My Top 10 Year One SaaS Mistakes. Save Yourself Some Pain & Just Don’t Make Them Yourself.

We try to focus on positive things here on SaaStr.? We leave negative to the critics. ?

But we all learn from our mistakes. So I put together a checklist of things not to do in SaaS in the early days … since they are all avoidable.

My Top 10 Mistakes Starting An (Ultimately Successful) SaaS Company

• Launching Too Early.? This paid off with press, PR, partners, etc.? But we should have made the product better and waited 3-5 more months before public launch. Sure, move fast and break things. But make sure the 1.0 as least has a great 10x feature that really works. Otherwise, all that energy and investment in "launching" is wasted. More here .

• Insufficient Diligence.? While I thought I understood the market we were attempting to create and attack, with time, I realized I didn’t fully research comps as deeply or successfully as I could have.? If I had, I would have better understood the likely endpoint vis-a-vis freemium vs. enterprise.? And then, I would have invested more wisely in Year 1 especially. More here .

• Turning Down Extra Series A Funds That Were Offered and That We Ended Up Needing.? I ran it probably too lean, not so much to avoid dilution, but I guess, to maintain control in some fashion. ?Or really, just not to lose control. ?But that wasn’t necessary.? We ended up needing another $500k in our Series A to get to the B.? Not the end of the world, but it could have been.? We should have taken more money when initially offered.? In fact, I made this mistake twice.? We also turned down $2-$4m extra in the Series B.? We should have taken $2m more. More here .

• Not Hiring 2-3 Sales Reps to Start.? I started with one.? I thought this was a better way to learn.? I should have hired 2-3 as soon as we were ready for 1.? You can learn a lot more if you see how 2-3 reps perform than just one. ?More on that here.
• Not Realizing Your First or at least Your Tenth Customer May be / Likely will be the Same as Your 1000th.? Our first ‘enterprise’ customer seemed like an outlier. ?But in fact, the use case, the profile, was the same as our 1,000th.?? We made this customer happy and successful. ?I should have “listened” to why that enterprise customer took such an early risk on us.? Instead, we wondered if they were just part of a nichey vertical.? A related post here:
• Confusing MVP and MSP.? A minimal viable product isn’t interesting in SaaS.? A minimal sellable product is.? It wasn’t clear which we were building for our 1.0. More here .

• Scaling Too Slowly — and Too Quickly.? I should have invested a little more in sales reps, more quickly, once we had some initial traction (see above).? But I also tried to scale up too quickly after our Series A.? Money has to chase opportunity at this phase.? Instead, I tried things I strongly suspected wouldn’t work in the hopes of growing even faster.? That was a mistake.? I should have told my investors I was taking a pause after our Series A, and invested another 3-6 months in processes and people, instead of rushing to ‘Scale Up’.

• In Year 1, Not Fully Seeing What Was Working, Stuck in the Fog of “The Plan”.? I should have gotten more, better advisors in the early days.? We accomplished so many great things in our first year.? But I couldn’t see it, because we came up about 50% short on our revenue plan.? But we hit everything else. ?So, really, that delta was irrelevant from a long term perspective. ?I wish someone had been there to show me just how well we actually somehow did in Year 1.

• Should Have Spent Even More Time Recruiting & Upgrading the Team.? I spent a ton of time here.? But I should have spent even more.? You just can’t settle or hire a B player.? Time is the real reason we settle. ?Thank goodness I hired a rockstar VP Marketing in Year 1. ?But I should have added more rockstar execs post-launch and pre-traction. More here .
• Not Going Long All the Time.? I believed in the big market and the big opportunity — always.? But the endless operational challenges pre- and then post-Initial Traction buried me a little too much.? Instead of just focusing on hitting the number for this year, and working on the next — a full-time job already — I should have found a way to also focus on hitting the numbers for 4 and 10 years out.? That can seem hard to do, even a luxury. ?But it’s not.

My 10, FWIW.

Don’t make any of these mistakes yourself. ?They are 100% avoidable. ?Make other mistakes instead. ???

A related deep dive here :

Want avoid even more mistakes? Join us at 2024 SaaStr Annual Sep 10-12 in SF Bay! With 12,000 of The Best in SaaS and Cloud.