6 Amateur Mistakes That TANK SaaS Success 📉 Avoid These!

the secret it's out software as a service is arguably or I would almost say inarguably one of the best business models in the world and a lot of entrepreneurs are trying to get into it but as you know it's not easy to find an idea that you can be successful with so today in this video let's talk about six mistakes that very well might wreck your chance of success so that instead of making these mistakes you can get going in the right direction and build a business that's not doomed from the start and if you stick around to the end I'm going to tell you about the business model that I hear pitched a lot that almost inevitably fails so we're going through six mistakes let's start with number one which is building a solution in search of a problem just because you can imagine it think it up or build it doesn't mean you should so when an entrepreneur comes to me these days and they say I have an idea for a startup or a SAS app I say don't tell me your idea tell me what problem it solves and I usually say for whom as well so first find the problem start with a problem that someone has usually a business then have conversations validate the they need it and start to build you don't want to go and build in your basement for 6 months you want to have answered this question as best you can and you can't get to 100% maybe we can get to 30 40 60% the question you're looking to answer is what problem do you solve and for whom I'll talk about another mistake related to this in a minute but right now let's look at mistake number two one of the most common mistakes we see with folks who apply to my startup accelerator Tiny Seed is their pricing is off either their pricing is too low or the way they're charging meaning their value metric is off it's measur ing the wrong thing the implications of this are pretty tremendous number one you can have a business that should be doing a million dollar a year that's only doing $250,000 a year if you've underpriced yourself and I've seen firsthand businesses like this another implication is that depending on how much your annual contract value winds up being even if you're charging monthly your ACV annual contract value is really important because let's say you only have a $500 annual contract value you can only afford to do literally a handful probably five or six different marketing approaches you know it's SEO and content and there's some virality and a few others and I list all the B2B SAS marketing approaches that I know in my book The SAS Playbook which came out last year SAS playbook.com if you want to pick up a copy so if there are 20 B2B SAS marketing approaches but you can only afford five or six of them you really are doing yourself a disservice and potentially not growing your business fast enough versus if you have an annual contract value of let's say $10,000 you can do 10 or 12 of the marketing approaches and if you have an ual contract value of $25 or $35,000 you can do all 20 that I list in the book pricing is the biggest lever in SAS and it's one of the things that I see Founders screw up most often mistake number three is thinking that all you need to succeed is luck I hear folks say my marketing plan is to post it on Hacker News or product hunt or go viral on social media and really all of those things are either not going to happen or even if they do they're just not going to make a difference in your business in order to succeed you need a mix of hard work luck and and skill you can't control your own luck but you can control how much hard work you put in and you can build up skills over time and in this case you're going to want to build skills to Market and sell your product we talk a lot about that on this channel I talk a lot about it in my books but if you can build a product but you have no idea how to Market or sell it that's a problem and relying on luck thinking that that's going to help you Market or sell almost never works out mistake number four is selling to Consumers so there are approximately zero successful B to C Business to consumer SAS apps and whenever I say this in a video Someone suggests what about Spotify or Netflix or Hulu or Apple TV plus and those are actually just content Services they're not sass there not software as a service they're content as a service right you're paying an amount of money in order to watch a movie or listen to a song now one could argue that say iCloud or Google drive or Dropbox is BTC but all of those businesses make the vast majority of their money from selling to small businesses and big Enterprises the problem with BTC SAS is it's high churn you can't charge very much therefore you don't have the money to acquire customers and it just Stacks everything against you when you're trying to launch there are so many B2B opportunities stay away from BTC it's my recommendation these days when someone writes into my podcast startups for the rest of us with a question about B Toc I typically just say don't I'm kind of joking but also I'm pretty serious about it I have run a couple of B Toc apps back in the day before I knew any better 15 16 years ago and I will never do it again mistake number five is trying premium without knowing what you're doing if you think premium is a pricing strategy that's your first mistake right premium is a marketing strategy and while premium is not always bad it is not for beginners fremium is like a samurai sword if you know what you're doing you can do amazing things with it and if you don't you're likely to cut your arm off so knowing how fremium works and when it works and when it doesn't is super important I've actually talked about that in another video on this channel or do your research and learn about how hard fremium actually is to work cuz just rolling it out is not a recipe for Success it's a recipe for getting a lot of price sensitive customers who are probably going to give you feedback that's going to lead you astray and the sixth and final mistake is avoiding talking to other humans so in mistake number one I talked about building a solution in search of a problem and avoiding talking to people is probably the number one cause of this mistake you have to talk to people throughout your entire startup Journey right through throughout the entire life cycle of your startup and you don't just need to talk to people but prospects people who might want to use your software so during idea validation as you're building the product once you launch it you need product feedback you're going to be in Customer Support you're going to be doing sales and marketing you're going to learn how your prospects talk about it so you can use it in your copy there's all kinds of things that you can learn by talking to humans and as much as so many of us want to sit in a basement and write code for 6 months avoiding talking to people is a big mistake and it's one I see especially develop entrepreneurs make pretty often if you're looking to get better at SAS sales specifically sales you should join us on March 12th and 13th for microcom remote it's a fully remote and virtual conference we'll have four Keynotes filled with practical tactical advice on how to improve your sales game our speakers include Rachel Lea of fuse inventory Craig HT of kastos and Daniel ebear of sales MVP after the Keynotes we have founder by founder sessions where you'll get to chat with other attendees get your ticket at microcom remote.com I mentioned at the top of the video that there's a business model that a lot of people think is so great and they try to launch it and it completely implodes and that is two-sided marketplaces I don't know why so many folks want to launch two-sided marketplaces it's almost like they're drawn to it like a moth to a flame or to a bug zapper that's going to kill the business problem with two-sided marketplac is if you don't already have one side of it you're fighting a war on two fronts you know have twice as much marketing to do you have twice as much sales no one on one side gets value unless you have the other side whereas if you build a sasap and you have one user or a 100 or a thousand users they get the same value out of your application but trying to Kickstart the cold start problem it's called trying to Kickstart a two-sided Marketplace especially if your bootstrapping is damn near impossible if you don't already have one side of the equation if you look at the successful two-sided marketplaces nearly all of them have raise tremendous amounts of venture capital and there's a reason for that if you watch this channel you know there's a lot of work that goes into choosing a successful SAS idea and there's one thing that I would never start a SAS Business Without but it takes a couple minutes to explain check out this next video to get that cheat code thanks for watching

Channel: MicroConf

Views: 7,666

Keywords: MicroConf, Saas, saas startup, saas business, startup mistakes to avoid, saas mistakes, startup company, tech startups, software as a service, saas startup tips, saas tips, tech startups 2024, startup company tips, software as a service model, saas pricing, saas pricing models, b2b saas, b2c saas, how to build saas, building a startup, saas development, saas founder, saas entrepreneur, software as a service startups, saas issues, saas problems, saas risk

Id: XKe9O-nDdUg

Length: 7min 40sec (460 seconds)

Published: Sun Feb 18 2024