Why This SaaS Startup Failed: Lessons and Reflections from the Founder

A while ago, I came across a heartfelt post from a startup founder who, after five years of hard work and securing over $1.5 million in pre-seed funding, had to shut down their company. Their story was a stark reminder of the many challenges startups face. While many factors contributed to their decision to pull the plug, I couldn't help but think: could some of these mistakes have been avoided if frameworks like T2D3 had been implemented earlier on??

I believe the answer is yes. The T2D3 (Triple, Triple, Double, Double, Double) framework is designed to help B2B SaaS startups scale predictably and sustainably by focusing on achieving product-market fit (PMF) and creating a robust go-to-market strategy to scale. The reality is that many startups fail to reach PMF—the #1 killer of startups. Here's why I think some of the lessons this founder reflected on could have been mitigated with the right frameworks in place.?

Lessons from the Shutdown: What Went Wrong??

The founder shared key lessons, and while I wasn’t there to see firsthand what was (or wasn’t) done, it’s clear that several fundamental steps were either missed or not fully executed.?

Lesson 1 - Enterprise-Grade Software is Costly and Draining?

Building enterprise-grade software is expensive, requiring extensive customization that drains resources from core product development. In addition, long sales cycles with enterprise clients can erode cash flow and burn through runway.?

What Went Wrong: The decision to target enterprise clients, while appealing due to their higher Average Contract Value (ACV), was ultimately the path of most resistance. Enterprises are slower to adopt new technologies, especially when you're trying to create a new product category, which requires significant resources to educate the market. On top of that, the market they were targeting already had established open-source alternatives, making it even harder to justify the premium price and convince enterprise clients to switch. This strategy stretched their resources too thin.

Lesson 2 - No Buying Intent & Lack of Authority from?Procurement Managers

The founder highlighted the difficulty of selling to procurement managers who didn’t have the internal authority to drive necessary changes and lacked genuine buying intent.?

What Went Wrong: This suggests the decision-making unit (DMU) wasn’t properly mapped out. In enterprise sales, the DMU is far more complex than in small or mid-market deals, involving more stakeholders with differing concerns and priorities. Without a clear strategy to address each of these stakeholders, the sales process becomes convoluted, slow, and inefficient.

Lesson 3 - Offering the Product for Free to Get References?

While the founder recognized the importance of references, they didn't offer their product for free early on to build credibility and attract early adopters—a common strategy during the Minimum Viable Product (MVP) stage.?

What Could Have Helped: Offering the product for free or at a low price can attract a range of users from different segments, enabling the company to gather critical feedback?and confirm PMF & ICP. Doing this earlier could have helped the startup avoid misallocating resources.?

Lesson 4 - Targeting More Dynamic Niches?

In hindsight, the founder reflected that they should have targeted smaller, more dynamic niches like semiconductors or raw materials rather than focusing on enterprise clients from the start.?

What Could Have Helped: Conducting an in-depth analysis of the Total Addressable Market (TAM), Serviceable Available Market (SAM), and Serviceable Obtainable Market (SOM) would have revealed more dynamic, less competitive sub-segments where they could have found quicker wins. The T2D3 framework emphasizes the importance of targeting these more accessible markets and picking the path of least resistance.?

Implementing T2D3 to Avoid These Mistakes?

The reflections from this founder offer invaluable lessons for other startup founders navigating similar challenges. The T2D3 framework could have provided the necessary structure to avoid these pitfalls. By focusing on critical milestones—confirming PMF, targeting the right market segments, and creating scalable go-to-market strategies—founders can build a solid foundation for growth and prevent their startup from falling victim to the same avoidable mistakes.?

Success isn't just about having a great product; it's about making sure it resonates with the right audience at the right time.?

Are you interested in how I can help you implement the T2D3 methodology to achieve your goals? Book a meeting with me today.