10 Biggest Mistakes to Avoid as a SaaS Founder


Taking an idea from inception and turning it into a successful business is an arduous task that not all can accomplish. 

Considering that 90 percent of startups fail, it takes brilliance and perseverance to triumph in business, especially when you are looking to build, launch, or scale a SaaS project. 

That’s why it still remains an open question what 10 percent of startups can do to make a name for themselves. 

Having a solid plan from the very beginning is one of the critical factors that determine the fate of a SaaS startup development. However, the essential thing is to have the knack to notice pitfalls down the line and evade them before they thwart your progress. 

Though the business scene is changing all the time, there are imperishable factors that have tormented SaaS startups for years. Of course, it can’t be denied that a startup is very dicey, but expecting these problems gives you the opportunity to withstand the test of time and build a solid foundation for your startup. 

Below are the 10 biggest mistakes to avoid as a SaaS founder. 

  • Failing to Seek Legal Help

Engaging in legal conflicts is perhaps the most fatal hit that has the potential to kill your SaaS startup. 

A judicial battle is time-sapping, expensive, and negatively affects your brand and image.

Irrespective of whether you are guilty or not, your business would not be able to rise from a legal feud, especially if the legal proceedings stop you from doing business for some time. The loss of clients and the large number of funds consumed in the legal battle can force a startup to go out of business. 

Don’t let that happen to your startup. The litigation can kill your business, even before you can launch your SaaS project. So it’s best to seek legal help beforehand and keep all assets and aspects of your SaaS startup in full legal compliance. 

  • Rushing Through Recruitment Process 

Hiring too fast can have detrimental consequences for your startup. In most instances, the work and maintenance needed aren’t too high for you to hire multiple employees. In fact, many SaaS startups either survive on the co-founders’ efforts, or they outsource work to dependable and transparent companies like DFY SaaS. These companies have the knowledge, experience, talent, and tools to get things done for you quickly and efficiently, be it development, designing, marketing, or more.  

Bringing in a team means increasing your running costs while hiring an offshore team specializing in building, launching, and scaling SaaS startups means less cost, less work, and more time for you to focus on other salient aspects of the business. 

But lowering costs does not mean one should go for freelancers. Why? Frankly, there are countless reasons why one shouldn’t take that risk. For example, they often leave startup founders in a tight spot (if not in a deadly situation) as they fail to deliver the work on time because of poor workload management. And the worst part is there is no transparency and data security. 

So, if need be, it’s better to engage a professional team until you gain some foothold in the market and start making enough revenue to pay an in-house team.    

  • Being Too Cheap or Too Pricy 

Although a horde of SaaS products available in the market are initially given away for free, most startups are looking to earn profits, and the only way for them to do that is by selling their products. 

However, adjudicating a price for SaaS products is a tall order for many entrepreneurs. The pricing drove many startups out of business or transported them into dark times where they struggle to get any users.   

The two most common pricing mistakes are being too pricy or cheap. In mistakes to avoid as a saas founder, overcharging scares the hell out of your customers, whereas undercharging leads to losses and forces you to quit the business eventually.

So, setting the right price is the key to success once you create a money-making product because it will determine whether your SaaS project lands profits or losses.   

  • Unable to Determine the Right Time to Launch 

In many respects, this mistake often occurs when there is no strategy, or you start finding your market after developing the product. Without a solid business strategy or creating a good understanding of your target market, it will always be a daunting task to accurately assess when the right time is to launch your SaaS product or service.

Product launch is a crucial time for any startup because, without a strong launch, you will never be able to make enough revenue to surpass the initial startup phase. 

  • Being Unoriginal 

Even though zebras are exotic animals, their uniqueness is lost when they are standing in a herd. And that’s exactly the case with SaaS founders; they present their projects to the world in the same way which is one of the mistakes to avoid as a SaaS founder.   

When you launch a startup, no one truly knows your company, why they should opt for your product, or what makes you great. The key issue is that many companies use the same approach or technique to make their project look enticing and innovative. However, in reality, despite being brightly painted, you blend into the background.  

  • Failing to Set Up Conversion Goals Soon

The conversion goal is actually the code implementation of your sales funnel. That’s why you need to set them up quickly and keep an eye on them as your product changes. 

Don’t know what we’re talking about? Well, when a user hits the ‘Upgrade’ button, how in the world would you know? You won’t unless you have configured a conversion goal for it. So set up Google Analytics earlier, so you won’t have to bear the pain. 

You can handle it alone if you have the requisite knowledge, or you can engage a digital marketing agency to deal with it and keep you posted on the conversion goals. 

  • Not Reviewing Your Competition with a Cool Head

Your competitors are miles ahead of you. Yet not everything they have done has worked for them. And not everything they are doing right now will bear the desired results. 

For this reason, it’s extremely vital to review your competitors with a cool head. Closely analyze your rivals’ onboarding and marketing process. Then, sign up and see their product in action. It will allow you to comprehend where you could change something or offer an alternative solution to your users.  

But remember, you should do it calmly and respect your competition because they are also trying to help the same people you are looking to facilitate. Discarding everything they are doing will only lead to ruins. 

  • Not Talking to Early Customers at All

One of the mistakes to avoid as a SaaS founder is that SaaS Many SaaS founders fail to ask their early customers what they are working on to understand their experience of your product and their pain points. It’s an excellent way for you to grow more effectively. 

This way, you can immediately address your users’ concerns by offering an alternative when you consistently hear that something isn’t clear to them. Similarly, if you repeatedly get to hear that something is working well for them, don’t hesitate to double down on that. 

Your worst mistake here would be not talking to your early customers at all. 

  • Ignoring to Call Churned Customers 

It may seem overly basic, but we can’t stress enough how important it is to follow up with your churned customers. Whenever a customer churns, particularly during the early days of your SaaS, it’s tough for a founder not to feel a bit sad, disappointing, or angry. 

But bear in mind, users churn for a reason. Catching sight of what went wrong will give you valuable insights into how your SaaS business can retain users better in the future. 

And personally, speaking to a user may even result in them signing up for your product or service again. 

Let’s bring home the bacon. 

  • Overlooking the Significance of Sticking to a Strategy 

Remember, solid growth never takes place overnight. Anything that grows too fast eventually grows fragile. 

It’s enticing to speed up growth by embracing a new strategy every so often. If that would have been the case, then you all have been millionaires by implementing the techniques from the blog posts you just read, right? 

But unfortunately, that’s not the case. 

The people who are doing well in the SaaS industry typically stick to a strategy because they work on systematic and patient growth. Don’t believe me? 

Alright, work the way you want and come back in two to three years and tell me I was wrong.  

Struggling to Get Your SaaS Idea Off the Ground

DFY SaaS can help you avoid costly pitfalls by building in the right way from the start, so you can go the extra mile and increase your chances for success.

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