreprenuer can follow...This is written with the help of Audience Research AI...Athena. You would like to take a look...https://drive.google.com/uc?expo...
Great insights, thank you for sharing Harish
CrawlQ Audience Research
@devrim_ekmekci1 Great to hear from you ...we keep on making a list of lessons but then we keep them unlearning as we move from one goal post to other...
I have also compiled a book using some assistance from researching Startup founders ...I put them into the book Lone Wolf ...Let me know if you would like to get a copy...I will drop you a link if it resonates with you.
@harish_crawlq would be great could you please share it?
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@devrim_ekmekci1 here is the direct download link...and i keep it updating based on the research AI Athena I am using.
https://drive.google.com/uc?expo...
@devrim_ekmekci1 @harish_crawlq great you have mentioned those thing which I haven't followed for https://apkdudes.com/bad-piggies... . Now I will definitely follow all the point for next project. And will love to study you book. Could you share the link of your book.
CrawlQ Audience Research
@devrim_ekmekci1 @darron345 I'm glad you like the points mentioned here....Here is the link to the book...https://drive.google.com/uc?expo...
What is your next upcoming project?
SetOps
Hey Harish,
Is this fictional or something born of experience ?
Having said that this is filled with great lessons that are of value to anyone getting into building their own product 💎
CrawlQ Audience Research
@arunpariyar Hi Arun, this is born of real experience...I just changed the names ...so that it does not backfire when I sign the term-sheet :)
1. Made a mistake to give control to cousin
2. Got initial MRR but launched on AppSumo, lost those 20 customers
3. Made a mistake to work with Python Flask instead of using AWS serverless Lambda
4. Pivoting was never an issue...I pivoted 3 times already.
5. Started Blogs but then did not distribute them on channels
6. Invested in CRMs like Hubspot and ActiveCampaign but I realized its bottleneck in the beginning.
Not giving up ...easily
CrawlQ Audience Research
@arunpariyar thanks Arun...and let me know what you are focusing on...happy to connect and share ideas. Interesting to know your perspectives...specially if one is bootstrapping.
SetOps
I was confident this was real life. Keep Going @harish_crawlq All the best 🚀
This was awesome, great insights
CrawlQ Audience Research
@dylan_merideth happy to hear that you liked the insights....of course with our own AI research assistant...I started creating a rule book a tinkerer tester startup founder in those early days can do or should do or should not do...have a look when you get time to scan through and happy to hear your feedbacks. https://drive.google.com/uc?expo...
Great points! I think the point about not giving up too soon is the most important. I even think that there is no such thing as startup failure. Failure simply means someone gave up too early.
CrawlQ Audience Research
@georgy_nemtsov exactly...I 100% agree with you...I am also making a use case how to keep the things in dormant when cash is gone and still not make it failure but keep working on it...manage expectations from yourself and customers. I saw a recent email from a founder who mentioned his plans to keep the app in dormant stage, recover from burnout and start all over again.
Those are good tips! Thanks a lot!
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@klaus_agnoletti glad to hear your feedbacks...happy to connect if you would like to discuss any of these points in more detail.
CrawlQ Audience Research
@klaus_agnoletti what you are busy with currently?
@harish_crawlq I am head of community at CrowdSec. I am busy travelling to conferences and speaking about our project and engaging with the infosec community on- and offline. How about you?
CrawlQ Audience Research
@klaus_agnoletti really glad to hear...how to go about your target audience and narrow down them to ideal customer and finally to buyer personas...we might have an very interesting discussion on this.
@harish_crawlq That is a really good question and nothing I spend too much time worrying about. First of all because CrowdSec if free and open-source software. So instead I think in CrowdSec users and how to get in touch with them and convince them to use our project. That being said I don't have a marketing background and got this job because of a lifetime of experience with infosec- and other geeky communities. I firmly believe that these can be an extremely powerful user segment. But the challenge of a more traditional marketer are many as they typically don't understand open source, security or the geek culture - or even basic things as how to talk to that/these personas. I am convinced this is the way marketing is going as so many I know hates the more traditional approach to infosec marketing and sales. So I predict that traditional marketers will have a tough time adapting to the new reality here.
One of the most powerful marketing platforms I've used in my job is Reddit. It's also really one of the toughest to master as it can easily backfire if you don't adapt to the language and the ethics in whatever subreddit you're trying to get attention in.
I am a Marketing Associate/PM and this is very helpful. Thank you Harish!
CrawlQ Audience Research
@precyl glad to hear that you find this helpful and happy to receive your feedbacks...here you can see the rule book in more detailed version https://drive.google.com/uc?expo...